Primark's International Business: China Market Entry Strategies

This report provides a detailed analysis of Primark's international business strategy, with a specific focus on its potential entry into the Chinese market. The report begins with a company profile and history of Primark, followed by an examination of the e-business environment, including digital market analysis and a PESTLE analysis of the Chinese market. It then explores digital business technologies that Primark could leverage. The report also covers Primark's business model, competitive advantages, and competitor analysis, including a SWOT analysis. Furthermore, it delves into potential market business strategies such as direct exporting, licensing, franchising, and joint ventures. The report concludes with recommendations for Primark's market entry strategy and a summary of key findings, providing a comprehensive overview of the challenges and opportunities Primark faces in the Chinese market.

International Business

Table of Content
1. Company Profile & History
2. E-business environment
2.1Digital Market analysis
2.2 PESTLE Analysis
3. Digital business technologies
4. Business Model
5. Competitive Advantage
Competitor Analysis
5.2SWOT Analysis
6. Market business strategy
6.1Licensing
6.2Fraternising
6.3Joint Venture
7. Recommendation
8. Conclusion
9. Reference

Profile & History of Primark

1. Company Profile & History
 Business activities done across national borders is international
business. The process of international business is the purchasing and
selling of the goods, commodities and services outside its national
borders.
 Such trade modes might be owned by the state or privately owned
organisation. The process of international trading is that to purchasing or
selling the goods, commodities and services outside its national borders.
 In which the organisation explores trade opportunities outside its
domestic national borders to extend their business opportunities.

2. E-business environment
 Present study will be based on the company Primark which planning to
open new store in the china market.
 However study will also going to discuss about the company
competitors and some Strategies that company can adopt to sustaining
in the long term market.
 Primark is the republic and Irish fashion retailer store which is
headquartered in Dublin.
 Further study will going to presents the market entry strategies for the
company and identify their macro and micro factors to analyse the
actual competition level within the market structure.

2.1 Digital Market analysis
 Expanding business into the new market is the kind of very effective
process for the business growth.
 To get entered into the new industry it required a systematic and
disciplinary process to assess the potential opportunity and strategy.
 Before entering, Primark should analyse the china market to measure
the competitors positioning and customer needs and wants, lifestyle,
behaviour etc.
 Primark is the well known clothing retailer company in UK which
also planning to open 10 more stores as its international expansion
supported a 17 percent increase in full years sales.
 and make better strategies to grab the attraction level of the
customers.

2.2 PESTLE Analysis
 China is one of the developing country in across the world. It also
known for its highly advanced techniques and creative thoughts which
represents the leading product or services growth in the market.
 The main reason of companies for choosing to enter into the china
market is that size of the market is huge, low cost availability of labours
and the potential of growth.
 For these reasons Primark also wants to open its fashion store in the
China market (PESTLE Analysis of china, 2015).
 In order to make their existence, company need to go through from the
actual conditions of the environment by adopting the model of Pestle
analysis into the study.

Political External environment factor
Government Regulations
 Political factor is the distinct external factor of the business
environment that company has to analyse before entering into the new
market first time.
 Political factors helps to more understand about their political,
governmental policies and regulations of the particular place.
 Such as China having both formal and informal rules, which company
needs to abide to stay its business into long term.
 Present China's government more focused on the development of E-
commerce systems.

Economical External environment factor
 From past few years, China economy got excellent success in the
market or in GDP growth as well. It reflects that, for Primark it is the
beneficial to make their business profit more easily in market of
china. It also affect the business into more appropriate manner.
 Economic environment of China is very good for running business
because of stability in educated employees, Low labour cost, stable
economic stability.
 Besides, China is also good for fashion industry where people are
more attractive towards the trendy clothes and always ready to try
some new fashionable clothing products.
 It is beneficial for the cited firm to get entered into the market. The
negative effect of economic factor are uncertainty of inflation and
down in the market.

Social External environment factor
 Social changes plays the most crucial role in the China fashion
market.
 Due to changes in peoplelifestyle, color fashion trend people get
influenced towards the new market performance.
 Social factor is one of the most essential factor that company needs to
understand within the market.
 Social factor get influenced from several factors such as new
technologies, different regional and cultural differences etc.

Legal External environment factor
 Ethics and compliance are important focus areas for the big
brands and they are working actively in the direction.
 Many of the labour in china engaged with the fashion retail
industry.
 Primark should has liable to followed the legal structure of the
country if they wants to exist in market for long term.
 Besides, environment law also affect the overall fashion industry
if company fails to full fill the legal implications imposed by
government.

