Primark Case Analysis

Primark is a subsidiary company of the Associated British Foods (ABF). It was first opened in Dublin in June 1969, which under the name Penneys. Four more stores were launched within a year in Ireland afterward. Currently, Primark operates in over 270 stores in 9 different countries in Europe such as United Kingdom, Germany, Spain, etc. Primark capitalised on the fast-fashion tendency that began in the 1990s as well as the capability to produce garments cheaply in Asia where clothing values fell dramatically (Shawcross, 2014). It offers a diverse range of products which includes kids clothing, menswear, womenswear, accessories, home ware, beauty products and confectionary. According to TNS market research ranking, Primark ranks the second

This implies Primark is not rely on one particular supplier. The company is capable switch to another supplier easily if the costs increase. Hence, Primark can control the costs as well as improve its margins in the long term.

Primark has a huge customer base for being one of the largest clothing retailer in the UK. Nonetheless, the bargaining power of buyers is relatively high due to the large quantity of competitors in the industry. Buyers are price sensitive and they will probably seek for the lowest price before purchasing an item. There is no switching cost in the market so customers are likely to buy products in other store once they discover a cheaper price.

The competitive rivalry is high as the industry is comprises of many clothing retailers. For instance, ASDA’s brands George and Matalan, which provide not only quality garments but also sell them in a low price. Primark may lose a significant number of customers due to the intense

It has employed over 50,000 people around the world. It is easy for people to be aware of Primark since the stores are nearly everywhere. Moreover, Primark provides a diverse range of apparels such as menswear, womenswear, children’s wear, etc. It offers high street quality garments at the rock-bottom prices and quality service to people. It can satisfy most of the customers’ needs due to the variety of products and the reasonable price of merchandise. Furthermore, Primark has a huge number of customer base which lead to the profits of the firm has increased in every year. The company’s revenue in 2015 (5,347 million) is around 3 times more than the revenue in 2007 (1,602 million) (Statista, 2016). This implies Primark has reached the climax currently and not easily to be beaten by other competitors. Another strength of Primark is that the company is one of the member of Ethical Trading Initiative (ETI), which focuses on employees’ rights. It can increase Primark’s reputation if people recognize the firm has showed respect to its