Report on International Strategic Management and Innovation at Primark

This report provides a detailed analysis of Primark's international strategic management and innovation strategies. It begins with an executive summary and then delves into the macro environment using PESTEL analysis, examining political, economic, social, technological, environmental, and legal factors impacting the company. The micro-environment is assessed using Porter's Five Forces, evaluating the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and competitive rivalry within the clothing industry. The report then analyzes Primark's business model and value proposition using the Value Proposition Canvas, identifying customer gains, pains, and jobs, along with gain creators and pain relievers. Furthermore, it explores Primark's innovation strategy and compares it with international strategies, offering recommendations for improvement. The report concludes with an appraisal of Primark's strategic situation.

International Strategic
Management and
Innovation

Executive Summary
International strategic management is a managing system which plan to adopt many powerful
strategies for the organisational growth at international level. Every business aimed to gain
popularity at worldwide level and this can be done only by managing strategies and actions
properly. The main activity in international growth is to analyse marketing situations and
demand. Strategies are made on the basis of marketing situations. Another major factor for
worldwide expansion of business is to adopt new and innovative ideas and technologies which
help the business to introduce them self differently in market. This file covers the external and
internal factor analysis and their impact upon company, the role played by resources of
companies for international growth. At the end this report covers some inventions of the
company and the comparison of their strategies with international strategies. Recommendations
are made on the basis of this comparison. Recommendations are made on those factors where the
company is lacking behind to adopt good strategies.

Table of Contents
Introduction......................................................................................................................................4
Main Body.......................................................................................................................................4
Analysis of Macro Environment..................................................................................................4
Analysis of micro – environment and competitive success factors.............................................5
Analysis of business model and business strategy......................................................................7
Analysis of innovation strategy.................................................................................................11
Appraisal of Primark’s strategic situation.................................................................................13
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

Introduction
International strategic management help to understand what all strategies is require to
perform business functioning at international level. It helps to identify what all factors are there
for a business when it reaches to international level and how a company can tackle all these
factors (Veselovsky and et. al., 2019). Using innovative ideas and techniques of doing business is
best idea to handle all factors especially competitive factor. Using innovative technology,
process and strategies will help the company to grow well. Primark is a company who deals in
fashion clothing. It is founded in the year 1969 by its founder Arthur Ryan. Its headquartered is
located in Dublin, Ireland. It sell it product in many other countries like Germany, UK, Austria,
Poland and etc. The following report covers Macro and Micro environment of Primark, analysis
of business model and business strategy, analysis of innovation strategy and appraisal of
organisation’s strategic situation.
Main Body
Analysis of Macro Environment
PESTEL is used to examine macro environment of Primark-
Political factor- It include tax policies, trade restrictions, globalization and many more
(Varsani, 2018). In context of UK, their recent corporate tax is 19% which is higher than many
other countries and now their government is planning to higher the taxes to 23% by 2023. Hence,
this is harmful for clothing industry and many other industries because they have to pay more
taxes and their retained earnings will be reduced after paying taxes. On the other hand there are
no or very few trade restrictions for UK based company or those who did business in UK for
many years. Hence, in this way political factor is appropriate for companies to import and export
their products easily from UK.
Economical factor- It include GDP growth, employment rate, household expenditure
and etc. In UK, their GDP grows well and their main growth is shown in agriculture,
construction and service sector companies and their employment rate is good and that is 99%
hence there is no lack of labours in UK. Overall economical condition of UK is good.
Social factor- It include belief, values and standard of living of the population of a
country (Abdallah, Dahiyat and Matsui, 2019). In context of UK, their population is believed to
have high standards. Hence, clothing industry can increase the prices for their cloths at little high

