PowerPoint presentation

Primark’s Background

Primark retails a diverse range of products for Women- Men- Children - Home- Beauty-

Accessories - Confectionary

Primark’s Parent company is

PRIMARK IRISH CLOTHING RETAILER

Founded in 1969 The stores in Ireland are branded ‘Penneys’

(Primark, 2016)

308 Stores in Europe

Stores in America

Brands

Financial performance 2014- 2015

UK largest market In 2015 sales were 13% higher than 2014 Like-for-like sale 1% ahead of 2014l (reflects strong international performance) UK delivered a positive like-for-like performance France been the most successful new market US Dollar’s strength against the Euro has caused an adverse effect on margins (ABF, 2015).

650 660 670 680

2014

2015

PROFIT £m

4,600 4,800 5,000 5,200 5,400

2014

2015

REVENUE £m

Future store expansion

2016

Plan to open 6 stores in US and the first in Milan

(Mintel, 2016)

Adapted from Primark, 2016 (ABF, 2015)

Primark’s suppliers are located in Bangladesh, China, India, Turkey and other locations around the world. Primark is ‘ an international brand with a global supply chain” (ABF., 2015).

Primark’s Existing Markets US, UK, Ireland, Austria, France, Germany Netherland, Portugal, Spain, Denmark, Belgium (ABF, 2015).

(Adapted from Primark.com,2016)

Justification for Primark’s further International Expansion

Primark’s brand is perceived as highly differentiated, with strong image for good value for money, offering fun and vibrant products (Mintel, 2015a).

Primark is one of the leading footwear retailers in the UK (Mintel, 2015b)

5.3 % Footwear

Market share UK

Financially strong (ABF, 2015)

Active presence in social media (Primark, 2015)

One of the largest clothing retailers in Europe with sustainable growth (ABF, 2015)

After the problem in Bangladesh with a factory, Primark keeps improving ethical working standards by their Code of Practice ensuring ethical working conditions for their employees and suppliers (ABF., 2015)

(Mintel, 2015 €)

(Adapted from Johnson et al ,2015, p.131)

W E A K N E S S E S

Primark’s brand reputation affected by scandal due to factory collapsing in Bangladesh (Dobrin, 2013)

3.5 level

-19

level (Adapted from Brand index, yougov.co.uk, 2013)

Primark ‘s e-commerce is not developed yet

Primark totally dependent on outsourcing, manufacturing is risky due to the power of suppliers (Johnson et al ,2015).

BRANDINDEX 2013

S T R E N G H T S

Leading retailer in the UK youth fashion gaining excellent international reputation (Mintel, 2014a)

Primark has the experience, strengths and infrastructure to grow and expand internationally .

Primark posses strong marketing skills, an affordable and appealing product range and the capacity in areas of production to satisfy their markets’ demands (Muhlbacher, Leihs and Dahringer, 2006).

Financially strong to invest and increase international market share

Primark’s has a sustainable business model with high profitability to adjust to any new market.

Primark’s management have perceived new market opportunities, with a strong vision to grow and to expand internationally that creates real value for the shareholders and increases international market share (ABF, 2015)

Ansoff matrix illustrates that for Primark, market development with their existing products is the ideal strategy for market growth and expansion

Macro criteria Social/ Cultural – population, urban population and population growth, population cultural proximity

It is important for Primark to understand these factors to be able to attain success in the new markets. Those factors affect consumers’ buying behavior. Population and demographics changes could heavily affect Primark’s performance offering either threats or opportunities. The structure of the population could affect competition , and demand and supply of products. Primark uses the media as a significant marketing tool.

Economic indicators GDP, GDP growth rate, PPP pc

The economic development of the countries considered for international expansion need to be carefully and critically analysed.

Political- corruption perception index (political risk)

The political factors are critical for Primark to decide in which country to develop markets or where to invest. The political situation could be volatile and, thus, create significant risks for Primark (Dole and Lowe, 2012).

