International Business Penetration Of Primark In Greece: Market Analysis And Country Assessment

• Based on your analysis, provide your recommendation.
• If your company were to decide to enter (regardless of your recommendation), provide an appropriate entry strategy, and give your reasons for this strategy.
• Describe the political, economic, legal, and cultural environment of the country in which you would be entering and the critical operational factors that you must consider and how they will affect your company. What are the primary risks? How would you mitigate these risks? Are the potential benefits of the expansion worth accepting such risks?
• Provide a cultural profile of the local area in which you will be operating.
• Describe the kinds of leadership and motivational systems you think would be most effective in this environment. Give your rationale.
• Discuss relevant strategies that might enhance negotiations with government officials and potential partners in the target country.
• Discuss the kinds of communication problems your managers might face in the host-country working environment. How should they prepare for and deal with them?
• Identify the concerns of the host country and the local community regarding your operations there. What plans do you have to deal with their concerns and to ensure a long-term cooperative relationship?
• Discuss relevant sustainability issues that informed your decision.

In case of international business expansion, the marketing strategy of an organisation is always important. It provides enough chances for the business to expand their territory and make a mark in other countries. The substantial importance of business market and position in other countries is important for the entering company, as they have to know the possibilities of carrying out good business in this nation. There are so many factors involved in marketing analysis and also in forecasting the revenue generation process that might help the company to expand their business.

In this report, the chosen company is Primark and they want to penetrate the market in Greece. So the matter of concern in carrying out this procedure is associated with the problem, situations and possibilities that the company might face in this new business market (Primark.com 2018). In case of, measure in the effectiveness of business, innovation and technology needs to be used by the company so that product qualities are quite good and manages to interest people into having those.

Primark is a food-to-fashion conglomerate group that was founded by Arthur Ryan in 1969 in Ireland. The main focus of the brand is to deliver chic clothing and provide respect to the concept of value for the money. The company is the second largest clothing retailer in UK and they are currently operating in most parts of the European market (Primark.com 2018). The company serves Australia, Belgium, Germany, Italy, Portugal, Netherland, UK and the US and many more countries along with the parental country, however, they need to change their business structure for the establishment of the market position in each nation.

The company is a part of the retail sector, along with the food sector, being operated by AB Foods. The main function of the company is to have a good market share for their food products. Low price value and great quality products are the main aspects of the company. In the British retail industry, they are a major force. They are completely engaged in producing the design or fabric work that is the main essence of their quality and product development in a different market (Morgan, Katsikeas and Vorhies 2012). Almost 12 countries are being served by the company by their basic products like clothing, cosmetics, and house wares. The company is also associated with British Foods, and almost in every country they have placed their business market and developed the nature of their business.

                                                               (Source: Primark education 2017)

In case of business expansion in an international market, the major changes that need to be focused on the company are having an extensive culture and making products aligned with that. More focus on the business tradition and international market environment is also related to having a business planning. So a good international market understanding is needed from the company.  

The political situation of the country is not stable. Especially in last seven years, the situation has changed in a radical way. From 2009, the country has carried out the five parliamentary Electoral processes in 2009, two times in 2012 and two times in 2015 as well. The result of this voting process has changed 7 prime ministers and 7 governments as well in which three were not in a temporary manner (Czinkota and Ronkainen 2013). The corruptness of many MP's and electoral financial crisis are the matter of matter for this country and the mistrust inside the political parties has underlined the section. Growing gap in the governmental decision-making processes also prevails in this country. As the electoral process goes on in a simultaneous manner, reformation of government projects or structures and the initiatives are not implemented in a proper way (Berthon et al. 2012). There are some continuous negotiations processes that are going on between the organisation and government and these processes help take decisions in the business. In case of retail business, retail industries remains consolidated in this economic turmoil. The merger and acquisition processes for other companies are large and the change has been noticed. However, the purchasing power of customers and quality product deliverance at the low price is an issue for the company and Primark has to think over it.

