Primark had approximately 350 stores all over Europe as well as America. Primark is generally recognized as the target store for staying up with the latest trends regarding fashion devoid of breaching the bank. Primark’s key motto is to offer a distinct variety of products to their customers regardless of their age as well as taste. Primark has been the fastest-growing organization in the fashion industry in the last ten years. Primark is mainly a fast fashion industry, which operates in an extremely aggressive international market. The main concept behind the term ‘fast fashion industry’ is that fashion operators, delivers cheap designs with the capability of moving quickly from the design phase to availability in stores. Their key tactics regarding business is to constantly rise as well as amplify their profit by expanding their retail shops in new markets all over the world. Recently, Primark is thinking about to enter the market of Poland. In this report, the learner wants to investigate strategies of Primark for their business expansion in Poland. For this purpose PESTLE analysis is commenced by the learner. It is found that, Primark’s main strategy is to build their first store in the capital of Poland and increase their stores as per customer’s requirement in the near future. This tactic is very helpful for effective business expansion in international market dynamics.

 

Introduction

Primark is a multinational retailer of fast fashion industry, whose headquarter is situated in the Chapel house, Dublin, Republic of Ireland. It is a  subsidiary of Associated British Foods, which is food processing as well as retailer organization located at London. In Republic of Ireland, Primark is known to all as Penneys. But they do not use this name internationally. Primark is retained somewhere else of the world by American retailer named J.C. Penney. They had approximately 350 stores all over Europe as well as America. Primark is generally recognized as the target stores for staying up with the latest trends regarding fashion devoid of breaching the bank. Primark’s key motto is to offer a distinct variety of products to their customers regardless of their age as well as taste. In the words of GlobalData, Primark is the fastest growing organization in the fashion industry in the last ten years. Their key tactics regarding business is to constantly rise as well as amplify their profit by expanding their retail shops in new markets all over the world. Recently, Primark is thinking about to enter the market of Poland. In this report, the learner wants to investigate strategies of Primark for their business expansion in Poland. For this purpose PESTLE analysis will be commenced by the learner.

Primark inside international market framework

Globalization in context to modern market is a extremely troublesome force obsessed in the key by global economics becoming more cohesive with a shift towards a single market as well as global economic structure. To cope up with dynamic market trends, modern business managers must introduce proper strategies for opposing adverse effects as well as to  yield recompences from the chances formed by these distributive forces. The main factors responsible to enter and to compete successfully in international market are the following:

• Proper strategy must be chosen before entering the market (Arriaga et al., 2017)
• Understanding cultural aspects of the targeted area
• Recognize its edge of competency

Primark is mainly a fast fashion industry, which operates in extremely aggressive international market. The main concept behind the term ‘fast fashion industry’ is that fashion operators, who delivers cheap designs with the capability of moving quickly from design phase to availability in stores. This is a very productive idea, which constantly challenges old methods of retail business (Duff.,2017.). These fast fashion retailers are constantly upgrading themselves to get ahead in this extremely competitive market. Forever21, Spanish company Zara, GAP and H&M are the main competitors of  Primark in context to global expansion.

 

International market situation, which need to be well-thought-out by Primark

Advancement in technology and ecommerce: Advancement and online shopping has arisen as the solitary major factor of globalization in modern times. Traditional retail businesses are continuously threatened by ecommerce websites. Customers can shop from these websites 24*7 just using any smart devices. They do not have to leave their home or office for shopping purpose. On thee other hand, conventional stores, which are made of mortar and bricks, offer shopping facility in between 9 am to 5 pm only. Entry of ecommerce giants like Amazon, eBay and Alibaba creates a troublesome effect in traditional retail businesses. It is extremely challenging to the traditional retail industry to align their products perfectly with customer’s requirements (Adeola et al., 2018.). Therefore, the foremost challenge for Primark is to produce prodigious constructive involvements in both of their offline as well as online market existence. To overcome this, Primark engrosss with their consumers using omni channel strategy of marketing which delivers unified customer satisfaction. Primark must carry a successful customer rendezvous policy with a combination of experiences of their customers both offline and online. To achieve this, they must incorporate social media advertising with their traditional method of advertisement (Joustra., 2016). Physical stores of Primark must consist of interactive displays, audio visual and wi-fi interaction facilities. In store consumer service should also be present in their stores.

 Supply chain and logistics: As the behavior of the customer is constantly changing as well as market demand is dynamic, Primark continually analyses their procedures vis-à-vis logistics to guarantee that optimal procedures are been taken. Primark influences its providers as well as logistic associations using slender business and logistic models. The regular lead period from the plan of a garment to stores is about six weeks. Primark has complete control of its logistics procedures as well as opened several logistics hubs, which are spread all over Europe. DHL was assigned the responsibility of managing these hubs. As Primark arranges its business policy of inaugural new shops across Poland, this places extra demand on its current logistics processes. Therefore it has to enhance its costs regarding logistics procedures to increase successful processes of its main logistics hub situated in Germany (al Habibi., 2019).

