In this statement, we aim to compare and contrast the strategic planning and moves of two retail giants- Primark from Ireland and Woolworths from UK. Since both deal in the same area and products, their operation, techniques and strategies give a solid and another ground for doing tactical management studies. This will help in not only applying the theoretical principles to some practical entity, but also in honing the skills to adopt a visionary prospect to execute future proper planning.
History- Primark Stores Ltd. is a clothing retail giant with its head office based in Dublin, Ireland (34 stores). Its functions lengthen to Netherlands (1 store), Spain (8 stores), Germany (2 stores), United Kingdom (125 stores) and Portugal. Primark deals under the name of Penneys in Ireland and the entire chain can be an ancillary of Associated Uk Foods.
Products- Primark performs majorly as a clothing shop with apparels and clothes for every era, size and group. Being truly a subsidiary, its merchandise id specifically built rather than sold at other retail counters. So, it has been able to make a brand of its own in apparels and clothing items. Its brands include women wear, ladies wear, sneakers, baby wear, menswear- both formal and casual, clothing accessories, makeup products, young and old boys wear, lingerie, cheap items, luggage, home items, nights wear and beach wear also. In a nutshell, you can find garments and clothes for almost any occasion or moment in time.
Departments- as a logical move, since Primark deals in such a huge variety of merchandise, it offers different departments set up, all under independent supervision which ultimately shows the clarity of its strategy and controlling function. The departments in Primark Stores Ltd. are health and beauty, hosiery, sneakers, home ware, gift wear, menswear, children wear, accessories, women wear and nightwear. In every, there's a separate department handling an individual group of apparels.
Evolution- formerly Primark was founded as a clothing store by Arthur Ryan and Micaela Mitchell in 1969. With piling success in clothes business, registering huge earnings and elated at elevated revenues levels, both the partners decided to expand and start new stores in local and local areas.
The success mantra of Primark is catering to the budget end of the market portion. Their strategy is to provide fashion clothing at realistic prices. Their clothing designs are simple, made on simple cloth but are brand name as of high quality and fashion mindful young individuals below the age of 35.
Recognition- Primark has been rated as the next largest clothing retailer by TNS in conditions of sales volume level and has also received the "COST EFFECTIVE High Street Fashion" by GMTV.
Primark's business structure embarks not only after clothing but other outfits and clothing accessories, which in a sense adds on to the variety of the shop. Its store procedures are simply just and efficiently been able by a dedicated team of professionals. Each store is handled by a manager to control and oversee the business operations. There are different levels of hierarchy within store management where big stores have professionals and small or medium ones have deputy or assistant director. There are distinct sales floor officials for caring for cashiers, customer's desks and support teams.
After getting involved into many unethical labor issues, Primark began emphasizing upon a simple and collaborative way of human resource management. They have defined ethical suggestions and code of conduct to be adopted within the organization and in the complete supply chain. Primark Stores became a member of Ethical Trading Initiative in 2006 and described its first trade strategy with a give attention to working conditions of employees, businesses at the factory and set up and handling necessary improvement. Primark's strategy is targeted upon distributed learning and cooperation to achieve sustained expansion with suppliers and factories.
Primark's operations and business methods are governed by guidelines and regulations. As such, heading by the governmental legislation, Primark has conformed to the insurance policies and set standards and moral and interpersonal responsibility demanded by global consciousness. Primark has always focused on the contribution of technology in business tactics and marketing programs.
Primark has conformed and responded positively to the stresses of the environment by gaining a strong hold within an organized and systematic way of business group (PEST Analysis n. d. ). All the processes and businesses of Primark are allocated to individuals and also have proper specialists at proper positions. This gives the entire value string a coherent way and move of functioning.
To attract increasing numbers of people, Primark has recognized the importance of high quality and high value products since customers want value return of their investment. Using its quality services, it's been able to garner an enormous share of the marketplace. However, Primark's image was shattered when it was attacked with issues related to labor exploitation and work force mistreatment. Many suppliers including were detached from its supply string when it was uncovered that the factory employees are paid significantly less than the minimum wages in UK.
Primark has strategized after delivering traditional quality clothes for any ages and communities, relatively at cheaper rates. However, an unobvious defect in its marketing strategy is the absence or we might say lack of advertising campaign. Being a subsidiary device, its functions are handled by the parent or guardian company therefore all the guidelines and types of procedures are charted at the plank meetings of the group. Its inability to advertise and market its products efficiently has led to low consciousness and communication between cross-border companies and customers.
