1

2
3
 4

1. Introduction

Coronavirus had the most adverse effect on the UK economy after World War 2. As a result
of covid – 19, UK retail sales fell significantly from March 2020 when non-essential retail
stores were closed due to lockdown restrictions and from April 2021 the sale has recovered
gradually after reopening the nonessential retail shops. Pandemic brought different
experiences to different types of business sectors. In the retail sector, fashion and clothing
businesses like – Primark, are the most affected.

This report will analyse, the external environment of the retail industry sector, the internal
environment competence of the business. In addition, Assess the impact of implementing
change using the relevant model. In conclusion, the industry strategy recommendations are
aimed at aiding decision making and keeping the firm competitive and retaining its
customers in the market.
 5

2.1 Identifying Issues and challenges of Primark

Primark, owned by Associated British Foods, was founded in 1969, has 71,000 employees in
400 stores in 14 countries (ABF, 2022). According to www.retaileconomics.co.uk, Primark is
the leading clothing and footwear retailer in the UK. Primark has 7.1% of the UK clothing
market share (Smith, 2021). In 2020, the total retail market value was £403bn of which 28%
was an online sale (www.retaileconomics.co.uk).

Figure shows the impact of coronavirus restrictions on the UK retail industry (Muhammad, 2021).

Total UK fashion sales soared by 61.5% in 2022 than last year (Caroline, 2022). By 2026, 38%
of UK retail shopping will be online (Chloe, 2021). Primark does not have an online sale
platform (Lynsey, 2022). During the coronavirus pandemic, non-essential retail stores were
forced to close temporarily, and the sale of Primark dropped from £650 million to £0 per
month because they do not have online revenue (Claire, 2022). Online sale platforms may
increase Primark’s total revenue.
 6

2.2 Analysis of an organisation’s external environment

a) Primark’s industry sector analysis.

The external environment of an organisation includes all outside factors and influences that
impact the operational process of a business. These functions are to be identified and
responded to by the business to maintain the business process (Worthington, Britton and
Thompson 2018).

Primark operates its business in the retail industry with many other competitors offering
similar products and services to distinct groups of customers within the market. To fulfil the
specific demand and requirement of the customer, depending on the characteristics such as
geography, demography and behaviour, Primark needs to identify and respond to industry
element data of their external environment to make appropriate business strategy.
 7

Organisation’s external industry environment (iEduNote, 2022).

Supplier: Good relationship with the supplier ensure the quality input of products to the
business. Primark is transparent about its global sourcing, and they pay attention to the
health and labour conditions of the third-party supplier (Smith, 2022).

Customer: Profits are gained through the satisfaction of the customer. Primark fulfils the
ever-changing customer demand.

Competitor: Competitor analysis is important to keep the business competitive.

Regulator: businesses are controlled, regulated and influenced by the regulators.

Substitute products: To meet the customer demand, substitute products are threats and
indirect competitors of the business.

Strategic partners: Other businesses or individuals work together by agreement to gain

profit and influence the business process in different ways.
 8

b) TAM, SAM, SOM Model to determine the market size of Primark.

Market research tools are used to estimate the potential market size and to improve the
industry sector performance especially at the time of launching new products, diversifying
and expanding the business into the new platform. TAM, SAM, SOM model is used to obtain
market research data, calculate the business’s size and compare with its market and
competitors (Molly, 2021).

Total Available Market (TAM): defines the total possible market demand of the business’s
product.

Serviceable Available Market (SAM): geographically reachable market within the total
available market according to the current business model.

Serviceable Obtainable Market (SOM): the portion of the serviceable available market can
be captured by the business based on the practical limit of the business model.

To expand Primark’s business to the online shopping platform, they should obtain the
market size information and the online retail sale market research data and use the TAM,
SAM, SOM model to estimate the potential market.

The total sale of fashion products in the UK

is the total available market for Primark.

Total online sales of fashion products in the

UK are the serviceable available market for
Primark.

Total sale of low price, budget, online

fashion products in the UK are the
serviceable obtainable market for Primark.
 9

TAM, SAM, SOM model (Molly, 2021).

c) Industry report of Primark at the Covid 19 pandemic period.

UK retail sector was almost standstill during the coronavirus pandemic and the businesses
are still struggling to remain at their best on performance. However, some businesses
maximise their profit during the crisis and are likely to perform better after the covid – 19
crisis is over. The Covid 19 pandemic affected Primark’s business process. Critical industry
analysis in the form of market research is required to determine the market conditions
which is used to estimate the demand and supply to maximise the financial returns from the
business. The four largest UK stores have affected the business of the budget clothing chain
Primark’s because of the lack of tourists (Sarah and Julia, 2021).
 10

2.3 internal environment competence analysis

a) Primark’s internal environment competence analysis.