Micro criteria

Customers/ Consumer behaviour- Customers are one of the most important external stakeholders. Primark’s customers will help the business to develop and grow. It is important for Primark to get to know the wants and needs of their customers. The retention and loyalty of customers ensure profitability and sustainability (Carrol and Buchholtz, 2015).

Competitors- It is important to identify the competitors and their actual and future strategies to be able to gain competitive advantage

Relevance to Primark

GDP per capita – is the gross domestic product that is divided by midyear population

Investment environment – Economic freedom index rank It is of great advantage to Primark that the countries that are selected for international trade are open to trade and investment. The Economic Freedom Index is a good indicator

Brand loyalty- It is important for Primark to know the culture of purchasing and brand commitment of the possible market countries

First Screening

Countries to be screened

From 198 countries to 20

The criteria for the selection of the initial 20 countries is geographic proximity to the existing markets countries, and GDP

PPP against GDP pc.

Possible Markets

GDP (PPPP) $

Mexico $2.22 trillion Canada $1.628 trillion Poland $1.003 trillion Sweden $467.4 billion Romania $411.1 billion Norway $352.8 billion Czech Republic

$331.4 billion

Greece $281.6 billion Hungary $257 billion Finland $224.7 billion Slovaquia $159.6 billion Bulgaria $132.6 billion Croatia $90.33 billion Lithuania $82.14 billion Slovenia $63.6 billion Luxemburg $56.58 billion Latvia $49.89 billion Estonia $37.88 billion Cyprus $27.1 billion

Malta $14.75 billion

(CIA,2015)

GDP per capita $18,500 $45,900 $26,400 $48,000 $20,600 $68,400 $31,500 $25,600 $26,000 $41,200 $29,500 $18,400 $21,300 $28,000 $30,900 $102,900 $24,500 $28,700 $31,000 $34,700

Screened 20 countries from Europe and North America selected by geographic and cultural proximity , with the highest GDP (PPP), AGAINST their GDP PPP pc.

(CIA,2015)

Possible markets GDP (per capita)

1 Luxemburg $102,900

2 Norway $68,400

3 Sweden $48,000

4 Canada $45,900

5 Finland $41,200

6 Malta $34,700

7 Czech Republic $31,500

8 Slovenia $30,900

9 Slovaquia $29,500

10 Estonia $28,700

Physical distant concept” and cultural proximity was considered. Similar political environment, economic development, geographic and culturally close markets (Arenious, 2006; Muhlbacher, Leihs and Dahringer, 2006)

GDP pc is an important economic variable that illustrates individual incomes, thus the spending capacity for customers to purchase Primark’s products. Higher GDP pc is attractive for business in general.

GDP PPP compare countries’ income levels and other relevant data including cost of living, or rates to inflation or deflation

GDP PPPpc – Is the purchasing power parity rates per capita ( WORLDBANK,2016)

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

Countries eliminated with lowest GDP pc

Hungary, Bulgaria, Croatia, Lithuania, Latvia, and Cyprus .

Possible markets Luxemburg, Norway, Sweden, Canada,

Finland, Malta, Czech Republic, Slovenia, Slovaquia,

Estonia

Second Screening

Possible markets

Population

1 Luxemburg 570,252

2 Norway 5,207,689 (5)

3 Sweden 9,801,616 (3)

4 Canada 35,099,836 (!)

5 Finland 5,476,922

6 Malta 413,965

7 Czech Republic

10,644,842 (2)

8 Slovenia 1,983,412

9 Slovakia 5,445,027 (4)

10 Estonia 1,265,420

Second screening 10 countries to be screened by the highest level of population

Selection of 5 countries countries with the highest population to be screened against the urban population

Luxemburg, Finland ,Malta, Slovenia and Estonia are eliminated. They score well on the GDP pc indicator, however the low population size is a concern, and limits the potential size of the market for Primark.

Population- identifies the market size and the potential for Primark to sell their products. The urban population chart illustrates that Sweden with 85% has the highest score for urban population, following by Canada with 81.8% and Norway with 80.5% For Primark the density of population is of great economic advantage. This indicates larger markets within the market trade. When people cluster the economy is more productive and distribution costs are lower.

