M RahmanSWOT analysis of Primark (Primark SWOT)
This is a detailed SWOT analysis of Primark. It aims to analyse the strengths and the weaknesses of Primark. It also aims to explore the opportunities and the threats facing the company. Primark is an Irish fast fashion retailer headquartered in Dublin, Ireland. Associated British Foods (ABF) is its parent company.
Primark was founded in Dublin under the name ‘Penneys’ by Arthur Ryan on behalf of the Weston family. Its business model relies on high-volume sales, low-markup pricing, and efficient inventory management. It has successfully positioned itself as a leader in the fast-fashion industry, with several factors contributing to its success. However, like any business, it also faces its share of challenges and risks.
Strengths identified in the SWOT analysis of Primark (Primark SWOT)
Rapid growth
Primark has grown quite rapidly over the years and success in the home market of Ireland has led the company to expand to the UK and many other countries. It has over 400 stores and operates in 14 countries across Europe and America (Primark, 2023). It is also the fastest growing retailer in the United States.
Fame in the UK and the EU
Primark is one of the biggest selling clothing retailers in the UK. A n umber of customer surveys finds it as the most famous brand in the country in terms of affordability, cheerfulness, and good value for money. Many people buy its products because of bargain prices. Its performance in some of the EU countries is fantastic as well.
Range of products
Primark offers a wide range of products and all of its products come under five broad categories i.e. women, men, kids, home, and beauty. Most of the products fall in fast fashion which entices consumers to purchase an array of items. In fact, many consumers buy the same products when the first ones show wear and tear.
Pricing strategy
Primark offers trendy clothes at amazingly low prices. In the United States, its prices are between 30 and 40 percent cheaper than those of its competitors. It pursues a cost leadership strategy to offer consumers low and affordable prices.
Low manufacturing costs
Primark has little to no advertising costs, and most of its products are made in countries such as Bangladesh, Pakistan, India, and China. These countries offer tremendously low labour costs that eventually enable Primark to sell its products at low prices.
Likewise, selling a lot of the same items requires Primark to place large orders with factories and suppliers which also enables it to benefit from economies of scale to keep the prices low.
Weaknesses identified in the SWOT analysis of Primark (Primark SWOT)
Lack of e-commerce platform
Primark does not sell its products online. It tested out e-commerce in the past via ASOS website; however, was not successful. Many people argue in its defence that it offers rock-bottom prices resulting in small profit margins. Therefore, online trading may not be suitable for it due to high shipping and return costs of products.
Having said that, it is not a good idea not to sell online particularly during economic lockdowns and political instabilities. Many companies are going through difficulties due to little or no online presence.
Controversies
Primark has found itself mired in a number of controversies over the years. For instance, it is one of the 260 employers that were identified by the UK government for paying staff less than the legal minimum wage. It is also one of the fashion brands named as treating suppliers unfairly (University of Aberdeen, 2023).
Poor quality products
While Primark offers trendy clothes at amazingly low prices, many customers complain that its products are of poor quality and made for the masses with no unique style (Trustpilot, 2023). With the focus now on climate change, many also decry the lack of eco friendly practices and products on offer by the fashion giant.
Opportunities identified in the SWOT analysis of Primark (Primark SWOT)
Market penetration opportunities
Primark undoubtedly has an opportunity to grow further in the UK and Ireland. The UK offers fantastic prospects for expansion, and it is evident that Primark focuses on further growth in the country. In fact, the biggest Primark store in the world is in Birmingham, England.
Primark’s current performance in countries such as France, Belgium, and Italy is very strong and demand for its products is on the rise as well. It sees growth opportunities in all its markets, expecting to reach from 400 to 530 stores by the end of 2026 (Primark, 2023)
Exploring emerging markets
As mentioned above, Primark operates in 14 countries across Europe and the United States. Therefore, operating in other countries particularly in both Eastern and Western Europe is worth exploring. Likewise, exploring emerging countries is also a good idea.
Sustainable and ethical Initiatives
Primark could address the ethical concerns surrounding its business practices by implementing more sustainable and ethical initiatives. By adopting more environmentally friendly production methods, promoting fair labour practices, and offering more sustainable products, it can improve its brand image and appeal to the growing number of consumers who prioritise ethical consumption.
Threats identified in the SWOT analysis of Primark (Primark SWOT)
Intense competition
Primark faces threats from several fierce competitors. Its main competitors in the UK are Marks & Spencer, Next, Arcadia Group, ASDA, TK Maxx, Tesco, JD Sports, Debenhams, and Sports Direct. Its main competitors in the United States are Walmart, Gap’s Old Navy, Forever 21, Kohl’s, J.C. Penny, and Macy’s.
Changing consumer preferences
Another threat facing Primark is the rapidly changing consumer preferences in the fashion industry. As consumers become more conscious of the environmental impact of fast fashion, there is a growing demand for sustainable and ethically produced clothing. This shift in consumer preferences can adversely affect Primark’s sales if it fails to adapt its offerings to cater to these changing demands.
Summary of SWOT analysis of Primark (Primark SWOT)
To conclude, it can be argued that Primark has built a strong brand reputation and impressive global footprint, which have contributed to its success. However, it faces challenges in the form of ethical concerns, lack of e-commerce presence, and changing consumer preferences. By addressing these challenges and capitalising on the opportunities presented, it can continue to thrive in the competitive retail market.
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Last update: 18 April 2023
References:
Primark (2023) About us, available at: https://www.primark.com/en-us/aboutus (accessed 18 April 2023)
Trustpilot (2023) Primark, available at: https://uk.trustpilot.com/review/www.primark.co.uk (accessed 18 April 2023)
University of Aberdeen (2023) Major high street fashion brands reportedly paying below the cost of production, available at: https://www.abdn.ac.uk/news/16616/ (accessed 17 April 2023)
Photo credit: Primark
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
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