Company Description

More than 26% of the crude domestic product of the country has been lost in the five years between “2008-2013” (Data.oecd.org 2018). The growth of the nation has become stagnant as the investors are not investing a huge amount of money and neither are in-house companies coming up with the new projects that will help in business (Verbeke 2013). Thus a situation of economic debt rises in that process. The declining graph of an economic condition has been noticed as a downfall in the third quarter of 2015 and the bending percentage is 3.8% (Data.oecd.org 2018).  A downfall scenario is an issue for the nation and for that the company had to face certain challenges also. In a perspective of declining consumer expenditure and universal economic chaos, several aspects, which were recorded as precipitous declines in revenues, are being removed, or companies are going into tactical mergers and acquisitions in order to regulate and keep their places and endure the pressures of the depression.

The cultural ethics of the country is almost a modern element, and that helps in case of the cultural aspect of the company. Most of the people in this nation believe in traditional festivals, engagement and superstitions. These are the obstacles of their progression, and that will restrict them from being modern. Carnival, Clear Monday, Easter, The Ohi Day, The Evil Eye, Spitting, Black Cat - all these some irrational things that are believed by the people and that will impact their cultural understanding also (Czinkota and Ronkainen 2013). Some of the investors are interested in this nation as the people have changed their taste in last few years regarding their dress sense and that will impact the companies.

Greek has an active population and that is the reason in-depth margin earning is the issue for this nation. The rate of unemployment is 18% and it is assumed to be set at 25%, as the marking population and the improvement is the issue for the organization. Primark needs to maintain the product and price quality for that reason.  

Table 1: Demographical difference and their percentage

(Source: Witzig, Spencer and Galvin 2012)

Economically active sections of people are also noticed in this country. Still, in midst of political and economic turbulence, the process that will be taken by the company needs to be a right one so that people and their taste growth and sense of fashion will improve a lot and that somehow benefits the business.

Some of the technical aspects are evolving in this nation. Water technology, Mining and street, runway, different types of gears are there, and that showcases the development of technical aspects as well. Calliper, crane, tumbler rock all these instruments are a development of ancient Greece and their development since that very age (Arriaga et al. 2017). The significant possibilities of this process are also concerned with the recent change, and the technical advance met as well. In case of different considerable construction, and drainage variation system along with the adequacy of sanitary and purgatory facilities are the concern matter of this session. Though, in case of retail management, the situation of the existing companies is not suitable. In effect of the economic crisis, retail, real estate and pharmaceutical companies are considered loss their position and expelled their reputation from the business market.

Timeline of Primark

There are some major risks that can impact on the retail business of Primark.

• There is an unstable situation persisted in Greece in case of a political and economic section. Most of the companies are suffering from that situation also.
• In case of business expansion process and human right cases companies are not doing the right choice for their product improvement; however, the major problem is created by the political and economic scenario of the nation.
• Bribery and corruption of the government leaders are the concern issue of this matter and that restrict the business operation as well (Lee and Kwag 2017).
• There are some organised crimes have happened in this nation and most of the times governments are mere spectators for this case.
• There is some issue of terrorism threat as well and that attempted on the entire nation and most of the cases business, stakeholders and their associates are at the end of a suffering line.
• Protective security advice is not so impulsive in case of managing the business in a suitable manner. For this reason, most of the businesses are missing their right direction to establish in a right manner.

The nation needs to take some suitable actions to mitigate the process. The processes are sometimes harsh as they need to take decisions against the government. The government needs to be more protective and want to protect their surroundings so that terrorist attack or corruption will not attain in that case. Political and economic develop condition needs to be there and that will highlight the progression of the organisation.

There are some challenges that Primark may face in Greece but as per the construction of retail business and other small companies cannot make such business barrier for Primark. This is the most effective situation for the company also to establish their business and hold the market for long. German Chain of stores, Supermarkets in Greece, Hondos Centre, IANOS, Jumbo S.A. all these companies are not so efficient to beat the market of Primark and that is the reason for their business progression.