(CIA,2015)

(CIA,2015)

Canada

Sweden Norway

Countries with Highest urban

population Canada, Czech

Republic, Sweden, Slovakia, and Norway

Selection of 3 countries with the highest urban population against the low risk corruption index

The closer to 100% less risk of corruption (Transparency InternationalI,2015)

Norway , Canada and Sweden have been identified as

possible market countries for Primark.

They have higher urban population, and lower

corruption index

The Corruption Index, identifies countries where government, politicians are honest and transparent. Also that people in general are treated with respect and human rights are respected. This represents a healthy country for Primark to trade within.

Czech Republic Slovakia

Norway

Total respondents 6091

How many brands do you consider before your purchase?

(The consumer Barometer Survey, 2015)

Canada

Total respondents 6071

Sweden

Total respondents 6124

Chez Republic

Total respondents 6139 Total respondents 6112

Slovakia What offline sources did people use to make a purchase decision?

(TCBS, 2016b) (TCBS, 2016c) (TCBS, 2016a) (TCBS, 2016d) TCBS, 2016e)

Consumers’ Brand loyalty is low Consumers’ Brand loyalty is high

Individualist Cultures (Hofstede Centre ,2016) Low score of Individualist Cultures (Hofstede Centre 2016)

Indulgence 55% Indulgence 78% Indulgence 28% Indulgence 29% Indulgence 68%

Indulgence score adapted from Hofstede, Centre 2016)

Micro criteria - Consumer behaviour

(The consumer Barometer Survey, 2015)

Second Screening

Indulgence- consumers spend money and treat themselves

GDPppp $58,400 Corruption Index

87%

GDP real growth

rate 0.9%

Low population 5,207.689

Limits potential market size

Canada

Sweden

Norway

Norway

Canada, Sweden and Norway to be screened by the

corruption index, against GDP real growth rate

Third Screening

GDP real growth rate 1%

GDP real growth rate 2.8

(CIA, 2015)

1

2

GDP real growth rate is a measure of economic growth. Economic growth “is the increase in an economy's level of real output over time” (Maunder et al,2001. p.531) expressed as a percentage and adjusted for inflation (Investopedia.com, 2016)

The Business portfolio Matrix, identified Norway as the tertiary opportunity. Norway scores well on most indicators, with individual wealth (measured by GDP per capita and GDP per capita purchasing parity), and its corruption index, out performing the UK. Norway also out preforms both Sweden and Canada for individual wealth indicators. However the low population size of Norway at just over 5 million people is a concern, and limits the potential size of the market, leaving Sweden and Canada as more attractive investment options.

Micro environment- Economic Freedom rank

Canada 78

Sweden 26

Norway 32

(Economic Freedom, 2016)

Canada and

Sweden

Members of OECD Most economically developed 34 countries in

the world

Primark benefits from a concentration in urban areas. Canada 81.8% Sweden 85.8%

Both countries politically stable Corruption scores

Canada 83% (closer to 100 the safest) Sweden 89%

Primark as an Irish company benefits from European trade agreements with

Sweden and Canada

Canada $1.6 trillion GDP by country one of the larges economies in the

world Sweden $467 billion is the third largest

of the countries scanned

Micro- criteria

Canada Apparel and

footwear market in 2014

was worth $1,015.8 m (Passport,

2015a)

Sweden Apparel and

footwear market in 2014 was worth

worth $95,725.1 m Increase to

96,925.8m in 2015 (Passport, 2015b)

International brands in Canada H&M

UNIQLO Chicco

Forever 21 Zara

Foreign brands are targeting a niche market gaining significant market share whilst Canadian

domestic brands are reconsidering their strategies to survive and

growth (Passport, 2015a)

Domestic brands are

the leaders in the clothing sector with

low prices and fashionable designs

H&M Mauritz Sverige

KappAhl Nilson GROUP AB

market leader with 14% market share (Passport, 2015b)

