QAB020N522S - Analyzing Primark's Strategies in the UK Retail Market

This report identifies the major changes facing Primark in the UK fashion clothing market. It analyzes the micro and macro environments using SWOT and PESTLE analyses, recommending strategies and tactics for Primark to respond to these changes. The report uses the Wheel of Retailing theory to analyze the retailing environment and suggests potential strategies accordingly. Key changes are identified, and alterations are recommended based on the environmental analysis. The report covers Primark's strengths, weaknesses, opportunities, and threats, as well as political, economic, social, technological, legal, and environmental factors affecting the company. The analysis includes a discussion of strategies for Primark to adapt to the evolving market, including setting up stores in developing markets and capitalizing on the growing sportswear segment. The rise of online shopping and changing consumer behavior are also addressed as threats.

Running head: RETRAIL THEORY AND PRACTICE
RETRAIL THEORY AND PRACTICE
Name of the Student
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Author Note

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Executive Summary
The purpose of this report will be to identify the major changes that are facing by Primark, an
organization from Ireland and operates in European and American market in the fashion clothing
market place. The recent changes that are followed by the management of this company will be
discussed in this report. Strategies will also be discussed and suggested along with the tactics that
can be used by the management of Primark to respond to the identified changes that are
occurring in the fashion market of the places where Primark operates. The micro as well as
macro environment analysis will be done on this organization through the help of SWOT and
PESTLE analysis, which will help to identify the issues that are taking place in the fashion retail
market globally. 5 to 6 key and applicable alterations will be recommend based on the macro and
micro environmental analysis of Primark. Wheel of Retailing will be used as the major retailing
theory in this paper to analyze the retailing environment, and potential strategies will be
suggested accordingly. A brief conclusion will include the summary of the major points of
discussion at the end of this paper.

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Table of Contents
Introduction......................................................................................................................................4
About the Organization....................................................................................................................4
Major Changes within the Micro Environment...............................................................................5
Strengths......................................................................................................................................6
Weaknesses..................................................................................................................................6
Opportunities...............................................................................................................................7
Threats.........................................................................................................................................7
Major Changes within the Environment Analysis...........................................................................7
Political Factors...........................................................................................................................7
Economic Factors........................................................................................................................8
Social Factors...............................................................................................................................8
Technological Factors..................................................................................................................9
Legal Factors...............................................................................................................................9
Environmental Factors.................................................................................................................9
Suggestion and Discussion of the Strategies.................................................................................10
Recommendation of Strategies......................................................................................................11
Conclusion.....................................................................................................................................12
Reference.......................................................................................................................................13

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Introduction
The main aim of this report will be to identify the major changes in the fashion clothing
market of the region of the United Kingdom from the viewpoint of the organization of Primark,
which is a fashion retail giant operates in the markets of Europe and the United States of
America. Fashion retail, in this context, can be regarded as the segment of business that operates
in between the customers and manufacturers. In other words, fashion retailing is also known as
the process of buying different and wide array of clothes from the manufacturers and sold them
to the ultimate customers. The needs and requirements of the people are identified and the details
are sent to the manufacturers, who designs the clothes and make them final product and the retail
organizations like Primark sell the finished product to the customers across the markets where
they operates. Hence, it can be noted that the purpose of this report will be to discuss the key
applicable changes that has occurred within the fashion retail market of the United Kingdom,
which will be analysed through a PESTLE analysis on the macro environment of Primark, along
with a SWOT analysis that will be based on the micro environment of this organization. 5 to 6
key and applicable alterations will be recommend based on the macro and micro environmental
analysis of the organization of Primark, which possess the most influence on the business
operations performed by Primark in the United Kingdom. Wheel of retailing theory will be used
here to analyse the retailing environment of this organization in the region of the United
Kingdom and potential solutions or strategies will be suggested accordingly. At last, a brief
conclusion will include the summary of the major points of discussion of this paper.
About the Organization
As discussed, Primark has been selected as the fashion retail company to be discussed in
this paper. This business house was established in the year 1969 and is involved in fast fashion