Primark or Penneys in Ireland has been one of the largest stores (Penneys n. d. ). At some point of your time, every group is confronted with a challenging question concerning whether to look for expansion and when yes, then how to proceed with it. Ireland's total market was too less to provide lucrative expansion technique for Primark. Its progress in Ireland had been organic and natural since it could open up just a few dozen stores in its domestic market. UK presented various opportunities arriving along its way when it attained the One Up chain and its own market show in UK rose to 40% instantly. The offer of acquiring 16 One Up stores at a cost of 20 million exposed method for unprecedented progress of Primark in overseas markets.
In UK, Primark has implemented horizontal market growth strategy where it has been focusing upon acquiring retails stores that handled in the same line of business. It captures the discount clothing market sector and has responded to the highly competitive market of UK by selective targeting of store locations. That is pretty much clear from the info that Primark acquired just 1 store in 1969 when it was proven but a total of 86 stores in 1998.
Primark knew that in order to sustain growth, cross border enlargement is essential of course, if nascent stores are exposed, social as well as financial things could appear since huge investment and skills is required in new destinations. As the quickest way to broaden globally, Primark opted for acquiring One Up stores which were already more developed, got good locations and reputed track records in the country. Primark, after acquisition, transformed the format of One up stores so that they look like a fundamental element of the Primark Group.
Operational- after the acquisition of One Up stores, first and the foremost important process was the honoring of One Up's preceding commitments and in front merchandise purchases which Primark implemented. Secondly, it continued to improve the image and format of the 16 purchased stores where, it determined 6 to be the more tactical locations that could give the speediest return to Primark on its investment. The entire changeover programme was rolled over a store by store basis with each store taking around twelve weeks to be completed. In every, the target for those 16 was place to be of 4 years.
Primark, already sued for labor issues, continued to be cautious and so inherited many business techniques of One Up staff but also provided extra training to them in the form of training seminars. Every store staff was imparted localized training and useful ideas on cash and stock control, administration, store management and change in technology were sent.
Technology- Primark was presented with lots of barriers to get over when it ventured in UK. The major one was the change of 1 Up's sales and stock information into a format which is important and understandable by them. It had taken a head start and completed the procedure in 4 calendar months. The brand new systems were launched in every 16 stores during non-peak trading durations since the personnel should be provided with ample training to work on those new systems.
Merchandise- rather than buying merchandise individually for individual stores, Primark operated on the centralized goods buying system which facilitated correct and swift predictions of sales and level forecasts effectively.
Target audience- to promote One Up stores under the brand name of Primark, it marketed the stores based on type of person and young and family organizations. The transformation and the marketing plan were recognized by local press and various marketing like radio, outdoor advertising and mailing activity. The communication strategy with the new target audience in UK was carried on with an objective of targeting as much potential customers as is possible and giving an answer to the worthiness needs of the customers.
Primark was quick in analyzing that acquiring a recognised retail string in UK will be beneficial for it to join up presence where it is under-represented. The acquisition and change costs were exceeded by the worthiness achieved out of this expansion strategy and absorbing a retail business working in the same market market. Possessed it been the other way, there would be more costs and time involved in capturing an similar market talk about of UK.
With central operating and management costs being the same and consistent, the sales of Primark was outgrown, thus registering greater gains. Unlike Irish market where in fact the population and therefore the number of prospective customers is low, UK presents enormous expansion opportunities in front of Primark because of 120 big locations in UK. Using its successful extension and acquisition strategy, Primark has emerged as a dominant player in the united kingdom retail market and is unable to counteract the competitive activities of big competitors, owing to its large size and procedures. In the same way, Primark has had the opportunity to achieve increased economies of range because of increased market talk about, frequent costs but increased revenue, eventually leading to lowering down the machine costs for its products.
Woolworths carries a very topsy turvy history of its own. It was established in UK in 1909 as a retail store with children clothing as the major appeal. There were toys and stationary items also. It travelled with a high pace of development and there have been new Woolworths' stores beginning every alternative week. By 2008, Woolworth's stores come to a count up of 807.
It was working under five and dime strategy where no item was more than six pence. Another feature of Woolworths' technique to get customers was pick 'n' blend sweets and refreshment rooms offering free pots of tea to persuade the customers with their new format. It provided the clients the facility of going for a round of the store somewhat than just walking in, making a purchase and go out (A history of Woolies: 99 many years of pic 'n' combination n. d. ).
The company was facing stiff competition from other UK retail giants and the purchase price inflation brought by the Second World War made a primary strike to the prices strategy of Woolworths. One of its structures was also damaged and a huge damage was incurred whenever a V-2 rocket fell upon it, resulting in many fatalities and injuries. Using the birth of young adults, fab four products and music enthusiasts, Woolworths started extending vertically into entertainment and other product categories to meet up with the changing needs of the clients.