Steady growth Consumer behavior Customers are cautious

with spending habits Trends

Areas of significant growth include

sportswear

Consumer behavior Declining unemployment and

positive economy growth enhanced consumer

confidence and buying habits Trends

High demand at high end of market

H&M 78 STORES

SALES $3,918m

(HM, 2016)

H&M 176 STORES

SALES $9,495Mm (HM, 2016)

Fashion trends and competitors Third Screening

Norway Apparel and

footwear market in 2014 was

worth $54,896.6 (Passport,

2016,c)

Market dominated by major chains

Market leaders H&M

Varner- Gruppen Cubus

Dressmann Apparel and footwear forecast is

negative due to reductions in constant retail prices

(Passport, 2016c)

Consumer behavior Norwegian customers are vey price sensitive

Women tend to purchase products

online but men tend to visit retails stores

Sportswear increased 4% in current value

H&M 120 STORES

SALES $5,806m

(HM, 2016)

(Passport, 2015b) (Passport, 2015a) (Passport, 2016c)

Hofstede’s culture framework Culture differences are factors that determine the difference or similarities between a variety of

consumers and affect the consumer buying behaviours and the acceptance of the products Primark needs to recognise those factors to avoid cultural gap (Doole and Law, 2012)

Official languages English and French

Official language Swedish

Canada vs Sweden Fourth screening

Hofstede’s framework illustrated that Canada’s consumers are culturally

similar to British consumers. Highly competitive, and open

to innovations. Canadian consumers could be highly

receptive to Primark’s products due to the

products’ Country of Origen and culture proximity.

The Hofstede framework illustrated a comparative result between Canada and Sweden. (The Hofstede Centre, 2016)

Social/ Culture

Legal

Economic

Political

Technological

SLEPT

Canada 82% of the population between 25 to 64 with university qualification are employed (Statistics Canada, 2011) Culture Official languages English and French

Sweden 81.5% of the population with professional qualifications are employed (OECD, 2012) Language Swedish and good level of English

Canada Governance type Parliament Democracy, A Federation and Constitutional Monarchy (CIA, 2015)

Canada 90% of workers are protected by employment law. Each territory has its own employment standards (Government of Canada, 2011)

Sweden 70% of employees belong to a union. They provide coaching, insurances, and legal support (Sweden ,2016)

Canada Transport is reliable. Extensive network of trains and public transport available. Due to the size of the country people travel by airplane regularly. Canada invest heavily in technology, R&D, and innovation (Government of Canada, 2015)

Canada Inflation 2.01% Currency Canadian dollar (Trading Economics, 2016)

Sweden Inflation 0.90% Currency Swedish krone (RISKBANK, 2016)

Sweden Transport includes a reliable, extensive network of underground trains (Need to pay by card) Sweden ranked as most advanced countries (The Telegraph, 2016)

Sweden Uncertainties in the EU due to the forthcoming UK referendum (TEC,2016) Governance type Constitutional Monarchy (CIA, 2015)

Canada vs Sweden

Negative inflation in 2015, but apparel and footwear sales increased

(Passport, 2016b)

SLEPT framework is a environmental analysis model that helps the marketer to examine various aspects in the international marketing environment. (Lowe and Dole, 2012, p.5)

Sweden Age structure: 0-14 years: 17.12% 15-24 years: 11.97% 25-54 years: 39.3% 55-64 years: 11.63% 65 years and over: 19.99%

Canada Age structure: 0-14 years: 15.46% 15-24 years: 12.39% 25-54 years: 40.69% 55-64 years: 13.74% 65 years and over: 17.73%

(CIA, 2015)

(CIA, 2015)

Accessibility

Profitability

Market share

Canada- Sweden Opportunity Identification Analysis

Accessibility Canada

Accessibility Sweden

Profitability Canada

Profitability Sweden

Market size Canada

Market size Sweden

Canada is member of NAFTA . Canada and Ireland have a bilateral trade agreement. The CETA (Comprehensive Economic and Trade Agreement). It is aimed to facilitate business opportunities, remove tariffs and customs duties, and offers “predictable conditions for investment” (European Commission, 2016a). Canada is open to trade and investment. The score illustrates countries freedom with a high score of 78.