prices also because the population did not bother about little high prices but they bother about
good quality. On the other hand there are many strikes held in UK due to skin colour
discrimination and religion discrimination which impacts negative upon clothing industry
because in strike less population purchases cloths from stores and many strikers damages the
malls and building in their strikes.
Technological factor- This factor includes how a country uses its technology in
producing new goods and services. UK is one of the countries in world which is having
advanced and modern technology. Hence, the clothing industry has benefited from this factor by
using most advanced and updated technology for producing their different kind of dresses.
Advanced technology helps the companies to produce better qualitative goods in less time.
Environmental factor- This factor includes availability of raw material, climate,
tourism arrival rates, pollution control and many more (Mardani and et. al., 2018). In context of
UK, their tourist arrival rate is high which is beneficial to attract most of the tourism retailing
stores and gain opportunity to earn more by gaining more customers. Beside this, environmental
factor of UK is hazardous in one factor and that is its air pollution. They are having hazardous air
pollutants in air which causes almost 8.1% deaths every year due to lungs disease and breathing
problems.
Legal factor- This factor considers all legal laws of a country. In UK, their safety law
states that all safety measures must be taken by company to protect their employee’s health at
workplace. There are some other employment laws such as their minimum wage law and many
others which are made to create a proper discipline at workplace.
Analysis of micro – environment and competitive success factors
Porter’s five force analysis of clothing industry
Is it competitive approach in order to determine what completed advantage of given
industry is providing to the organizations and to analyse the potential of the other market players
in the industry which helps the company's in generating the sustainable competitive advantage in
the following industry (Saha, Dey and Papagiannaki, 2020). In order to analyse the micro
environment and the competitive porter's five force analysis of the clothing industry is discussed
below:
Bargaining power of suppliers: in clothing industry of the world especially among the
USA and UK where firms are required to maintain the strong relationship with the suppliers so

that they can meet their needs at the short notice and also it is very important to choose where the
supply is a located. Raw materials are limited in countries like UK and USA which means the
number of supplies is also limited therefore the bargaining power of suppliers is relatively high.
Companies like Zara, Marks and Spencer therefore rely on the vendors from countries like India
and China for the supply of raw materials as there cost of raw materials is low (Izni and
Wandebori, 2020).
Bargaining power of buyers: in the clothing industry of the world the power of buyer is
always high as there are thousands of options available for the buyers which give them a power
to switch whenever they want. Buyers are the most important factors as they change the trends
push down the prices, switch retailers; basically the buyer has very indirect and direct bargaining
power in the clothing industry. With the trend of online the buyers also gained the power to
easily compare the prices of different brands and search for more options.
Threats of new entrants: in the clothing industry the threats of new entrants is
considered to be moderate as the industry has both risk and reward the new entrants entering the
clothing industry might face the risk of last bulk of clothing storage due to low sale or else can
gain success if become popular. In the recent current trends entering in the clothing industry is
really easy as through social media as and other platforms it has become very easy for the
designers to sell start their own start-up business in the fashion and clothing industry without any
big physical Store but it also has its own cons that it states that the threat of new entrants in the
clothing industry for the break brands like Zara, H&M, Marks and Spencer etc. is relatively
moderate.
Competitive rivalry: clothing industry is full of competition as big companies have their
own designers or they hire the designers from outside the company and make a deal with them to
sell their designs with the brand name. Big companies really operates in the highly competitive
environment of the clothing industry as designs of one brand is competing with the other brand
which is highly impacting the current trends in the fashion industry thereby impacting the each
other’s sale as well as profit (Kumbara, 2020).
Threats of substitute: the world clothing industries full of substitute where the
customers have full liability to switch from one branch to another branch in terms of price,
trends, clothing material and other factors. This factor is relative Li very high in the clothing
industry as people easily switch from one branch to another in order to increase the variety in

their wardrobes. The spectre completely states that customer loyalty is certainly low in the
clothing industry (Ha, 2021).
Competitive success factors
From the above porter’s analysis of the clothing industry some of the competitive
success factors are been analysed for the organisations that are operating in the clothing industry
such as Zara, H&M, Marks and Spencer, Primark, ASOS, next PLC etc to gain the competitive
advantage.
Rising interest and concern of the customers towards the ecosystem and highly sustainable and
organic clothes is a great competitive advantage for the organisations operating in the clothing
industry to established the strategies and the business processes that supports the ecological
production of the clothes as well as in materials and the raw materials used to design the clothes
should be organic and environment friendly (Pawłowska, 2020). This will not only promote the
company's sustainability towards the environment but also help the organisation and gaining the
competitive advantage and increasing the customer base that highly supports the environment
friendly clothes. Technology is also the one of the key competitive success factored in the
clothing industry where many big brands like an ASOS are running their clothing completely
online that is e-commerce with help of technology and even the consumers are more interested
and excited to buy over e-commerce sites.
Analysis of business model and business strategy
Analysis of value proposition- Value proposition answers the question of “Why” that
why customers purchase products from particular brand only and many others. In simple words it
tells the value of company in market. Value Proposition Canvas model is used to identify Value
Proposition of Primark.
The value proposition canvas is a tool which helps to know that whether the existing
product has created good image in market or not and in case of any issue company will take
corrective measures (Shatilo, 2019). Hence, this tool helps to identify the positioning of products
at marketplace. This model has two factors, first is customer profile and second is company’s
value proposition.
Customer Profile-
Gains- It considers all the benefits which are expected by the customers from the
product. It also includes satisfying customers by increasing their livelihood by using the product.

