Crisis at Primark Cloth Shopping

SUMMARY:

Crisis Management deals with an act of assuming control over a time of intense difficulty, trouble or disaster that causes serious problem to the organization, its stakeholders or to its ultimate consumer. When a crisis taken place there will be a sudden takeover action by the manager in order to ensure that would never repeat and accordingly different crisis safety plans are implemented in short term period. Crisis Management is a contrast process of Risk Management, which include estimating the natural threats and risk involved in the business already and recognizing the effective method to prevent from those risks and dangers, were crisis management involves in implementing new strategies after the crisis occurred and also known as recovery stage.

This essay elaborately explains about Primark's crisis management frameworks and intervention strategies followed by them to attain great success in the retail clothing industry as number one in United Kingdom.

ABOUT PRIMARK:

Primark is a renowned cloth-shopping store well known for its cheap price, simple design and fast fashion collections. Its continuous success story has been originated from its extraordinary management techniques and policy of ethical trading. In June 1969, the first Penneys store was established in Dublin, Ireland. By 1973 it enters into Great Britain by setting up four retail outlets and started its trade. Later on, it randomly opened many retail stores in Ireland and UK. Primark has grown tremendously by its quality trading and acquisition made during all these years. As adding new milestone to its success story it also planned to expand its business globally, therefore Primark opened its first store in Spain in the year 2006 and later on entered into Netherland, Portugal, Germany and Belgium respectively. According to Primark's store count report at present it has 219 retail outlets globally.

Primark have made history in the retail marketing by achieving many things and as a result it paved way to honor them by receiving Multi Market Retailer of the year 2010, awarded by World Retail Awards. Also the company chairman, Arthur Ryan won the best Retailer Award, 2010 (Oracle Retail, 2010).

MAIN AREA OF BUSINESS:

Clothing and Footwear market is one the major business area were consumer expenditure power is very high with an annual turnover of £45 billion in the year 2010 (Key Note report, 2010). Primark is one of the top retail-clothing stores in the whole Europe with year-by-year increase of its operating revenue from 8% to 20% (BBC, Nov, 2009). Moreover Primark follows its own strategies, which suits its organization such as like-for-like sales and cost cutting strategies to improve its overall sales and to build its brand. It also has its several own brands in the market. Its main target focuses on budget sales and the customers are attracted towards them by giving vast collections and cost effectives goods. This made evident by a report shows 5% increase in Primark's retail clothing sector were other retailers affected by dip in sales of 0.6% (Verdict report, 2009).

RISK AND CRISIS MANAGEMENT:

Risk and Crisis Management is very essential for every organization to run efficiently and effectively. The main aspects of these management terms are contrast to each other as it discussed above. Risk factor is common in any type of organization and risk level is differs accordingly. Crisis describes the threats to the organization affected in a short time and as a challenge to the managerial department in order to take action instantly. Always the crisis arises when there is a false or weaker risk policies are followed. Perhaps crisis may occur because of different reasons for example the internal factors like fire accidents, computer failures, labor conflicts and other internal risk factors, on the other hand it may happen because of poor economic conditions, regression, natural calamities and many external other factors. Therefore this states there is a strong relationship between the business and its environment.

The most common crisis that threats majority of managers is the financial crisis as the finance is scarce to turnaround. This affects the business from expansion and growth, moreover for any crisis remedy action finance is essential to takeover. The main reason for this crisis is through improper planning of credit and poor budget planning.

For any organization the management should have clear risk and crisis planning and action has to be taken as quick as possible. This is possible when the communication between the top-level management and lower-level management is effective. Unlikely, if the communication channel is weak then the decision making process might be affected during crisis and hence every organization should have their own crisis strategies that suits its environment.

ANALYSIS ON THE INTERNAL AND EXTERNAL ENVIRONMENT OF PRIMARK:

Primark follows ethical trading policy after the crisis from the year 2006. It acts independently by maintaining its own strategies according to its environment and business conditions. After following ethical trading policy Primark mainly concentrates on evaluation of employees working conditions, factories operations and other required actions for improvements. However, environmental changes that took place inside and outside Primark's stores have its consequences according to global business market. Hence Primark's ins and outs environment can be examined by using PESTLE and SWOT analysis respectively.

PESTLE ANALYSIS OF PRIMARK:

Framing strategies is very important for every organization to its development and achieving their target market. Every organization has its own strategies as the business have active relationship with its environmental conditions. For example if a new company enters into the market it suppose to follow a brand new strategy which suits its environment and it cannot implement a strategy of any other company as their business environment vary with them.

PESTLE analysis explains about the core relationship between business and its environment. Primark is success full in the retail industry and they analyzing in-depth to obtain better strategies for their organization to achieve more and sustain their success story.

Political Analysis is appropriate for every organization to take on action along with the changing political conditions and government's legal act may have an effect on organizations functioning as the environment changes. As the organization framed its strategy according to the previous political act, there arise a cause to alter the business strategy