Woolworths was bought out by Kingfisher Group's forerunner- Paternoster Stores in 1982. Then and there onwards, just how of controlling changed and another course was followed since the authority and the management was now in new hands. In 2001, Woolworths underwent a demerger with Kingfisher but after an abrupt boost up in its show prices, it is being declining continuously. In every, out of most such hiccups, the financial as well as the communal reputation and standing of the retail string was shattered. Some major labor issues also cropped up since it resulted into huge unemployment and loss of jobs.
After the shutters came up down on Woolworths stores, the Shop Direct Group, along with Deloitte as the administrator (Woolworths collection for administration n. d. ), managed the Woolworths brand and finally all the literally located stores of Woolworths were shut to provide it an online business, making it a web retail shop (Woolworths to reopen online as Shop Direct buys name n. d. ).
The Shop Direct Group strategizes to provide one thing new and unique in its retail store, apart from general items and home ware. It is planning to concentrate on children's clothing, gadgets and presents and the ever before popular pic 'n' blend sweets and confectionary.
The greatest drawback or we may say the shortcoming with Woolworths was with their strategy to communicate with the target audience. Whenever a company runs as a retail string and with various varieties of goods, it has to flow with the tides of energy and make continuous endeavor to match the latest trends in shopping patterns and what the clients are challenging.
Woolworths failed in anticipating the upsurge in demand in offering graph music; instead it sold cover variations with unknown music artists. Its management was directionless and possessed no USP (Unique Selling Proposition) of its own. It was advertising anything under the rooftop but experienced no specialty that could place it in addition to the masses. When people demanded shopping from your home on internet, then too it failed to gauze the marketing development and lost the way.
It claims to acquire world domination in the pic 'n' combination confectionary but it can't be seen as a very profitable business proposition. Whatever goods or product it sold, it acquired some competitor in that category that excelled the marketplace therefore Woolworths needed to be content with the overlooked margins. After its demerger with Kingfisher in 2001, it was packed with huge debt and the worsening situation was that the stores are not owned or operated by Woolworths, somewhat they may be leased so the interest rates accumulated to pinch the management.
After conducting an intensive examination of Primark and Woolworths tactical planning and implementation history, it is clear without any uncertainties that Primark certainly got an upper advantage in the manner it gone of with strategic planning and a succeeding and successful execution of its chalked out strategies.
Both Primark and Woolworths were set up as a subsidiary product of some mother or father company but the former had established targets as the latter was without any set course (Thoughts and opinions: Don't cry for Woolworths. Its time was up n. d. ). Primark was proactive in examining the changing needs of the customers and expansion need for organizational growth therefore, quickly required a head start to go for the acquisition of 1 Up chain. Once again, its genius was exhibited when it made a decision to acquire a 16 store string already more developed in UK, alternatively opening up new stores since it knew that the thought of new stores wouldn't normally endure much fruits.
On the other hands, Woolworths remained caught to its old and traditional ideas and in ways, it was moving into an illusion that its pic 'n' blend strategy could keep on working miracles for this indefinitely. It did not try to look out for other options to sustain growth and present a competition to its competitors. In human source arena also, Primark excelled as it experienced defined positions, tasks and duties while Woolworths lagged behind in this essential forward also which is in a way the driving force of all success factors.
Technology, which is recognized as the boost up tonic, was acknowledged by Primark and it went for a few software and complex systems but there is absolutely no signal of any specialized advancement regarding Woolworths. Primark was acquiring well established chains to extend globally while a precise opposite was going on with Woolworths that was being bought by others and its own stores were being cut short yr by calendar year (Woolworths in talks to sell Retail Empire to save account for 1 n. d. ).
Primark has already started out compensating for the increased loss of Woolworths by swapping Woolworths Foregate Street store in Chester (Primark to displace Woolworths in Chester city centre n. d. ). First, Primark had gone for the authorization to purchase the bottom floor of the Woolworths store. As of this case also, we can see the marvel of Primark genius since this store is at close vicinity of youngsters who are fond of fashion clothes and garments. Thus it could be termed as a move to improve its position as a fashion brand providing 'fads' at affordable rates.
This has dished up dual benefits for the Primark as a brand name. The first advantage is obvious in the form of increased sales and income. Another benefit comes from the fact that this step will encourage occupation and having back the old employees of Woolworths. Thus the destruction done to the image of Primark that it generally does not consider labor issues can be mended by checking job opportunities.