In context of Premark, in case their clothing fabrics, designs, colours, patterns, prices and etc are
favourable for customers then they fall in this category.
Pains- These are the negative experience of customers while using the product which
they purchased (Bindra, Parameswar and Dhir, 2019). In context of Premark, in case their
dresses were defective or not fits to customers or even customer think that they purchase it for
higher prices than other stores then customers fall in this category.
Customers jobs- These are the actions performed by customers them self to fix a
problem.
Value map-
Gain Creators- This is the way which tells that how a company can create gain for
customers (Aggarwal and Kapoor, 2019). In context of Primark, they can offer good quality of
clothes and attractive designs in low prices to create gain for customers.
Pain Relievers- This is the way of reducing pain of customers. In context of Primark,
they can act as pain reliever by offering after services to their customers. Exchanging products in
case of defect in their product, allowing discounts and offers and many other activities will be
done for pain relievers.
Products and services- These are the ways of mentioning the mane of products and
services which create gain and which relieve pain for customers (Demir, 2018).
Achieving fit between the value proposition and customer profile-
Listing the names of gains and gains creator, pains and pain reliever is only one stage.
The most important is that the company is supposed to select the most significant option from the
list of gain creators and pain relievers which suits the best to solve the problem. In context of
Primark, in case their customers face pain by purchasing defected product then according to
them the best pain reliever option is that they can exchange the product. The process is not
completed here. After providing best pain reliever to customer it is necessary to take feedback
from them that the following pain reliever which is provided is suitable for them or not. In case
customer disagrees then company must provide that pain reliever which is beneficial for both
customers as well as for company.
Business model canvas- This is a business model which help to break down long
business model into smaller parts to understand it easily (Nadikattu, 2020). This model help to

communicate to clients what are the benefits of having business with company. The structure of
business model canvas of Primark is explained below-
Key partners
 Accord
 Better Work
 Elevate
 Ecap
 Impactt
 Innovatus
 Oritain
Key Activities
 Brand
network
expansion.
 Partnership
Development
 Development
of online
platform
Value Proposition
s
 Qualitative
fabrics.
 New
designs and
patterns.
 Manufactur
e according
to orders.
 Provide
after
services
Customer
relationship
 This business
provides after
services and
resolves all
the issues of
customers as
soon as
possible.
Customer segment
 Customers
are
segmented
on the basis
of age and
gender. Their
main
segmented
customers
are both
males and
females.
They provide
cloths to both
and the age
group is
above 10
years.
Key resources
 Employees
 Brand network
 Online Community
Channels
 Social Media
promotion.
 Partners
programs.
 Work of
mouth.
Cost Drivers
 Global expansion.
 Uses competitive pricing strategy which means they
have lower prices than their competitors.
Revenue stream
 Sponsorships
 Advertisement
Analysis of key resources and capabilities- It tells the value of resources of an
organisation that how important their resources are for their business (Grimpe, Murmann and
Sofka, 2019). VRIO model is used to determine the importance of resources of an organisation.
VRIO analysis of Primark is explained below-
Resources Valuable Rare Inimitable Organised
Brand image YES NO NO NO

Distribution channel YES YES NO NO
Supply chain
management
YES YES YES NO
Human resource YES YES YES YES
Valuable-
Brand image- Primark is known because of their brand image. Hence, it is most valuable for
them.
Supply chain network- They have proper supply chain management team which handle all issues
of supply chain very effectively. Therefore, it is also valuable for Primark.
Distribution channel- Primark’s customers are happy with their services because there is easy
availability of any dress type and they have proper inventory which help them from the condition
of shortage of products.
Human resource- Their employees help them to grow by their good performance. Hence, they
are also valuable for Primark.
Rare-
Distribution channel- Their distribution channel is considered rare because they opt unique
procedure of distributing their products. They are considered to sell their products in their own
big stores and malls. They also opted online selling.
Supply chain network- Every company has different process of manufacturing their products and
serve their services (Pérez-Luño, Alegre and Valle-Cabrera, 2019). Primark is also having
different kind of supply chain management and that’s why their supply chain network is rare.
Human resource- The skills and talents of their employees are different from other company’s
skilled employees. Hence, manpower of Primark is rare.
Inimitable-
Supply chain management- Primark has unique way of ordering their fabrics and manufacture
clothes with them and the whole process from purchasing raw material to selling to end
customers are not copied by any other company. Hence, their supply chain management is
inimitable.