Member of European Union – no trade barriers or tariffs but not part of Euro zone so currency conversion costs to/from Swedish Krona. Foreign retail investment unregulated. Sweden is open to trade and investment.

Sweden ‘s currency is identified as a stable currency. Stable economy with strong available currency. Sweden has laws to protect consumers. Competition in the apparel and footwear sector is high.

Canada has stable currency and economy. Canada's government implemented voluntary codes of practices to protect the consumer and the business including products pricing. However, they do not force any business price strategies. The retailers have frequently been using price promotions (Passport, 2016). Some clothing retailers have used price strategies to gain market share, promoting their products as “chip and chic fashion” (Government of Canada, 2013).

Canada’s population is 35,099,836m. 82% of the population between 25 to 64 have an university qualification and are employed (Statistics Canada, 2011). Canadian’s GDP pc is high, hence they have the disposable income for purchasing. Primark's products are ideal for Canadian customers. There is a potentially high demand for Primark’s products.

In Sweden 81.5% of the population with professional qualifications are employed (OECD, 2012). High GDP pc, however the low population size of Sweden of 9,801,616 is a concern, and limits the potential size of the market for Primark.

Canada and Sweden- Opportunity Identification Analysis

Commercial moderate risk for Primark in Sweden is due to the high levels of competition and low population compared to Canada

According to Transparency International, (2015), both countries are politically

stable. The low corruption index for both Canada and Sweden indicates the viability

for Primark’s foreign investment. Sweden 89 and Canada 83

Both Canada and Sweden have similar individual wealth indicators as the UK

(Primark’s largest market), indicating that the customer profile is likely to be similar

(Worldbank, 2015).

Whilst Sweden’s growth at 2.8% is stronger than the UK, and suggests a growing market for Primark there, Canada is

currently experience slow growth at 1%. However it is believed that Canada’s

economy is already large enough to offer a good market for Primark.

There are low industrial or financial risks in Sweden or Canada

BER Business Environment Rankings( 2014) illustrates the global ranking score for Canada and Sweden. "Both countries rank extremely well on market opportunities, foreign trade and exchange controls remains an area of strength”( BER, 2014)

McKenzie 7 s

Shared Values

Structure

Systems

Style

Staff

Skills

Strategy

In McKenzie’s 7s framework, shared values, skills, style and staff

are considered the software of successful management and are

affected by cultural differences (Doole and Lowe, 2012)

For Primark, these elements are important to align departments

and processes during the transition for internationalisation helping to

implement the new strategy Shared values

Primark’s core values are: looking after their

stakeholders, and behave ethically in all the aspects

of the business operations

(Primark, 2016)

Skills Primark’s HR department need to arrange training

and development programs to ensure that their employees provide the best service for their

customers.

Staff It is important that Primark recruits capable staff . General knowledge

about customer service, the organisation and its suppliers is

required . The implementation of incentives and rewards is a good tactic to keep staff engaged and motivated, thus benefiting the performance of

the organisation

Style Leadership is pivotal for Primark’s success. For

international expansion the vision needs to be clear.

The inspiration and motivation from the management team is

important to gain respect and credibility from their

employees and future patners

12 C framework

15

Country Canada Sweden

General country information

Democracy Capital Ottawa, rich in natural resource. Politically stable democracy, with constitutional monarch (CIA,2015a) Part of NAFTA – so no trade barriers with US & Mexico High levels of per capita income and spending parity Slow economic growth (1%) Member of OECD Member of G8 Member of commonwealth Low levels of corruption Largest trading partner USA Energy self sufficient – net exporter Lower than average effect of global recession

Democracy Capital Stockholm Politically stable democracy Part of EU(CIA,2015b) High levels of per capita income and spending parity Member of OECD Low levels of corruption Continued growth expected 2.8% in 2015 Unemployment to 7.5% (Tradingeconomics, 2016) Negative inflation in 2012, but price increases in clothing of 2.9% Bond rates lower than European average indicates international confidence in Swedish economy (Jones Lang LaSalle, 2011; Eropeancommision, 2015)