Environmental
 Environment and sustainability is very much important for all the
country. For that, country make strict laws for those who wants to
make business in their own countries.
 Fashion industry or companies should always careful about the
carbon footprints and always dealing with environment friendly
products.
 Primark should always make sure about their product and services
and ensure they should not be harmful for any people.
 Company ensure and aware about that weather itsservices or
products affect the society.
 Besides, company also needs to invest in environmental
development in order to enhance the market image and attract
number of customers towards the company product or services.

3. Digital business technologies
Artificial Intelligence :Digital technologies is very helpful to innovate
new activities and also attract higher satisfaction level from
customers. Priamark adopt the Artificial Intelligence technologies
that helps to turn large and diverse data sets into enriched
information that will be more helpful for the company to enhance
the accuracy level and also very effective reduce the cost.
Augmented Reality : It is the another strategy that Primark can adopt
which offers a real time view of one's immediate surroundings
altered or increase by computer generated information.

To Be Continued...
Block chain : In order to adopt this technology that disperse digital
record that offers new opportunities for managing work more
effectively and in safer manner.
Contact less shopping : Another digital technology that can company
adopt that makes company selling process more smoothly.
Customers scan QR codes to enter the stores and select products and
then pay using their mobile WeChat wallets.

Digital Business Technology
• Primark should need to adopt new technologies and growth
in terms of expanding the business growth in the new era.
• It helps to grow the effective management and attract high
range of profit revenue.
• Primark also need to uses some more digital platform to
attract number of client attraction level.

4. Business Model
 Primark must adopt direct marketing strategy. This is because, it
may give them great opportunity so that they can directly promote
their goods and services to China as there is extreme need (Gubik
and Karajz, 2014).
 Therefore, adoption of this direct marketing campaign may lead in
providing customers with compelling content which they get an
opportunity of selling to potential customers and increase sales
accordingly.
 This strategy will help Primark to expand their brand in China in
easy and smooth manner. This makes work easy as there are limited
number of members involved in this process.
 So Primark can easily contact to those who are involved if anything
in this process goes wrong.

Business Model

5. Competitive Advantage
 Primark have a competitive advantage by supplying the
productive and effective valuable product or services with high
demand quality.
 Primark also have a competitive advantage by offering different
offers and new trend fashion supply to productive buyers.
 Company have total 176 outlets which is pretty much spread
across the country. This is the best advantage for the company.

Competitor analysis of Primark

5.1 Competitor Analysis
 China is termed as the toughest market in order to expand or
diversify business. China is one of the most competitive market in
terms of Fashion (Argyres, Bercovitz and Zanarone, 2016). There
were lack of brand in fashion that has achieved a market share of
more than 1%.
 Therefore, there are some domestic brands that outperform brands
of foreign market in china. Heilan home, jack and Jones, Uniqlo, E-
land are some of the competitors of China that Primark has to face
competition in order to expand their market.

5.2 SWOT Analysis
 SWOT analysis is the model which might be helpful for the company
to identify or measure their own position in the market and make some
more efficient decision making approaches for betterment.
 The present analysis will helpful to showing the strength, weaknesses,
opportunities and threats of Primark within the clothing retail market.

SWOT Analysis
Strength
The business model or strategies of Primark is based
on high sales volumes and lower retail margins that
helps China buyers to buy products at lower rate.
This is the key point for the company to make better
profit margin in the china market.
Primark purchases their material or goods at bull
level that might be very much helpful in growth of
the company to enjoy the low cost.
Weaknesses
Company held behind in the race of success and
getting low profit revenues.
Company less focused on the quality of the
material, Due to reason of manufacturing from
outsourcing. This can be the one reason that affect the
image of the company in the market.
Opportunity
Primark needs to focus on the expansion strategies
that growing the company popularity and global
consumer range.
Company can also expand their business in
production manner, or might adopt new range of
services to get the better customer response from
the market.
Threat
Primark consist threat of environmental due to
changing in trend, customer preferences, changing
in economic stability etc.
Supply chain is vulnerable to natural disasters and
other incidents.