PESTLE Analysis:

Political factors:

In the partisan scenery, Poland has developed a steady democratic system and has made noteworthy development in context of protecting human rights as well as minorities. Poland espoused a new constitution and set up a diverse constitutional-parliamentary structure of government like France. This carried political solidity to the country, which amplified their GDP expressively over the last era. Underneath a graph will be found, which  portrays the political solidity in the country between 1996 and 2016.

The present political party controlling the country, Law and Justice (Pis) is a new political party, which was set up in 2001. After 2015 elections Pis party had gained supremacy in the both house of polish parliament, which further gave them to make rules and regulations as per their wish.

In current times, Pis party has acknowledged condemnation for undermining democracy by  weakening the judicial system and by trying to keep media quiet. Principles and strategies of this kind subsidized to a reduction in political solidity as well as vagueness for foreign organizations to expand business in Poland.

Economic factors:

During the previous 27 years period, the economy of Poland has been full-fledged so much that no European country can catch up . This growth in terms of economic parameters, reduces the gap among Poland and other rich European countries. Integration of Poland in the European Union boost its growth by providing infrastructural development as well as creating opportunities of employment. Poland is one of those countries of the world, who can avoid 2008-2009 financial crisis. Its Gross Domestic Product is constantly increasing year after year creating several opportunities for organizations to enter their market. The government of Poland takes various steps to implement liberalization of the economy by privatizing government-owned organizations as well as promoting Foreign Direct Investment from several foreign countries. This also makes suitable conditions for multinational organizations to invest in Poland (Ortega et al., 2017).

Poland’s retail market:

In current years,  great development in retail segment is witnessed by Poland, the creation of the largest retail stores occurred in the country. There are 408 retail stores in Poland, which occupies nearly 9.8 million meter square area. The metropolises of Wroclaw and Poznan are extremely flooded with retail stores among the main Polish accumulations, with retail stores concentrations of 730 meter square and 728 meter square per 1,000 residents, correspondingly (Eisenberg., 2019). Warsaw citizens have the greatest purchases capacity € 10,927 per capita per year (Thompson and McLarney., 2017).

Fig: Retail market of Poland

Social factors:

Poland possess a rich history, which may be outlined for several of years, its culture is exclusive and sundry. Due of its location, in  centralized Europe, it has always been initiated in struggling situations, which have noticeable in the Polish culture. But the stability in Polish culture makes the situation easier for Primark to expand their business in Poland.

Customer profile:

Some inconsistencies are pragmatic for incomes based on the region as well as segment of employment in Poland. These inconsistencies are the largest among contemporary European Union countries.

Behavior of a customer alters unswervingly on the salary level, which is inferior in country areas.

During the last era, the middle class augmented in numbers with generated income levels nearer average salary of Europeans. This subsidized to spending of customers as well as it likely to remain increasing in the subsequent years.

 

Strategy for entering the Polish market:

It is recognized that there are many Polish consumers present in Primark’s shops spread throughout Europe as well as the brand is known in Poland. Though, this is insufficient, therefore an analysis has to be achieved to comprehend about trends and statements of fashion are lucrative to the normal public of Poland. For this reason, the formation of a devoted team to cover these features is essential.

As Poland is a participant of  EU, Primark will not face major complications for entering the market in context of market rules (Gómez., 2019). So, the same entrance tactics, which have previously been used in other European Union  markets, can also be used by Primark in Poland as well.

Primarily, it is appropriate to detect the first shop in the capital of Poland, as it is the maximum inhabited metropolitan of the country. Warsaw has more than 4 million residents, as well as  may be used as trend to homework for entering the Polish market. Relying  on these data obtained, it will be probable to choose, whether to set up new shops in other less inhabited towns  or to retain minimum number of shops scattered through the capital. This tactic was previously functional  in Italy in the year of 2016, where the preliminary shop was set up in Milano, increasing in the market of other  major cities neighboring, until lastly before establishing a noteworthy existence throughout the country (Varley et al., 2018). Though a huge money venture is desirable, Primark might be mounted in retail stores, which do not possess huge prosperities of having enough customers. It is a recognized thing, that presence of Primark in shopping malls draw consumers attention as well as reimbursements all stores present in the aforesaid mall. By this way, Primark might possess very extraordinary charge negotiating power as a result, as well as its price might be further decreased.