Concentration Structure of the market segments Geographical spread

High level of urban concentration – similar to UK. Concentration in North East with short travel distance Toronto 5.993m Montreal 3.981m Ottawa 1.326m Calgary 1.337m Vancouver 2.485 m (CIA, 2015a) 80% of population live within 90miles of US border Concentration of clothing market – 18.9% from largest retailers (Government of Canada, 2013)

Very high levels of urban concentration – higher than UK Stockholm 1.38m Gothenburg 561k 291m Malmo 280k 381m Uppsala 140k 44m 50% of retail sales in Stockholm are in retail malls with new malls recently opened in Malmo and Stockholm – the new Stockholm mall is the largest in Sweden (Euromonitor, 2015)

Canada Sweden

Culture/ Consumer Behaviour Characteristics of the country Diversity if cultural groupings Nature of decision-making

Religion predominant Catholic and Protestant English and French widely spoken – parts are predominantly French speaking – e.g. Montreal Quebec 56% are bilingual European heritage – high proportion of English, Scottish and Irish (CIA,2015a) Cautious value driven purchasers – growth in discount and online retail (Passport, 2015a)

Religion predominant Lutheran(CIA,2016) Recovering apparel sales following passing of Eurozone crisis Growth in premium product sales – especially male Strong competition at value end –H&M Growth in internet sales Growth in men’s fashion – especially at high end of market Egalitarian society – ‘showing off’ frowned upon socially ( Euromonitor, 2015b; Hofstede Centre, 2016)

Choices Analysis of supply International and external competition Characteristics of competitors Import analysis Competitive strength and weaknesses

53% of retail foreign owned Wall Mart, and Cost Co (both USA) leading retailers Competitors are large supermarkets usually located in suburban shopping malls. Growth in online. Canadian retailers upgrading stores in response to growth in foreign retail expansion Canadian Malls generate 50% more sales Per sq. ft. compared with US malls (Government of Canada, 2013)

Leading apparent companies all Scandinavian H&M market leaders, followed by Lindex Sverige AB (from Finland) KappAhl Sverige AB, Nilson Group A – all oofer low- medium pricing with sensitivity to fashion trends (Euromonitor, 2015b)

Consumption Demand and use analysis of economic sectors that use the product Market share by demand sector Growth pattern of sectors Evaluation of the threat of substitutes products

Clothes and shoes are needed by all – however fashion and economic wellbeing can determine rate of consumption Growing men’s market – especially of premium products, partly due to new stores for men. Women’s market stable Athleisure – gym to street cloths – growing sector with Lululemon market leader (Euromonitor, 2015a) Canadian retail sales equaled USA per capita in 2011 Sales of clothes were $26b in 2011. 5.7% of all retail transactions

Well performing Swedish economy - property market strong, interest rates low ( and just reduced to minus 0.5%) H&M – increased sales in 2015 Premium product sales rising fastest

17

Canada Sweden

Contractual obligations Business practices Insurance Legal obligations

Limited expansion of stores due to lack of space in cities and restrictions on planning for out of town malls has limited growth

Must comply with EU law including working practices, tendering requirements Foreign retail investment unregulated

Commitment Access to market Trade incentives and barriers Custom tariffs

Member of NAFTA – The comprehensive Economic and trade Agreement (CETA), is aimed to significantly reduce tariffs and facilitates trade between EU and Canada (European Commission, 2016)

Member of European Union – no trade barriers or tariffs but not part of Euro zone so currency conversion costs to/from Swedish Krona (Embassy of Sweden, 2016)

Channels Purchasing behaviour Capabilities of intermediaries Coverage of distribution cots Physical distribution Infrastructure Size and grade of products purchased

Growing e-commerce Pressure on margins and revenues due to discounting Growth in upmarket sales Growth in catalogue sales – H&M (Euromonitor, 2015a)

Internet – 11% of market and growing Scandinavian retailers hold all top 4 market share – H&M top. All offer low to mid range prices, with fashion (Euromonitor, 2015b)