The internal environment is the business elements that are within the boundary and can
influence the business strategy and take decisions to improve the performance of the
business. An organisation’s value depends on the internal environment of the customer.

Organisation’s internal environment.

Value System: All the components that are part of the regulatory framework are Value
systems.

Vision Mission and Objectives: Business conditions in the future are the vision, the current
business process is the mission and the ultimate goal of the business to reach is the
objectives.
 11

Organisational Structure is to determine the way of business process to reach the ultimate
goal. Organisation structures can be a matrix, functional, bureaucratic and divisional
structures.

Organisational Culture: The value, beliefs and behaviour of the organisation are used to
communicate between the management and the employees in the business and the
management procedure of the external affairs.

Human Resources: Organisation’s success depends on the performance of human

resources.

Physical Resources: Physical and technological resources are the tangible assets of the
organisation which provide competitive advantages.
 12

b) Mckinsey’s 7S’s model to identify challenges and opportunities for Primark in

response to its competitive environment.

McKinney’s 7S’s model is used to determine the challenges and opportunities for Primark to
remain competitive. This model also evaluates the business performance and identify the
areas where improvement is required. McKinney’s 7S’s elements are interconnected as a
result, changing any elements may impact others (Andrea and Ian, 2019).

McKinney’s 7S’s model (Andrea and Ian, 2019).

Strategy: Long term planning by the business to remain competitive in the retail industry.
Primark’s strategy is to deliver good quality and low budget fashion products to attain a
competitive edge over rival businesses like – Zara, H & M.

Structure: internal structure of Primark’s organisational structure and the level of

responsibilities amongst their employees.

Systems: the internal business procedure to determine the organisation’s management

systems like – finance, recruitment process.
 13

Shared values: the collective accepted culture and value of the business management and
the employees within the workplace.

Skills: the combination of the talent and the capabilities of employee and the organisation
performance which can determine the capabilities to achieve the organisation’s goals set
out in the strategy.

Style: the management approach and the leadership model of the organisation which
influences the business performance, productivity and organisation culture.

Stuff: the motivated and trained workforce of the company to perform business processes.
 14

c) The combined finding of Primark’s external and internal business environment

analysis.

Different elements of the external environment have different influences on business

operations to remain competitive. Regular analysis of the external environment helps to
identify the environmental factors and the market conditions that may influence the
business directions by the report of market demand and supply. Future crises or
opportunities in the industry can be predicted or may be avoided by the analysis of industry
sector research data and financial return from the business can be predicted.

Coronavirus pandemic affected the business process of Primark as well as its competitors.
Most of the competitors have online selling features on their websites and they gained
online revenue during the pandemic. Primark’s potential internal environment are
competent enough to establish the online sale platform and remain competitive even in a
future crisis.
 15

2.4 impact and influence of change and culture

a) The impact of implementing Lewin’s three-step change management model on

Primark.

Changing one or more elements of the systematic effort to improve the organisation’s
performance is the organisational change (Boddy, 2017). Introducing a new online sale
platform, changes in business structure or process are the organisational changes.
Organisational change is an unavoidable and content willingly or reluctantly feature of the
business (Mullins, 2016). Organisational structure, technology, physical setting and people
are the change options for the organisation (Robbins and Coulter, 2014). By nature, human
beings do not like to change. Change is systematically planned then initiated, organised,
managed and monitored by the business management. Business leaders use the techniques
and methods to introduce and manage organisational change. Lewin’s three-step change
management model is commonly used to manage the impact of implementing change.

Lewin’s three-step change management model.

Unfreeze: To introduce the new system successfully, the old system needs to be technically
discarded. The unfreezing process gets the organisation ready for the change.

Move: changes are applied in this process and shift the organisation to the new state.
Employees may need the training to adapt to the expected organisational change.
 16

Refreeze: at the final phase, the business leaders reinforce the new practice to adopt the
change by adjusting resources, policies and procedures to suit the new change.
 17

b) The influence of organisational culture on Primark’s decision-making during change

Every organisation has their own culture of performing the business process in its own way.
Leadership decision making, communication style, customer relationships are included in
the organisational culture. Culture influences the leaderships and management process of
an organisation (Warner, 2012).

Handy’s four classes of organisation culture (Warner, 2012).

Power culture: few individual controls and hold the power to make decisions swiftly in the
power culture organisation. Little bureaucracy and few rules in this class of culture.

Role culture: the culture is built on the role of the organisation’s structure where power is
distributed according to the role. Role culture is hierarchical bureaucratic in nature.

Task culture: the power is embedded within the team of a particular project. Matrix
organisations use task culture, and the team can develop their own objectives.

Person culture: the power is distributed in an individual group of people such as lawyers,
accountants.
 18

Primark has a role culture where the power and responsibilities depend on the role in the
business.

c) Six-Sigma theory to analyse the effectiveness of operational functions of Primark.