Furthermore, Primark might also offer unrestricted Wi-Fi and a soothing area in their shops, where consumers may sit and take a break between their shopping interval. This demonstrated to be an active approach to retain customers in the shops as well as  fascinate additional persons to the stores.

For their logistics systems, the delivery centers should be mounted in the Special Economic Zones or SEZs demarcated in Poland where deductions in taxes are obtainable.

Primark  may occupy with their consumers by means of omni channel strategy of marketing which delivers unified customer satisfaction. Primark may carry a successful customer engagement policy with amalgamation of involvements of their customers both offline and online. To achieve this, they must integrate social media advertising with their traditional method of advertisement. Physical stores of Primark must consist of interactive displays, audio visual and wi-fi interaction facilities. In store consumer service should also be present in their stores.

Also, Primark may acquire a local fashion retailer of Poland as well as rebrand it as Primark. This is a very successful business strategy, followed by many similar organizations while expanding in the international market. As per the current market dynamics, Primark may acquire LPP SA of Poland for business expansion. For this reason, tactical mergers and acquisitions can be done. This type of merger is primarily used by organizations when it want to capture a merchandise line, go through a new business market, or grab a new line of products. As Primark wants all of these aforesaid business strategies, therefore it must use a strategic merger and acquisition process. If this method is applied, then it will produce value for LPP SA as well as Primark. To grudgingly use a cliched phrase, it will be a win-win condition for both parties. LPP SA presented all the required criteria as well as agreements with a must-have customer. This merger and acquisition method can be beneficial in the following  situations:

• If the commercial market fluctuates due to the change of rules and regulations of the targeted country, then this method will be very useful as it can fill up crucial gaps in service contributions.
• In terms of talent acquisition and gaining intellectual property, the merger and acquisition method is very effective. Many skilled employees of LPP SA can be used to expand Primark’s business in Poland. It can be stated that, in the modern world intellectual property can be treated as equivalent to currency. All the patents as well as technical innovations of LPP SA may be achieved by Primark by this method.
• Cost as well as revenue interactions can be achieved by using the merger and acquisition method. As it is a sort of tactical merger policy, consequently, may cause synergies, which present tangible significance for both LPP SA and Primark.
• Merger and acquisition methods can save time of business expansion. Suppose Primark want to deliver a new service in Poland. They can use LPP SA’s existing resources to deliver aforesaid service to their customers. Without merger and acquisition strategy, Primark has to develop their infrastructure to deliver the same service. It will ultimately save cost as well as money.

 

Conclusion

It can be concluded that Primark is the fastest-expanding company in the fashion industry in the last ten years. Their key strategy concerning business is to continuously increase as well as increase their revenue by increasing their retail stores in new markets throughout the world. A Short Time Ago, Primark is thinking about to enter the market of Poland. For this purpose they studied various analyses to understand the market of Poland. PESTLE analysis is done for that reason. Their main strategy is to build their first store in the capital of Poland and increase their stores as per customer’s requirement shortly. This tactic is very helpful for effective business expansion in international market dynamics.

References:

 

Adeola, O., Boso, N. and Adeniji, J., 2018. Bridging Institutional Distance: An Emerging Market Entry Strategy for Multinational Enterprises. In Emerging Issues in Global Marketing (pp. 205-230). Springer, Cham.

al Habibi, B., 2019. HR practices of Marks & Spencer, Selfridges, Primark, and Sainsbury’s (Doctoral dissertation, University of Science & Technology).

Arriaga, J.L.D.O., Domingo, D.A. and Silvente, V.B., 2017. Facebook in the low-cost fashion sector: the case of Primark. Journal of Fashion Marketing and Management: An International Journal.

Duff, K., 2017. An investigation into how the Primark brand use social media to influence the buying behaviour of Irish female customers (Doctoral dissertation, Dublin, National College of Ireland).

Eisenberg, P., 2019. Financial Analysis of Primark Stores Ltd. with regard to a Stock Exchange Floatation (IPO). International Journal of Management, 7(1), pp.91-112.

Gómez Bernat, R., 2019. Strategic and financial analysis of Primark and his competitors in the textile sector.

Joustra, L., 2016. The effect of congruence between store design and scent on consumer responses towards fashion stores (Master’s thesis, University of Twente).

Ortega, A.M.G. and Okechukwu, C.U.U., 2017. Strategic means to launch business-Primark in Denmark.

Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by next Plc have on themselves and their competition in the UK Clothing Retail Market?. Journal of Commerce and Management Thought, 8(2), pp.234-264.

Varley, R., Roncha, A., Radclyffe-Thomas, N. and Gee, L., 2018. Fashion management: A strategic approach. Macmillan International Higher Education.