Communication Promotion Media infrastructure and availability Which marketing approaches are effective Cost of promotion Common selling practices Media information

Most newspapers are city based with the Toronto Star having the largest circulation. There are two national papers, plus the French Le Devoir which is popular in Quebec. Television is mostly commercial, but with a public service channel

Most newspapers are city based and enjoy wide readership – 75% of population read papers. 50% of all advertising spend is through newspapers and magazines Direct mail is second largest distribution channel with 30% of expenditure Television and ratio are mainly public service and without advertising. Commercial television is growing through cable and satellite services Advertising strictly controlled for accuracy

Capacity to pay Pricing Extrapolation of pricing to examine trends Culture of pricing Conditions of payment Insurance terms

GDP PPP higher than UK Prices at lower end being squeezed by internet and large foreign retailers like Wall Mart Premium product growth

GDP PPP higher than UK Falling unemployment (Passport, 2015b) Good growth Low interest rates Pressure on pricing at value end of market, but growth in premium product sales

18

Canada Sweden

Currency Stability Restrictions Exchange controls

Currency Canadian Dollar – stable currency (0.7% fluctuation with Euro and 4.1% with US dollar in 2015) No exchange controls Interest rate 0.5% - same as UK (Everbank,2016)

Currency Swedish Krona - stable Member of EU – but not single currency No exchange controls No trade barriers with Ireland Interest rate – minus 0.5% (everbank, 2016)

Caveats Low levels of economic growth Dominance of superstore Distances mean concentration in East

Domination of market by Scandinavian companies Rising e commerce at expense of stores Mature market with intense competition

12C summary

Both Canada and Sweden offer Primark a politically and economically stable, relatively risk free investment opportunity. The rule of law, the stable currency, low interest rates, and the absence of exchange and import controls make both countries attractive for international expansion.

Canada offers a higher population, with strong levels of urban concentration in the East of the country, where the large metropolitan areas of Toronto, Ottawa

and Montreal, which are closely located to each other, offer strong logistical advantages.

Whilst Sweden is enjoying good economic growth, the continued uncertainties in the European Union, which might be exacerbated by a British withdrawal, suggest that stability and prosperity of the Canadian market, where per capita spending has reached the level of the United States, may offer the more attractive

alternative.

Furthermore the Canadian market is much less dominated that the Swedish market by domestically owned retailers, and a wider range of marketing channels is available than in the state run Swedish media.

It is therefore recommended that Primark pursue expansion opportunities in Canada

Selected country CANADA- Proposed strategic positioning of Primark in Canadian the Market

Perceptual map High Price

Narrow product range

Lower Price

Broad product range

The axis for the perceptual map included price and product range. Primark is positioned as a brand with an extensive range of products with lower prices and acceptable quality

Proposed strategic positioning of Primark in Canadian Market

It is recommended for Primark to compete on the basis of differentiation following market development strategy for growth and expansion. Primark’s brand is perceived as highly differentiated, with a strong image of good value for money, offering fun and vibrant products (Mintel, 2015a). Aichner (2014), suggested that organizations should communicate their company COO (country of origin) of their products to gain successful market entry and competitive advantage. The advantages for Primark, as an Irish based company with a positive image, in trading in Canada, with its large proportion of people of Irish (13.8%), Scottish (14.4%) and English (19.7%) heritage who may recognize or be attracted to the brand are substantial, as is the ability to conduct trade primarily in English (CIA,2015). Hofstede's framework illustrated the importance of cross –cultural research prior to the development of new international markets.

(Adapted from Gogel and Larrege 1989, in Doole and Lowe, 2012, p.189)

Canada’s consumers are identified with the "chip and chic fashion” trend for purchasing day to day fashion items (Government of Canada, 2013). This consumer behavior could help Primark to develop a successful business strategy with his trendy and differentiated range of products. The locations suggested to introduce Primark to the Canadian consumers are cities in the North East with short travel distances between them, including Toronto with 5,993m and Montreal with 3,981m inhabitants.

Toronto Montreal

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