Business Strategy Analysis: Primark's Operations and Strategies

This report offers a comprehensive analysis of Primark's business strategy, examining its external and internal environments. It begins with an executive summary and an introduction to business strategy, followed by an overview of Primark. The PESTEL framework is used to analyze the external environment, while Porter's five forces are applied to the industry. The internal environment is assessed using a SWOT analysis. The report details Primark's business strategy, marketing mix, and the issues it faces. It concludes with recommendations for mitigating these issues and maintaining effective future operations. The report is based on the analysis of a major multinational organization named Primark that operates in the retail industry of the United Kingdom.

Running head: ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
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1ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
Executive Summary
The report is based on the analysis of a major multinational organization named Primark that
operates in the retail industry of the United Kingdom. The external environment of Primark
has been analysed with the help of PESTEL framework and industry is examined by using
Porter’s five forces framework. On the other hand, SWOT framework has been used for
understanding the internal environment of Primark. The business strategies will be developed
with respect to the internal and external analysis of the company. The issues faced by the firm
have also been discussed in the report. The recommendations are mainly based on the
methods by which the issues faced by Primark can be mitigated for maintaining the future
operations effectively.

2ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
Table of Contents
Introduction................................................................................................................................3
About the company....................................................................................................................3
PESTEL analysis of Primark.....................................................................................................3
Porter’s five forces analysis of Primark.....................................................................................5
SWOT analysis of Primark........................................................................................................6
Business strategy of Primark......................................................................................................7
Marketing mix of Primark..........................................................................................................8
Issues faced by Primark.............................................................................................................9
Recommendations......................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

3ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
Introduction
Business strategy can be defined as the set of different decisions and course of actions
that are able to assist the entrepreneurs to accomplish the business objectives. The firm is able
to develop a competitive edge in the industry and can also carry on the operations in order to
satisfy the customers. The direction and goals that have been set by the organizations are
considered to be an important part of the business strategies that are implemented. The
competitive moves and actions that are implemented by organizations can have an impact on
the operations and future processes as well (Adekola and Sergi 2016). The business strategies
are further formed by the organizations with respect to the internal and external environment
analysis that is conducted and analysis of the industry that is completed as well. The report
will be based on the analysis of business approaches that have been applied by Primark in
order to operate in the UK retail industry. The internal and external environment of Primark
and the industry of its operations will also be discussed in the report in detail. Marketing mix
of Primark will be analysed with respect to the products that it offers to the customers
(Aguinis, Edwards and Bradley 2017).
About the company
Primark is an Irish fast fashion based retail organization that has its headquarters in
Dublin, Ireland and is mainly a subsidiary of a major food processing organization named
Associated British Foods. The first store of Primark was established by Arthur Ryan on the
behalf of Weston family (Primark.com 2020). The international business operations of
Primark had started in the year 2015 within a redeveloped building in Dublin. Primark mainly
offers a wide range of products that mainly include children and baby clothing, menswear,
women’s wear, footwear, accessories, confectionary and beauty products. Primark has been
able to major levels of contribution to the trend of contemporary fast fashion along with the
organizations like H&M and Zara (Primark.com 2020).
PESTEL analysis of Primark
Political factors – Britain had voted to leave European Union in the year 2016 and
this move had been able to cause huge levels of economic and political uncertainties in the
country. The political turmoil had a negative impact on the organizations that are currently
operating in the country. The retail organizations like Primark have to face major issues

4ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
related to the uncertainty that has been formed in the economic and political environment of
the UK (Angelsberger et al. 2017). Primark has however benefitted to some extent due to
weak pound that had started falling against Dollar and Euro. The parent organization of
Primark ABF had stated that decision that had been made by Britain to leave the EU had been
able to create huge levels of uncertainty in the business environment. ABF had mainly noted
that the implementation of Brexit can have an adverse and transactional impact on profits that
are gained by the UK based sales (Aithal 2017).
Economic factors – The pound had plunged to its lowest against dollar as the
financial turmoil had started increasing after the Brexit decision. The status that London had
been able to gain as financial hub of entire Europe had also been under pressure the as the
investors had threatened to pull the funds out from different businesses (Castaño, Méndez and
Galindo 2016). Associated British Foods or ABF had then indicated that although the UK
referendum based on the decision of Britain to leave the European Union had created huge
levels of threats in the political and financial environment, the weak pound had proved to be
quite positive for the operations of retail organizations. The clothing retailers have been able
to gain huge levels of benefits from the fall of pound that has taken place due to Brexit
(Brannen, Piekkari and Tietze 2017).
Social factors – The rise of aging population and obesity levels is considered to be a
major socio-cultural trend that has an impact on the products that are offered by the retail
organizations. UK is currently referred as the “fat man of Europe” and the obesity trends have
an impact on the products that are offered by the organizations like Primark. The trends are
able to influence the shopping habits of different female shoppers who avoid the stores like
the Top Shop and Zara due to the lack of plus-size based ranges. The rise in obesity levels
have provided major gap based opportunities to the clothing retailers that are a part of the
country. The ageing population of the UK has an impact on the product base of firms like
Primark and the retailers as well (Cumming and Zahra 2016).
Technological factors – The acceleration that has been seen in the growth of e-
commerce has been able to influence the traditional brick and mortar based stores and
organizations. The competition levels have also increased for the physical retail organizations
due to presence of different online retailers in the industry. The competitive space that has
been opened due to increase in online organizations have an impact on the customer base of
the firms like Primark. Primark has not operated an e-commerce based website and this has

5ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
reduced the customer base of the organization in a huge manner (de Vasconcellos, Garrido
and Parente 2019).
Environmental factors – The trends are currently influencing the clothing retail
industry that is mainly related to the rise of consumers who are environmentally and ethically
conscious in nature. The consumers have started demanding the products that are
environment-friendly in nature and also adopt the sustainable packaging practices. The
sustainable lines of clothing have also been able to influence the ways by which retail
organizations are able to maintain their position. Government pressure is also being felt by
Primark based on the development of products that are sustainable in nature (Durand, Grant
and Madsen 2017).
Legal factors – The recent employment regulations that have been implemented by
the organizations in clothing industry have an impact on the operations of Primark. The
pension based legislations have made it compulsory for the organizations to develop different
regulations in an effective manner (Engert, Rauter and Baumgartner 2016).
Porter’s five forces analysis of Primark
Threats of the new substitutes – Primark has aimed to reduce the threats related to
substitutes of different products that are offered by other organizations like Top Shop, Tesco,
ASDA and Zara. Primark has aimed at providing huge discounts to the consumers in order to
attract them towards the organization. The customer switching based costs that are faced by
Primark are also able to reduce the substitute related threats (Gans and Ryall 2017).
Competitive rivalry – The UK retail based industry mainly comprises of different
retailers and Primark is currently operating in a highly competitive environment. The major
competitors of Primark include Gap and Next who have been able to exploit clothing based
demands for the young people. The barriers related to entry and exit of the retail
organizations are quite low in the UK and the foreign retailers are able to establish the
business operations quite easily. The stiff competition that is being faced by Primark due to
this factor has led to the loss of loyal customers (Hannibal and Knight 2018).
Threats of the new entrants – Primark is not able to control the entry of new firms in
the retail market of the UK. The ease related to entry of new firms is mainly based on the
lenient policies that are developed by the government of the United Kingdom. The new

6ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
organizations that aim at entering the UK retail industry are thereby provided with huge
levels of incentives by the government (Hanson et al. 2016).
Bargaining power of the suppliers – The bargaining power of the suppliers in retail
industry have to be controlled by the organizations for the purpose of maintaining prices of
the products. The supplier base that has been formed by Primark is quite huge and this has
been able to play a major role in reducing their bargaining power. The organization is able to
obtain the raw materials at lower costs due to the presence of huge number of suppliers. The
costs that are faced by Primark based on the switching of suppliers are quite low (Hitt,
Ireland and Hoskisson 2016).
Bargaining power of the buyers – Primark has gained its position as one of the
biggest retailers in the UK. The firm has been able to gain a huge customer base in the retail
industry and this is considered to be a key aspect that has an influence on the prices of
products of Primark. The upward based prices of products offered by Primark are reviewed
on a regular basis due to the increase in levels of competition in the industry. The increase in
prices of the products can however lead to the loss of huge number of customers of Primark
(Holmes Jr. et al. 2018).
SWOT analysis of Primark
Strengths – Primark has been able to gain huge levels of success in the last few years
due to the value proposition that has been formed based on low prices of the products. The
low cost based leadership that has been gained by Primark is considered to be a key factor
that is able to influence the growth in revenues and profitability. The core strength of Primark
is based on cheap clothing that is offered to the customers which has helped the organization
to overtake Arcadia Group (Hutzschenreuter, Kleindienst and Lange 2016).
Weaknesses – The most significant weakness that is being faced by Primark is related
to the perceptions of the consumers related to implementation of unethical practices. The
downsides of the fast fashion based brands have an impact on the perceptions that are formed
in minds of consumers. The basic nature of the brand of Primark is also considered to be a
major consumer perception that has an impact on the value of the organization. The high
dependency of Primark on the UK retail market is considered to be an important weakness
that is faced by the organization. The lack of proper online presence of Primark has proved to

7ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
be a major weakness that is able to influence the revenues that are gained by the firm
(Ibrahim, Abdullah and Ismail 2016).
Opportunities – A major gap has been developed in the market due to rise in the
obesity levels and Primark can use this opportunity in order to cater to the plus-size
consumers. The firm has ventured into the US market with a physical store that has been
developed in Boston and around 10 stores are also planned in various parts of the country (Jin
and Jung 2016).
Threats – The Brexit based plan has led to the increase in levels of uncertainty for the
business organizations like Primark that has its operations in Europe. The parent company of
Primark namely ABF has also stated that the decision that has been taken by Britain to leave
the European Union will increase levels of uncertainty. The adverse effect of Brexit on
Primark is also considered to be quite huge and is considered to be a major threat for the
organization (Lasserre 2017).
Business strategy of Primark
Growth strategy of Primark - The growth strategy that is used by an organization is
considered to be a vital aspect that is related to the operations of the businesses and the ways
by which needs of consumers can be fulfilled. Primark aims at maintaining or increasing the
shares in the market with the support that is provided by the competitive pricing based
strategies. The dominance of growth based markets can have an impact on driving out the
competitors with the help of aggressive promotional campaigns. Market development is
considered to be a major growth strategy that is able to play a key part in enhancement of the
shares of Primark in the retail industry (Lindstrand and Hånell 2017).
Diversification strategy of Primark - The diversification strategy is implemented by
Primark in order to reduce the levels of risks that are being faced by Primark in the retail
industry. The business strategy developed by Primark is mainly based on the brand portfolio
that is formed by the organization in retail industry. The extensive brand portfolio of Primark
is considered to be a major factor that has led to the improvement of its position in the retail
industry. Risk minimization is able to influence the brand portfolio of Primark and increasing
the customer base as well (Mathews et al. 2016). The target market of Primark has been
identified as a part of the brand strategy of the organization. The brand image of Primark is
also able to play a key part in the proper development of business strategies that can help

8ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
Primark to maintain its place in the retail industry of the UK (López‐Duarte, Vidal‐Suárez
and González‐Díaz 2016).
Generic strategy of Primark - The cost leadership strategy has been applied by
Primark in order to offer a wide range of products to the consumers at lowest prices. The
organization has also aimed at reduction of costs related to manufacturing and labour in order
to maintain the low prices. Primark has reduced the production prices with the support that is
provided by reduction of labour wages and low maintenance of factories as well. Cost
leadership strategy has helped Primark to maintain its position in comparison to the
competition that is faced from the other retail organizations (Ibrahim, Abdullah and Ismail
2016).
Marketing mix of Primark
Price – Primark has been able to gain its place in the UK retail industry as the cost
leader based on the usage of low cost based materials. The cost leadership strategy is able to
play a key part in proper of reduction of the prices of different products that are offered by
the retail organizations. The price based factor is able to attract the consumers who enjoy the
low prices of products and enhancing the clothing range as well. The high priced products of
Primark are also offered to the customers as a part of the exclusive clothing range that is able
to fulfil different needs of the customers (Parboteeah and Cullen 2017).
Place – The partnerships and pricing strategies with the department stores like
Birmingham and Selfridges has raised various viewpoints based on the ways by which
Primark is mainly suited in a particular location. The benefits that are gained by Primark
based on partnerships with the department stores are considered to be mutual in nature
(Thomé and Medeiros 2016). The lack of online presence of Primark has been fulfilled with
the help of the physical stores that are formed by Primark in different parts of the world. The
entry of Primark in the US retail industry has not proved to be successful for its operations
and revenues that have been gained by the organization. The difference in shopping culture in
various countries can also affect the physical stores that are developed (Roberts 2018).
Promotion – Primark has relied in a huge manner on the customer base that has been
formed in different parts of the world. “Word of mouth” based advertising is considered to be
a major factor that the company relies in order to enhance the profitability levels. The lack of
success of Primark in the US retail industry was mainly related to low word of mouth based

9ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
advertising activities in the country. The website of Primark is mainly used for the purpose of
advertisement related activities that are performed in order to attract the consumers towards
the firm. The “in store visually stimulating quality” is considered to be an important part of
the advertising related activities that are performed by an organization like Primark
(Trąpczyński 2016).
Product – The wide range of the different products that are offered to the consumers
have the ability to appeal to the various personalities who are a part of the similar customer
segments. Primark has provided exclusive range of the products to different customers who
have different types of needs. The dedicated lines of clothing are a major part of the product
lines that are offered to the customers. The psychological impact that value of the products
have on the customers are based on different product ranges that are offered by Primark
(Wales et al. 2019).
Issues faced by Primark
Primark has been able to gain its position as one of the major retail organizations in
the UK. The business approaches that have been formed by the organization are mainly
related to the ways by which Primark aims at reducing the costs related to production. The
cost leadership strategy has been applied by the organization in order to provide its wide
range of products to the consumers at lowest prices. The company has thereby faced major
issues related to its ethical operations in the industry (López‐Duarte, Vidal‐Suárez and
González‐Díaz 2016). The major issues that have been faced by Primark are as follows,
 The ethical issues are faced by Primark with respect to the factory conditions
of the organization in the developing countries. The wages that are provided to
the labour in countries like Bangladesh are considered to be quite low in
comparison to the standards that have been set. The company had faced a
major challenge based on its operations in Rana Plaza in Bangladesh that had
led to the death of huge number of workers (Hitt, Ireland and Hoskisson
2016).
 Primark has faced major levels of criticism based on the poor conditions that
the suppliers are facing by the Sri Lankan suppliers. The suppliers have been
facing major health related issues during the operations and production
process of Primark (Irishtimes.com 2020).

10ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
 The cheap prices of products that are offered by Primark have led to
development of a different perception in the minds of consumers related to
quality. The chain stands have been criticised in a huge manner due to the
implementation of low prices. The consumers had developed a perception that
the organization does not maintain ethical standards due to the low prices
(Hutzschenreuter, Kleindienst and Lange 2016).
Recommendations
The issues that are faced by Primark are mainly based on the low priced strategies and
the lack of proper ethical standards as well. The company can be provided with major
recommendations based on the ways by which it aims at improving the operations by
reducing issues that are faced. The recommendations that are provided to Primark are as
follows,
 Primark needs to improve the standards of the factories that are developed in
the emerging countries like Bangladesh and Sri Lanka. Maintaining the health
conditions of employees of Primark can influence the future processes of the
firm in the retail industry of the UK.
 The suppliers of Primark have to be maintained in an effective manner by the
organization for the purpose of improving the operations in the retail industry.
The issues that are being faced by Sri Lankan suppliers can be reduced by the
organization with the help of attention that the management of Primark
provides to the wages that are provided to them.
 Primark needs to aim at changing the perception of the consumers regarding
the prices of different products that are offered to them. The company needs to
implement various steps for the purpose of developing an effective brand
image in the minds of the consumers. The consumer perceptions are able to
play a key part in the development high levels of revenues for Primark in the
retail industry of the United Kingdom.
Conclusion
The report can be settled by stating that the business strategies that have been
developed and applied by Primark are mainly based on the changes in the external business
environment. The internal environment of Primark and the industry of its operations have

11ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
also been taken into consideration for development of different business strategies. The brand
value of Primark has been maintained with the help of proper implementation of different
business strategies that are developed by Primark. Business strategies of the organization
have an impact on the customer base that is formed by Primark in the retail industry. The
marketing mix of the firm has also been formed with the support that is provided by the
business strategies and the needs of consumers as well. The issues which Primark has been
facing in its operations in the competitive retail industry are mainly related to the ethical
considerations and the perceptions that have been formed in the industry as well. The
recommendations are mainly provided with respect to the ways by which Primark will be
able to maintain its position in the industry by proper mitigation of the issues that are being
faced. The mitigation of different challenges are considered to be important for the
organization so that it can maintain the profitability levels in an effective manner.

12ANALYSIS OF BUSINESS STRATEGY OF PRIMARK
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