6. Market business strategy
Direct exporting of goods and services means to sell their product and
services in foreign market directly.
 Once Primark established sales program they further turn to agents
in order to represent them in that particular market.
 For direct exporting, the cited company has to make agents or
distributors that may work in close manner in order to represent
interest.
 Therefore, Primark must keep in mind that the agents and
distributors must be treated in equal manner as that of key staff
person.

To Be Continued...
Direct exporting advantage
 The chance to make huge profits
becomes high since middlemen
and intermediaries are
eliminated.
 In transaction process, every
step is entirely in the hands of a
particular business including
total control of expenses and
also delivery modes.
Direct exporting
disadvantages
There is involvement of
additional expenses and
also of time which
becomes impossible for
cited company in order
to cope up with overtime.
There is requirement of
maximum efforts in order
to build loyalty customer
base. so this becomes
time consuming process.

To Be Continued...
Licensing advantages
Licensing leads in creating
opportunities for passive income
and cited company don't have to
do anything in order to generate
those revenues.
It creates new business opportunities
and also requires limited amount
of money.
Licensing disadvantages
It increases opportunities for
IP theft and misuse as
because of not having
control about operations
that licensee conducts.
There is no guarantee of
exclusivity with many
licenses that means
multiple business could be
competing in particular
market place.

6.3 Franchising
Franchising works in well manner for those firms that have a model of
business in repeated manner (Hombert and Matray, 2018). And that which
can be easily transferred into various markets.

6.4 Joint ventures-
 Joint ventures are particular form of partnership that basically
involves creation of third independently managed company.
 In this style of expanding the brand or business to foreign market,
two companies agrees in order to work together in a particular
decided market, either geographic or product.
 In this type of business risks and profits along with loss are
therefore shared in equal manner

To Be Continued...
Joint ventures advantages
 The major advantage of this type of business
is that it helps in growing business in faster
way and also in raising huge volume of
profit and high productivity.
 They have easy access towards new markets
and distribution networks.
Joint ventures Disadvantages
Partners that are involved do not
provide sufficient amount of
leadership and also support in
early or initial stages.
There arises a time when flexibility is
been restricted. This leads them in
focusing on joint venture and their
individual business has to suffer
maximum amount of risk due to
this

7. Recommendation
 Cultural context has major impact on values of people and also their
mode of thinking . Thus, there are various number of cultural norms
and values, that Primark of United kingdom needs to be aware in
order to spread their brand in China.
 China mainly prefers slower negotiations and UK prefer time as
money and tries to conduct any kind of deal in fast manner without
wasting time.
 Further, UK prefers instant gratification and also negotiations in
quick manner. In addition to this, when attitude comes in context,
then Chinese are basically open and flexible with process of culture
and value their culture more than that of product.
 While United Kingdom time and product are extremely important as
compared to any kind of process

8. Conclusion
 From the above report, it has been concluded that it becomes very
difficult to expand and diversify their business in global market.
 Tough competition in China creates difficulty for expanding their
business.
 Therefore, Primark has to adopt the best strategy to spread their brand.
 So the cited company choose direct exporting strategy where there are
lack of middle persons and export is done directly.
 This expansion leads them in achieving long term success and high
productivity.
 This may help company to achieve long term success and company
may reach the boost.

9. Reference
Cao, H., 2018. The growth of e-commerce and its impact on the fast fashion retailers.
Chen, F. and et.al., 2018. Geochemical Assessment and Spatial Analysis of Heavy Metals in the Surface Sediments in
the Eastern Beibu Gulf: A Reflection on the Industrial Development of the South China Coast. International
journal of environmental research and public health. 15(3). p.496.
Cortez, M. A. and et.al., 2014. Fast fashion quadrangle: An analysis. Academy of Marketing Studies Journal, 18(1),
p.1.
Fozer, D. and et.al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS process alternatives.
Journal of Cleaner Production. 147. pp.75-85.
Gheibi, M. and et.al., 2018. Controlling air pollution in a city: A perspective from SOAR‐PESTLE analysis.
Integrated environmental assessment and management.
Li, D. and Alexander, P., 2017. Analysis of drivers of customer satisfaction in the clothing
store’s e-commerce.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy incineration industry
in China. Renewable and Sustainable Energy Reviews. 80. pp.276-289.
Widya Yudha, S., Tjahjono, B. and Kolios, A., 2018. A PESTLE Policy Mapping and Stakeholder Analysis of
Indonesia’s Fossil Fuel Energy Industry. Energies. 11(5). p.1272.

THANK YOU