Retail clothing industry is fastest and growing industries & from the start of the globalization, this industry has become one of the favored industries. The rise and growth of different designers has also contributed to the growth of the industry. Many of the clothes that are sold in US and UK are produced in developing countries where there is availability of cheap labor and material. Retail industry has grown in the past five years but face many different challenges and price-based competition. The revenue of this industry has grown to increase by 2.5% in the total $2.7billion. the following diagram shows the global growth of apparel industry around the world.
Some important success factors are determined by the IBISWorld for cloth retailing (Ibisworld.com.au, 2019).
• This industry has the ability to make control on stock at hand.
•This industry has a clear position in the market
•The production of the goods is favored by market
Primark is the Irish clothing retailer with numbers of the stores in United Kingdom, Spain and Ireland. In total, there are 170 of the Primark stores, of which 125 are located in the United Kingdom, of 35 stores are in the Ireland & around 10 of them are in Spain. In 1969, the very first store of Primark was established in the capital city “Dublin” of Ireland. Arther Ryan in collaboration with the Micaela Mitchell started this first store. After the success of first store, they decided to open and expand the chain by starting different stores in business centres in the local & regional areas, thus generating many profits. Success of store in Ireland led for the store expansion in UK. In 2015, Primark developed their international headquarters in the Dublin building. The core objective of the Primark is to offer best services for their customers. Every store has customer-service department in which trained representatives of customer staff help customers in their concerns for problem solving. At Primark, the exchange policy says that exchanged or money can be refunded by 21 day-time from purchase date. They provide good quality at reasonable prices. The marketing strategy involves the “value for money” and slogan is the “look good and pay less.
Diverse and variety of different products are offered by Primark that includes the men’s wear, women’s wear, footwear, accessories, homeware, confectionery, beauty products and clothes for newborn and children’s. in 2004, Primark welcomed the Sephora products that are sold at the starting costs of £1 (Pretious & Love, 2006). Moreover, vegan snacks are also sold by January 2018. Primark sells the clothes at the very low cost as compared to market prices.
Denmark is the country of Europe that has wealthy economy with GDP per-capital highest among other countries of the world. The population of 5.7 million of Denmark enjoys a high standard of living in this modern economy and with all technological and social advancements in place. Denmark promotes different business practices & implemented various reforms with respect to investment and regulation policies. According to forecast of 2017-2022, it is estimated that retail sector of the Denmark expects to grow for CAGR of the 2.3% (Store.marketline.com, 2019).
The fashion brands of Denmark are quiet famous around different parts of the world. this due to various reasons that includes the increase in awareness for global trends of fashion & global exposure for native brands. Moreover, increase in number of the working women & social-media exposure are other reasons for the increase in demand (Strijbos, 2019).
There are also other substitutes available in the retail market of retail. Major player for clothing retail in the Denmark are Debenhams, H&M, Mauritz, Skoringen, Tojeksperten and Intersport. Among these H&M is the leader of the market with largest clothing share in Denmark in 2017. The competitive pricing offered by H&M helps consumers make perceptions for value-for-money. The opening of Japanese retailer of apparel “Uniqlo” has also announced their plans for opening in Denmark. Moreover, retail market has also observed the sales shift from physical stores into online markets. The penetration of smartphone in the online market already increased during the period of 2017-2022.
Majority of the products offered in Primark are under the private label. Many groceries retailers have started the apparel lines like Sainsbury’s and Tesco, so this line of area has become very competitive. It will be challenging for Primark to enter into the Denmark apparel market
In the political analysis the organizational ability for following and adopting different initiatives of the government that impacts the organizational performance. the governmental policies have diverted impact on local priorities for companies. The government plays a contributed role in forecasting success of Primark in Denmark. Denmark government looks all the fiscal and monetary policies in the degree that how this will affect the economy. The government also overlooks different acts like data protection, disability discrimination, consumer protection, sales protection and other related to them. The taxation policy also must be considered in Denmark as when launching Primark as this factor is also very important. Governmental regulations also vary from state to state.