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retailing. Headquarter of this business entity is in Dublin, and it can be noted that this
organization is a subsidiary of Associated British Foods (ABF), which is engaged in food
processing and retail businesses. Till 2019, there are 373 outlets of Primark which are present in
the markets of Europe and the United States, involving 12 countries. Apart from clothing, the
products which are sold from the outlets of this fast fashion retail company are housewares and
cosmetics. Latest fashion trends are offered by the management of this organization through their
outlets. It can be noted in this context that the biggest outlet of this company has been opened in
the city of Birmingham in April 2019 (primark.com 2020). The management of this globally
reputed fashion brand has successfully placed the brand through the destination store, though
there are competition from other branded fashion faints like H&M, Next, Zara, Marks and
Spencer, Mothercare, Select and others. It can be noted in this context that Mothercare is the
number 1 competitor of Primark, which was founded in the year 1961 and headquartered in
Watford. 16% more revenue is generated by this consumer goods provider entity than what is
earned by the organization of Primark. Primark is positioned as the latest fashion retailer which
provides a wide array of clothes at reasonable price. In other words, it can be stated that this
organization is positioned in the Lower Middle Value Sector in the normal merchandising
market place, where the main focus of this company is to provide Family Safe fashion to the
customers of the United Kingdom. This has helped to position their products
Major Changes within the Micro Environment
SWOT analysis will be used to analyze the micro environment of the organization of
Primark (Ortega and Okechukwu 2017).

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Strengths
Offering good quality fashion at affordable prices is one of the major strength that is
enjoyed by the management of this company. It can be stated in this context that an extensive
range of collection which includes womenswear, menswear, childrenswear, accessories,
footwear and lots of other fashion items. Depending on word-of-mouth publicity has helped to
increase the overall sales of the wide array of clothing and other fashion accessories that are sold
by this company. Payment to the family who suffered in the Rana Plaza complex incident that
was occurred in the year 2013, where 1,135 people were killed due to the collapse of the
building. It can be noted in this context that Dhaka is the second largest exporter of readymade
garments, and Primark is one of their major customers (theguardian.com 2020). Following of
vertical marketing system is another strength that is possessed by this organization. This helps
them to possess an advantageous position in development of creation and design of the wide
array of fashions sold by them (mckinsey.com 2020). Effective sales messaging are circulated by
the management of this fashion giant along with possessing improved brand recognition, which
targets the profitable customers of the British market effectively.
Weaknesses
One of the major weakness that is faced by this company is closure of the high street
stores. Poor working conditions and disrespecting the employees of this business entity is
another prime weakness of Primark. Non-promotional techniques have also weakened the hold
of the market that are enjoyed by other rival institutions in the American and European markets.
It can be noted that advancement in the area of technology has increased the competition
between the business houses as well as increased the satisfaction level of the customers. So,
usage of promotional techniques has helped the rival business entities to gain the more

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competitiveness than Primark. Slow growth of the British market is also another weakness that is
faced by the management of this business house.
Opportunities
Setting up stores in developing market places like India and Middle East will be a great
opportunity for the management of this business house. This will help them to increase the
overall market share and the revenue earning for the company. Apart from this, sportswear is
becoming as one of the fastest growing fashion segment for the organization of Primark, and it
can be noted that people of the United Kingdom are very much sports loving people. So, it can
be said that this segment will help to increase both the market share and revenue for Primark.
Threats
One of the major threat that is faced by the management of this organization is increase in
the online shopping behavior among the people across the market place where they operates.
Usage of smartphones has increased the urge among the people to use online shopping websites,
and has decreased the footfall in all the stores that are present in the overall region of the United
Kingdom. Most of the rival business entities have their presence in online shopping, which has
become a serious threat for this company. People are also throwing away the fashion culture, and
this seems that the golden age of this culture is over.
Major Changes within the Environment Analysis
PESTLE Analysis will be used to analyze the macro environment analysis of the
organization of Primark.
Political Factors
Stability of the government of the regions where Primark operates affects the businesses
operated by this fashion retail giant. Brexit may affect the overall business operations of this

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company. This will benefit this company as the exchange rates will become low under Brexit.
Primark turns out to be one among the cheapest retailers in the market of UK. Due to the
presence of high VAT in business, it has become difficult for the company to maintain a low cost
for the customers. This increased VAT affects the competing brands of Primark as well, of which
the company needs to be worried about. This rise in VAT explains why the chain of stores of this
company has gone through a reduced demand. The Brexit may also affect the business
operations of Primark.
Economic Factors
The buying behavior of the customers of different fashion garments affect the flow of
business operated, and the management has to alter their strategies to fulfill the satisfaction level
of the customers present in the global market places. While going through a period of recession,
buyers cannot spend huge money on clothes and moves to the down market. Primark is the
clothing chain of cut-price which helps them to get customers who deceased to the down market
from the up market. Due to this, they achieve cent percent hike in profits. According to reports in
the UK food market, Primark has done well in both good and bad times.
Social Factors
Changes in the lifestyle of the people hugely impacts the decision making of the
management of the company of Primark. Apart from this, changes in the demography of the
regions where Primark operates also possess impacts on the strategy and decision making for this
company. The social mobility of UK has been affected by the recent recession. Levels of
unemployment have risen higher because of this recession, which has restricted the growth
opportunities. Customers have increased in number as people tend to live longer lives, which
refers to the fact that people will spend more throughout their lifetimes. Not only people aged