Operational management is the functions or systems that are used by the organisation to
transform the designed and managed inputs and the outputs for the better effectiveness of
the organisation’s performance. Six sigma is a well-known data-driven methodology to
eliminate the weakness by processing improvements of the operational management
process of any organisation.

Six sigma is a five phases improvement process known as DMAIC.

D - Define phase: Problems are defined, and the objectives are set in this phase.

M – Measure phase: Achievable requirements are measured in this phase.

A – Analyse phase: Influence factors are defined, and processes are analysed.
 19

I – Improve phase: Improvement processes are identified and implemented.

C – Control phase: Effectiveness of the improvements and sustainability is ensured.

d) 1. Stakeholder landscape

Any individual who has devolved interest in the business process, activities and decision
making of the business is a stakeholder. Stakeholders can be both organisations and people.
Stakeholders can be internal or external.

Internal stakeholder –
Employees, managers, board of directors, shareholders.
External stakeholder –

Customer, suppliers, government agencies, media.

Identifying and evaluating the importance of key individuals, groups of individuals or

organisations who may have a significant influence on the business activity is called
stakeholder analysis.

Keep satisfied (high power low Encourage and influence (high power high
Influence/Power of stakeholder

interest) interest)
 Government agencies  Executive,
 Customer  board of directors.

Monitor (low power low interest) Keep informed (low power high interest)
 Helpdesk.  Supplier,
 System admin.  developer,
 tester,
 trainer.
High
Low

Low Interest of stakeholder

High

Stakeholder power - influence grid.

20
 21

d) 2. Stakeholder mapping

Different stakeholders may have different interests and power in the business. The process
is used to identify the level of power and the level of interest in the business is called
stakeholder mapping. This is a graphical representation of the power and interest of
stakeholders which helps the organisation to identify and respond to the category of the
stakeholder.

Four steps of stakeholder mapping.

Identify: Stakeholders need to be defined.
Analyse: the impact and influence of the stakeholder need to be analysed.
Plan: communication and reporting with the stakeholder need to be planned.
Engage: Stakeholders need to be engaged.
 22

2.5 Strategic Planning

a) Benefits of planning

When formulating strategy, planning encourages to use of the methodical approach and
applying solutions. Planning encourages thinking critically and helps to achieve a more
integrated system.

The retail industry is very competitive. Primark should continuously improve its planning on
business strategy to gain competitive advantage

b) The Plan-Do-Check-Act (PDCA) is a four-step problem-solving approach that allows the

business to test different types of solutions for the problems to determine the most suitable
solution before implementing it. PDCA model is used to produce the plan and introduce the
future strategy for Primark and to improve the performance of the management task for an
extended period.

Plan: Planning for the development of new product and production process

Do: creating and testing the prototype and acquiring the customer data.

Check: Measure the collected customer data with the requirement.

 23

Act: Acting on the most suitable design developed.

c) Recommendations for Primark for post-pandemic and the long term.

Online shopping platform: Customers prefer to shop online from their own comfort. An
online selling platform is required to remain competitive.

Lower cost: online shopping reduces the overall cost of the business in the long run.

Social Media: social media plays a very important role in the customer’s choice. Primark
must improve its social media activities.

Competitor Analysis: Primark should investigate the recovery process of the competitor’s
post-pandemic strategies.

New stores: Primark should open new stores in the cities where the Covid – 19 vaccines
have been rolled out and the infection rate is very low to avoid any more unexpected
situations (Joanna and Julia, 2021).

In-Store Environment: Stores should have a plan for social distancing for future crisis’s
situations.

Improved Customer Service: Improved technology-based customer service for the long run.

Rebuild: Primark should continue to invest more in its outside of the town stores because
the pandemic has the most effect in city centres (Sarah and Julia, 2021).

Sustainability: Primark should keep its commitment to making all of its clothes more
sustainably sourced and using recycled materials in future to make them cost-effective
(Joanna, 2021).

Extended opening hours: 153 stores were open 24 hours for business before Christmas
2020 which brought satisfaction to many customers (Lucy, 2020). Primark should extend its
opening hours during the festival period to spread the crowd and minimise the risk of
spreading the infection.

Harsh Economic Condition: Primark should keep the cost and the price of the product lower
to meet the customer requirement for the post-pandemic harsh economic conditions.
 24

3. Conclusion

Covid - 19 has changed the UK retail industry and the whole of the economy since 2020. To
remain competitive in the market, businesses used the technology as part of their strategic
planning. Major organisations are generating and implementing new innovative ideas to
their business for efficient movement of information and receive customer response with
the help of internet technologies. The traditional business environment has been changed
and internet technologies are becoming the most efficient and accurate way for managing
the challenges of the modern business process. Well-developed infrastructure of internet
technologies is reliable for the businesses for the efficient internal and external data
processing system, closely connected with the suppliers and the partners, monitoring the
sales and promotions, better customer relationship management. Online sale platforms will
bring better compatibility and sustainability in the long run for Primark to gain competitive
advantages.