In economic analysis, the economic trends and market changes appear to risk the growth of the organization. The rate of interest used in Denmark also impacts the boom or recession of the business. Moreover, fiscal and monetary policy also affects the economic analysis in Denmark. Primark is one of the strong business contributing a lot for the GDP so it will do the same in Denmark. Denmark must need to hold out the recession effects so that low rate of exchange is used for the export and import operations. The government of Denmark has raised the investment for developing the core infrastructure for the purpose of improving the business atmosphere.
In the social analysis, demographic changes impact the influence for the purchase of product in buying perceptions of market. Social changes are considered as a strongest force in the organization for conducting future research, processes development, or crafting another product for earning the market trust. Primark has to work on the preferences & taste of the population so that clothing retail will fulfill the demands. In the new market of Denmark, Primark has to consider other factors for enhancing their creation & lead on the market. Fashion bloggers are increasingly used for bringing any change in the fashion market. Moreover, education in Denmark is high and researchers suggests more R&D developments. Moreover, people of Denmark spends a lot more time & energy in order to satisfy their needs and wants. In the social segment, the role played by social media is also very important. As media leverage the fashion trend by developing the efficient market network. Denmark people also show concerns for the environmental safety, use of ethical practices and safety of the individuals. Primark has been alleged in the past for using the child labor in the production of their goods. In addition, disrespecting the workers’ rights and poor-working conditions are other two major issues. So these social factors are important for creating good position in the market.
it refers to the organization’s ability to use and adopt latest technological advancements that gives idea for improving the business performance. several technological innovations are present that help in improving the product quality and efficiency of the processes involved in the transactions. Using latest technologies help the business nature and also any kind or any social or economic uncertainties involved in the process are minimized. Moreover, technologies are very effective in minimizing the unethical behavior at work such as misconducts, shoplifting, fraud and etc (Lin et al., 1994). Inventions of various software and cameras, Primark will be able to maintain its sense of the security in Denmark stores. Primark in Denmark also needs to consider licensing and franchising issues. Innovations sometimes, impacts negatively like creating disruptions in supply chains of brands. Technological innovations are needed by Primark for the easy transform of customer experience. Moreover, Primark has the potential for replicating the clothes of different trendy designers.
this analysis is linked with the corporate social responsibility of the organization as companies needs to show some level of commitment for the environmental concerns. Ethics while doing business must also be considered. There is a direct correlation of the business actions with the environment. Denmark has some of the environmental policies which Primark has to obey them. Policies are made for protecting the environment and brand image. The government support is necessary for the investment of renewal technology.
in the legal analysis, the effort made by the organization must need to comply with the trading policies, taxation, wages, salaries, and insurance policies and etc. Denmark needs to find the connection between the political and legal aspect as many of the governmental laws are created with respect to it. Primark has to consider the issues that is quite famous in Denmark. It is related to the labor overuse & maximize the production by producing more products that is certainly not acceptable. Consumer protection is another area of concern that should be in the light. The rights of the buyers are very important as brands make products that are committed to deliver the best demand of the product. In legal terms, the importance is emphasized on the employee-employer relationship, customer-organization relationship & supplier-producer relationship. Also, entering into the different country, requires the legal obligation to take the copyrights, patents, intellectual rights and etc. The authorization of business license is one way for the fulfilling the legal requirements.
It is very competitive to enter into the new market for Primark as apparel industry is the most revenue generating industry in every country. Entering into the new market brings new capacity and the desire for gaining the market share. So, existing companies are very reluctant in welcoming the new brand into the market. The economies of scale of Primark will be useful for establishing stronger base in another country.
There are already many substitutes available in the retail market of Denmark. So, this will be challenge for Primark on how to handle this threat. Primark will reduce this threat by offering the high quality products at a very low costs. Many customers seek to purchase cheap products so Primark will be the only option in their minds.