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under 35 but also above 55 represent a good business probability for the company (Popa and
Salanta 2014).
Technological Factors
Advancement in the area of technology has impacted hugely on the fashion retail
business performed by Primark. The needs and wants of the people are ever-changing and
successfully meeting these demand will help to enjoy the competitive advantage over the rival
institutions that are present in the market places where they perform. Social networking and
other web platforms helped Primark to reach a wide range of customers around the globe.
Facebook is one of their most utilized social media to keep the customers updated about their
latest promotions and increase the fan base. Through such platforms, the company also gets its
products promoted by word of mouth. It also helps the company to get data from millions of
customers and thus boosts promotion.
Legal Factors
Policies related to the payment of taxes often affects the flow of the business operations
of fashion retail giants like Primark. The new Workplace Pensions Legislation has make it
compulsory for organizations like Primark to contribute 3% to an employee’s pension scheme.
Like any other clothing business, Primark must adhere to the tax rules, export restrictions and
costs of inflation by the UK government. Employee rights should be also considered important
as they manufacture their products in another country. Only cheap products cannot attract
customers unless it maintains the standard and quality.
Environmental Factors
Regulation and protection related to protection of the environment is a must followed
factor by this fashion retail organization from Ireland. Corporate social responsibilities are

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followed by this company in order to safeguard the people through achieving a sustainable
business approach. UK has improved the negative effects of the environment very significantly.
Initiatives have been taken by the government and local councils to promote environmental
awareness. While manufacturing the clothes, Primark must try to carry out the processes in a
sustainable method. They must also take initiatives to reduce the production of wastes from
garment factories and reduce the usage of plastics and other non-biodegradable items while
importing and exporting (Dach and Allmendinger 2014).
Suggestion and Discussion of the Strategies
Wheel of Retailing Theory will be used provide the suggestions and discuss the strategies
that need to be followed by this company (Goswami and Goswami 2017). This theory involves
the patterns of the major recent retail improvements where fresh retailers enter the market place
of a selected region as low in status and prices, which helps them to penetrate into that market
place and increase both their market share and profit earning level. At the end, they end up as the
matured market players in the retail fashion market and possess threat to the new or fresh
entrants. Sustainable business approaches can also help them to sustain for longer period of time
in this market place, and it can be stated that corporate social responsibilities performed by the
management of this business house will automatically place them in the leading position in not
only in the British market place, but in other parts of the world where they operates.
Currently, Primark is in Stage 3, where Primark is in a stable position and are enjoying a
decent margin of profit. It can be stated in this context that this is the most profitable stage for a
retail organization, and the same is enjoyed by this globally reputed fashion retail giant. From
both the micro and macro environmental analysis, it can be stated that vertical marketing system
will be one of the most important tool that can be used by the management of Primark. The other

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three stages of this wheel states establishment and penetration in the market (Stage 1), expansion
in the market (Stage 2) and stabilization of business model to attract margins (Stage 3) (Rafiq
2014).
It has been already discussed that alterations in the lifestyle of the people hugely impacts
the decision making of Primark. Apart from this, changes in the demography of the regions
where they possess a retail outlet operates also possess impacts on the strategy and decision
making for this organization. Satisfying the needs and wants of the customers in this global
modern competitive world, that too without having their online presence is a tough job (Lotila
2014).
Recommendation of Strategies
After analyzing the micro and macro environment of the business operated by Primark,
following are the recommended strategies that can help the organization to make better the
position of this company:
An online e-commerce service need to be implemented by this company, which will help
to utilize the opportunities that involve the online shoppers. It has been already discussed that
online shopping is getting more popular nowadays and this should be the main area of focus for
the management of Primark. This will help to target the online customers and utilize the
opportunities that are present in this online shopping market place (Guercini and Runfola 2015).
Strategic groups can be made and implemented by the management of this company,
which will help to target a particular segment within the British market place and possess a
separate strategy for that group. This will help Primark to operate as a more customer-centric
approach and fulfill their demands, so that the customer base can be maintained along with
maintaining the rate of earning profit for them.

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Separate offers and discounts need to be provided to both the online and offline
customers, so that it will help Primark to possess a healthy customer base, which will help both
to earn more revenue and increase the market share, which will help to gain sustainable
competitive advantage in the British market place (Perry and Wood 2018).
Conclusion
From the above discussion, it can be concluded that Primark possess opportunities which
the need to utilize through the recommended strategies and actions. From the macro and micro
environmental analysis, it can be stated that Primark is in a position from where they need to
follow sustainable business approaches in both offline and online market places. This will help
the management to overcome the weaknesses and threats and enjoy a sustainable approach by
utilizing the opportunities by the strengths possessed by this fashion retail company.