Analysis And Appraisal Of Primark’s Performances

Analysis And Appraisal Of Primarks Performances Growth and survival are very often the majors’ objectives that guide businesses. Running a business is today and more than ever a risky venture because of the uncertainty of the environment and the strong competition that exist within markets. Organisations have to always come up with new strategies that will help them to achieve superior performances in order to stay in the competition or take competitive advantages. International organisations need therefore to strive more than the others to achieve high performances due to the globalisation effects. Last two years, achieving superior performances was not an easy task due to the economic crisis, leading businesses to be more concern about their survival rather than anything else. The retail sector in the UK was particularly affected by lower purchasing power of customers and many companies of the industry were fighting for their future. It was in this particular context of crisis that Primark one of the most recognise high street brand stand out, increasing their market share and achieving superior performance that made the headlines inside and outside the country. What were the strategies behind these outstanding performances? The present report will critically analyse and appraise Primark performances and the strategies used in order to achieve them. BACKGROUND Founded four decades ago in Ireland, Primark (also branded as Penneys in the Ireland Republic) is a clothing retailer operating in the European continent. The company which is a subsidiary of Associated British Foods plc (ABF) which also owns grocery brands such as Twinning and Silver spoon have an estimated total of 192 stores and operated in several European countries like the UK, Ireland, Spain, Germany, Netherlands, Portugal and Belgium. Since its creation, Primark come a long way to become as today one of the most favoured place to shop by women and men in the UK. The mission of the company quoted directly from ABF website can be extract ed from this statement â€Å"The mission of Primark is to supply quality clothing at prices perceived to offer real value†. Simply said, Primark mission is to make people look good at a lowest cost. This concept of value chain clothing has been one of the main drivers of Primark success over the decades. From its creation the company used a winning formula that is based on a competitive pricing model associated to a fast changing on the fashion pattern. The past decades saw an increase in number of high street brand that offer fashionable products adapted from the catwalk look at affordable prices and Primark was among those brands. A shift of the consumers behaviours toward value lead Primark to increase the number of its store over the decades in order to adapt with the shoppers pattern. A significant increase of this growth has also been an increase of the size of the stores with the average size rising from 16,000 sqft to 30,000 sqft. The opening of a 70,000 sqft store in a high profile place like Oxford Street boosted the Brand image as the UK leader of the value retailing. Also the significant amount invested by ABF in the opening of new stores and the extension of the existing ones helped Primark to achieve a massive transformation going from being a low price-brand with tertiary locations to become the leader of the value retailing in the UK. The recent downturn economic leading to consumers to be price conscious helped certainly the company to continue its growth and to report an increase of 20% in the 2009 profit. However the company was also the centre of a scandal in 2008 concerning the use of children as workers in its factories in Asia as well as the exploitation of overseas workers. Some critics even said Primark were able to achieve outstanding financial performance partially because of above factors that helped them to keep their production costs as low as possible.