Primark products are very different all around the world. Primark is also one of the famous and well-aware brand in the customers’ mind. Buyers are the immediate customer for the brand. The power of buyers allows the brand to sell the products at the very low cost and improvement of service. Moreover, purchasing products from Primark makes people happy and does not want to switch. Bargaining power of suppliers “Suppliers are those who supply the organization with what it needs to produce the product or service”. The names of the suppliers are not mentioned on the products but Primark supplies from the third world or developing countries like Vietnam, Bangladesh and India. Primark has full leverage on choosing the suppliers range from different countries and is not dependent on one single source. Primark has full leverage for choosing different suppliers if there is rise in the costs. It helps Primark to have control on the costs and further make improvements in the margins. Moreover, price change of the raw materials is also another issue that retail industry likely to face.
The rivalry of the Competitors is considered by every brand so does Primark needs to consider its competitors as well. the operation of Primark in Denmark is highly competitive and challenging. Many different brands like H&M and Next has already occupied a good position in the market. Moreover, there are no entry barriers as intense so Primark could easily enter the market. Primark has competitive advantage over its competitors. Primark has organized, systematic and simple business structure by which right authorities are assigned to the right position. They offer good “value of money” helps in the creation of trusty and reliable image of Primark in the minds of the customers. Primark generates the profit £341m and revenue £2730m that demonstrates the good financial position. So the same margin is expected from the Denmark market.
This report is all about the setup of Primark in Denmark and demonstrates different marketing concepts and strategies. There is no doubt that globalization and increase of technological innovations have increase the growth of the retail clothing industry around the world. this industry on average increases each year without any fall. The market share of this industry also increases and is one of the most-revenue generating industry of almost very country of the world. Primark offers employment and job opportunities
The use of business and market analysis is very significant for the success of the organization. it helps the company to analyze all the forces that could affect the external & internal environment. Primark needs to consider all the strengths & weaknesses before starting their store in Denmark. Threat and opportunities makes the company aware of the different businesses that are offered in the same category. By developing correct & effective marketing strategy, Primark will be able to gain competitive advantage over its competitors. Primark wats to do this, by offering greater value with low product prices. Thus, this will help to maximize the profits and market share for company. Primark keeps costs down through purchase of bulk materials from the suppliers and helps in achieving the “economies of scale”. Prices are also kept down from efficient-operational practices & lean production.
Ibisworld.com.au. (2019). Clothing Retailing – Denmark Industry Research Reports | IBISWorld. [online] Available at: https://www.ibisworld.com.au/industry-trends/nz-market-research-reports/retail-trade/clothing-retailing.html [Accessed 2 Apr. 2019].
Ken Research. (2019). Clothing & Footwear Retailing in Denmark, Clothing & Footwear Retailing Market Forecast, Clothing & Footwear Retailing Market Demand - Ken Research. [online] Available at: https://www.kenresearch.com/blog/2018/10/clothing-footwear-retailing-in-denmark-market-overview-ken-research/ [Accessed 2 Apr. 2019].
International, E. and International, E. (2019). Apparel and Footwear Specialist Retailers in Denmark | Market Research Report | Euromonitor. [online] Euromonitor.com. Available at: https://www.euromonitor.com/apparel-and-footwear-specialist-retailers-in-denmark/report [Accessed 2 Apr. 2019].
Lin, B., Hastings, D.A. and Martin, C., 1994. Shoplifting in retail clothing outlets: An exploratory research. International Journal of Retail & Distribution Management, 22(7), pp.24-29.
Pretious, M. and Love, M., 2006. Sourcing ethics and the global market: the case of the UK retail clothing sector. International Journal of Retail & Distribution Management, 34(12), pp.892-903.
Research-topics.blogspot.com. (2019). PESTLE analysis of Primark in UK. [online] Available at: http://research-topics.blogspot.com/2011/09/pestle-analysis of-primark-in-uk.html [Accessed 2 Apr. 2019].
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