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The business environment affecting the clothing retail industry in the UK is made up of both the macro and micro environment. The macro environment is the most general layer of the business environment and consists of broad environmental factors that impact all organizations across all industries so firms use frameworks such as Pestel and Swot to analyse environmental factors. The starting point for analysing macro-level influences is Pestel which is used in this report to identify how both current and future trends in the political, economic, social, technological, legal and the environment impact the UK clothing retail industry as well as individual firms like Primark. This is followed by Porters five forces analysis to examine the impact of Porters five forces on Primark as well as Swot to assess how the internal strengths of Primark can be leveraged together with external opportunities to mitigate existing weaknesses and external threats from the environment.

HARVARD

Jonathan Kush (2017) "Pestle and Swot Analysis of Primark 2016-2017" 123 Writing [Online] at https://www.123writing.com/free-sample/pestle-and-swot-analysis-of-primark-2016-2017

 

Primark Strategy Case Study


Key Learning Outcomes

By the end of the case, students should be able to:
  • Understand the broad macro-environment of Primark and the clothing retail industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL).
  • Use our swot analysis example to gain an overall understanding of Primarks strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the analysis of the business environment.
  • To apply strategy business models and frameworks such as Pestle, Swot etc to real company cases.

Analyse the internal & external environment of Primark using Pestle and Swot and give some recommendations and personal suggestions for the organisation’s future strategic practice.

1.0 INTRODUCTION


Primark is an Irish clothing retailer with operations in the UK, France, Germany, Italy, Spain, and Ireland (operating as Penneys) and recently the USA. It is a subsidiary of Associated British Foods after being acquired in 2005. With global turnover totalling £5.4billion for the year ending 2015, Primark has enjoyed tremendous success in the last couple of years. Primark’s value proposition of low prices has ensured it becomes the low cost leader in low-priced, “disposable” fashion. This has attracted a lot of customers especially following the 2008 financial crisis and subsequent recession as cash strapped consumers flocked to it due to low prices. As a result, the Primark has enjoyed successive revenue growth and profitability since 2007 (see figure 1).

Figure 1: Primark revenue growth worldwide 2007 – 2019 (in million GBP)

Primark revenue growth worldwide 2007 - 2019

2.0 Analysis of the business environment affecting the UK clothing retail industry 2016-2017

The business environment that is affecting the UK clothing retail industry is made up of both the macro environment and micro environment. The macro environment is the most general layer of the business environment and consists of broad environmental factors that impact all organizations across all industries so firms use frameworks such PESTLE Analysis as well as others such as Porters Five Forces framework and SWOT to help them analyse the macro environment.

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