This report analyses the external and the internal environment of a retail business and a few
methods are used to analyse the impact of the influence of change on the business after the
coronavirus pandemic situation. Using suitable strategies and approaches, a client report
has been produced with some recommendations for Primark to gain competitive
advantages on post-pandemic and in the long term.
 25

Reference list

ABF, (2022). https://www.abf.co.uk/our-businesses/retail. Accessed on 10/02/2022.

Andrea, C. and Ian, T. (2019). The Procurement Models Handbook. Online.

https://ebookcentral-proquest-com.uos.idm.oclc.org/lib/ucsl/detail.action?docID=5760861.
Accessed on 10/02/2022.

Boddy, D. (2017) Management: An Introduction (7th Ed). Harlow: Pearson Education.

Caroline, W. (2022). Fashion sales surge in February. Online.

https://www.drapersonline.com/news/fashion-sales-surge-in-february. Accessed on
10/02/2022.

Chloe, R. (2021). UK retail sales set to be 38% online by 2026: study. Online.
https://internetretailing.net/industry/industry/uk-retail-sales-set-to-be-38-online-by-2026-
study-24132. Accessed on 10/02/2022.

Claire, S. (2022). Primark website: retailer announces new online UK store launch date - how
it will work. Online. https://www.nationalworld.com/lifestyle/money/primark-website-
retailer-announces-new-online-uk-store-launch-date-how-it-will-work-3536422. Accessed
on 10/02/2022.

(iEduNote, 2022). Internal and External Environment Factors that Influences Organizational
Decision Making. Online. https://www.iedunote.com/organizational-environment-elements.
Accessed on 10/02/2022.

Joanna, P. (2021). Primark pledges to make all its clothes more sustainable by 2030. Online.
https://www.theguardian.com/business/2021/sep/15/primark-clothes-sustainable-retailer-
carbon-emissions-plastics. Accessed on 10/02/2022.

Joanna, P. and Julia, K. (2021). Primark plans more than 100 new stores worldwide in Covid
rebound. Online. https://www.theguardian.com/business/2021/nov/09/primark-new-
stores-covid-shares-abf-ftse-100-sales. Accessed on 10/02/2022.
 26

Lucy, C. (2020). Shoppers go the extra mile for Primark's open-all-hours trading marathon.
Online. https://www.theguardian.com/business/2020/dec/03/shoppers-go-the-extra-mile-
for-primarks-open-all-hours-trading-marathon. Accessed on 10/02/2022.

Lynsey, B. (2022). PRIMARK has finally revealed when it will launch a new website for
shoppers. Online. https://www.thesun.co.uk/money/17385583/primark-reveals-date-new-
website-tool-help-shoppers/. Accessed on 10/02/2022.

Molly, W. (2021). Market Sizing: Measuring Your TAM, SAM, and SOM. Online.
https://www.similarweb.com/corp/blog/research/market-research/market-sizing. Accessed
on 10/02/2022.

Muhammad, K. (2021). Impact of the coronavirus (COVID-19) pandemic on retail sales in

2020. Online. https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/
impactofthecoronaviruscovid19pandemiconretailsalesin2020/2021-01-28#:~:text= In%202020%2C
%20total%20retail%20sales,remain%20below%20pre%2Dpandemic%20levels. Accessed on
10/02/2022.

Mullins, L. J., (2016). Management & Organisational Behaviour. Harlow: Pearson Education
Ltd.

Robbins, S.P. and Coulter, M. (2014). Management. 12th Edition. Harlow: Pearson Education
Ltd.

Sarah, B. and Julia, K. (2021). Primark: UK city centres 'not dead' despite Covid crisis. Online.
https://www.theguardian.com/business/2020/sep/07/primark-uk-market-share-covid-
lockdown. Accessed on 10/02/2022.

Smith, P. (2021). Primark: share of clothing market in the United Kingdom (UK) 2007-2018.
Online. https://www.statista.com/statistics/787728/primark-clothing-market-share-united-
kingdom-uk/. Accessed on 10/02/2022.

Smith, P. (2022). Primark: share of clothing market in the United Kingdom (UK) 2007-2018.
Online. https://www.statista.com/statistics/1102388/number-of-suppliers-of-primark-by-
region/. Accessed on 10/02/2022.
 27

Warner, J. (2012). Organizational Culture Diagram. Online.

https://blog.readytomanage.com/organizational-culture-diagram/. Accessed on
10/02/2022.

Worthington, I., Britton, C. and Thompson, E. (2018). The Business Environment: A Global
Perspective, 8th Edition, Pearson.