Human resource- Skilled and talents of employees are different and total number of employees
are also not same in any companies. The ideas and knowledge of Primark’s employees are not
copied by any other company. Hence, they are inimitable resource for their company.
Organised-
Human resource- Employees of Primark are well organised because they have fixed job and task
and know that what work is done by what time.
From the above information it is evaluated that Primark’s strategy contribute to its
competitive advantage because with the help of its value proposition analysis it is clearly
evaluated that Primark provide after services to its customers like exchange of products in case
of any defective dress is purchased by their customers by mistake. They also offer discounts and
offer which attracts more customers. They collect feedback from their customers whether their
customers are happy or not with their products and services. Hence, this helps them to compete
with their competitors by gaining more reputation for their company and become more famous in
market. On the other hand it is clear that Primark has valuable resources which help them to
manage their internal environment of business and help them to achieve their business goals with
effective manner.
Analysis of innovation strategy
Innovation is the key driver towards the success and growth of the organisation. In the
clothing industry innovation is a continuous process in terms of product and process as the
clothing industry has such a rapid change in the fashion and the trends which ultimately leads to
the innovation in the organisation in terms of designing and fabricating the new materials to
create an eye catching clothes and apparels that leads to the competitive advantage. Innovation at
Primark is done with the help of innovation strategy in 4 areas product, process, position and
paradigm (Masi, 2020). Primark director of Business development states that in the High Street
there is a continuous innovation and Primark always give a flavour of innovation in the firm’s
concepts and store experience to their consumers. The 4P's of innovation strategic in context of
Primark is discussed below:
Product: The Primark's sustainable cotton programme outstanding innovative strategy
by which company committed to train thousands of independent cotton farmers in the sustainable
farming methods. The company started using sustainable cotton grown using reduced amount of
water and chemicals that help the company and innovating new features in its products like

jeans, bed sheets, towels and pyjamas. This innovation of Primark was highly radical towards
product innovation which lead to development of new materials including fabrics made using
recycled down and PET bottles.
Process: Primark has changed its process of production of materials and fabrics bye by
changing the direction of products towards the innovation in their way of producing. The
company has new process for developing the ecological and environmental materials fabrics
which are completely sustainable and take the initiative to reduce the wastage of water and
chemicals in the process. Also changed the way of it supply chain by reducing the cost below its
competitors by using the good technology and efficient distribution system and is also sought out
a process to reduce the transportation cost by sourcing the cloth from the closed suppliers where
the product will be cut and sewn to the finish garments (Peters and Simaens, 2020). Basically to
avoid the the wastage of clothes and to avoid lot of bulk of clothes due to the less sale company
has adopted the strategy of Justin time in order to innovate the new process that reduces the cost
as well as save the time by innovating the new distribution system using the technology.
Position: In terms of position innovation the company changed its marketing and
advertising channel into the social media platform to remain aware about the current market and
to ensure the current and future offers relevant to company's customer to enhance its reputation
in the clothing industry. Primark also started gathering the online feedbacks on sales and prepare
weekly performance based updates to improve the online sales of the organisation and to position
in the target market in order to keep up to date with the current market trends. The use of social
media is the most suitable position innovation strategy for the Primark to gain competitive
advantage and increase the value of Primark on the online platform with the new trends of
market.
Paradigm: Company innovation of new store design in its mental traditional store was
radical towards Paradigm innovation. The company investigated plan to develop new business
model particularly in the personalization and in store experience category to grow the customer
footfall in the stores and has the customer experience was highly innovative idea to shape the
business strategy (Liu and et. al., 2020). Innovative idea of new store design deliver the value
proposition and strategic growth and quantify the opportunity to increase the business with them
customisation and experimental. For this company also changed it earlier form of store selling in
to The E-Commerce business by getting aware of the market thereby enhancing the reputation