An Investigation About The Primark David Cameron

Primark Investigation
Student’s Name
Institutional Affiliation
Primark Investigation
Primark was established in 1969 in Dublin, Ireland by Arthur Ryan under the name Penneys. It success in the Irish market led to its expansion into the UK market. Since the company was registered as Penneys in its home country, it reinvented its name to “Primark” considering that there was a company that was already registered and operating in that name “J. C. Penney”. Therefore, “Primark was invented for use outside Ireland. It is a clothing retailer with operations in more than five countries. In 2005, it became a subsidiary of Associated British Foods (ABFs) (Primark.com). At the end of 2015, its global turnover amounted to £5.4 billion, this indicates that the company is experiencing a tremendous success. Primark’s low price value has made it to be the low cost leader in low priced fashion. Low priced products by the company has attracted more customers especially after the 2008 financial crisis where customers who felt the impact flocked the outlets because of its low prices. This has contributed to Primark’s revenue growth and profitability (see the figure below).
Source: Statista.com
Macro Environment
Political Factors
It was predicted that Brexit was to cause both political and economic turmoil as well as uncertainty in Europe. Unsurprisingly, after Britain voted to leave EU in June 2016, it sparked political upheavals in UK resulting the in the resignation of Britain’s Prime Minister David Cameron. Brexit also led to the Scottish Prime Minister Nicola Sturgeon call Scotland’s second independence referendum with opinions aimed at protecting the interests of their country in EU since they voted to remain (Douglas & Gross, 2016).
Brexit has also created a lot of uncertainty for almost all businesses with operations in Europe. Although some organizations such as Primark benefited from the pound’s depreciation against other currencies like the dollar and Euro, ABF, Primark’s parent company have indicated that the move have created uncertainty in UK’s business environment. It also stated that the company will experience adverse transactional effects that will affect its profit margin if Britain leaves the European Union (McGregor, 2016).
Economic Factors
Brexit led to the sterling pound’s depreciation against the dollar which intensified financial turmoil across the region (Toplensky et al., 2016). At the wake of Brexit, London found itself under pressure as the Europe’s financial hub with majority of investors threatening to pull out their investments.
Although, Primark’s parent company stated that Brexit have created a lot of uncertainty in both business and financial markets across the region, it also brought few benefits such as translation benefits for Primark if the exchange rates remained constant during the trading period (McGregor, 2016).
Social Factors
The biggest social trends affecting the clothing line in UK are the increasing rate of obesity and ageing population. NHS (2015), notes that the UK is being referred as “fat man of Europe” since about averagely 5 out of 10 British peopl...