In this report, the writer selected the clothing retailing industry of Primark in the UK market to analyse the business environment, strategic capabilities and evaluation some possible future strategies for Primark. The background of Primark will illustrate in the first part following by environment analysis, strategic capabilities and recommended strategies respectively. 1.1) Company Background Primark was established in 1969 and is originally an Irish brand that aim to offers good quality merchandise at a nominal price. After 1969, Primark expanded to several other countries. Currently, Primark has 278 stores across the UK, Ireland, Belgium, Germany Netherlands, Portugal, and Spain with more than 54,000 employees (www.abf.co.uk). Product …show more content…
According to figure 2, the revenue of Primark grew by 16 per cent, because a store expansion program that added a thousand square meters of selling space over the last year. The revenue turned out higher than expected, because of the weakened Euro exchange rate. The retail department has total revenue approximately £4,950 million, whereas in 2013 it was £4,273 million (ABF annual report, 2015). Palmer and Hartley (2012) defined the business environment as everything surrounds and impacts to the industry. This environment can classify into the macro-environment and microenvironment. The macro-environment consists of broad environmental factors that have an impact on the industry which less controllable factors. On the other hand, controllable factors tend to be included in the microenvironment. (See figure …show more content…
According to PESTEL analysis (Appendix A), one key political decision which affects the clothing retailing industry in the UK is the rate of tax levied by the government. This has an effect in the industry in the form of corporation tax and also the ability of customers to spend with clothes, linked to increasing VAT. At present, levels of corporation tax in the UK have been lowered in order to stimulate economic activity. In contrast, because of the high VAT, it affects to the firm to offer low price for the consumers. Moreover, there are some political and legal factor that link to the environment and social factor. The laws on the level of safety chemicals in textiles that make the consumer tend to increase their aware of the impact on health and their environment by finding the Eco-friendly tag on the clothes when they purchase. Additionally, the Greenpeace organisation also randomly checked regularly in order to find clothes that have toxic exceeding standards. All of these issues are pressured many industries to change their ways when it comes to the materials they use and how they