The first difference that comes, in this case, is the political aspect as Greece is the member of the general assembly of UN and UK is the permanent member of Security Council of UN. This is the significant difference that business can be based on, as the help from the political aspects in needed for the establishment of business (Schniederjans, Cao and Schniederjans 2013). The population is another factor in which the amount of resource depends on. In that aspect, UK has a larger population than Greece. In case of cultural perspective, as both, the countries are in Europe, and both have a substantial coastal line thus the company can supply their initial raw material from the use of coastal path. Both the countries have a temperate climate. Therefore standard clothing will be same in that case. Primark needs to take care of that and influence their market of supply line so that business presentation will be same in both the countries.

The entry mode of the company in Greece will be the strategic acquisition as the nation has an inorganic growth in business.  The successful churning out of fashionable clothes is the prime aspect of the business and that helps strategic analysis process and makes acquisition of a small company in Greece and makes their market in the nation.

As the country’s population is just more than one billion, a place that can access for all the people in different cities will be a better option for Primark. 131, 550 km² is the approximate area of the nation so a determination of the place and positional and distributional channel is the most effective factor in that case (Data.oecd.org 2018). Cradle of western civilisation, is there in the nation and that impacted over the business market also.

The company follows both the distribution channels like direct distribution and indirect distribution in case of wholesaling, manufacturing, and distribution in retail outlets. The distribution intensity is intensive and that will impacted over the company aligning process in Greece (Dijkmans, Kerkhof and Beukeboom 2015).

Country Analysis

The competition may arise in UK in for Primark as there are companies like TK MAX, Marks and Spenser, and George. But in case of Greece, the companies are literally few and that helps Primark to make their strong statement over the matter (Schaupp and Bélanger 2013). Hondos Centre, Jumbo, Kotsovolos are the top-ranked companies in Greece but as per the reputation carries by Primark, it is important for the company to make their mark on the country.   

Primark needs to take legal strategies to get into the Greece market. Cost leadership strategy can again implement the organisation as an economic condition of Greece is not so useful and that impacted on nation’s people as well. Quality products at low costs are the prime attraction of the company, and that will differentiate the company from others (Ukoha 2013). Customers have to pay a premium price for original products, but the numbers of those products are less in number. As Primark considers as a family brand, thus international marketing strategy for the entire family is persisted by the company. Product leadership is another strategy initiated by Primark to get a competitive advantage. The strategy determines the cost differentiation as some of the products are less in price from other companies, through this strategy Primark can have a competitive advantage.

Product is the most important marketing aspect of business development. Primark is known for their varying fashion trends in every alternate month. There are some products that have actually been introduced by the company in the initial stage and then marketed differently each time and with minor changes (Banks et al. 2016). Innovative and demographically attractive products are the main strength for the company, but the adaptation policy in needed to be adopted by the company so that they can manage their business in Greece.

Economic pricing is the best strategy to make way for in Greece, and as the country is not economically strong, premium pricing strategy is not applicable for the nation. Penetration pricing may be implemented in the initial stage of business but low-quality products with low price are not the right strategy to move on with in the long run (El-Badawy and Chahine 2017). Thus, Primark needs to deliver quality products if they have to stick to economy pricing for the Greece market. A clear adaptation policy is noticed in this case and to acquire a good share in Greece, Primark has to take this policy.

Generally, the popular areas of the city are the favourite place for companies. The outlet of Primark is not located in high road places, rather in case of the new place; cheaper areas are where the company wants to start their business (van Tonder and Roberts-Lombard 2013). The main reason behind this strategy is to engage lots of local people, who do not have much amount of money to buy expensive dresses but can be interested in the products of Primark. Adaptation strategy is the main strategy that can help here as the business market is different in case of every nation.

Low cost advertising is generally used by this company and most of the promotional aspects are used in WOMO and after that they have invested their money in TV commercial, ambient, general websites, event programs, discount coupons and different popular programs promotional aspects are used (Lochrie 2016). In case of Greece, website handling, radio, television advertisement, event promotions are the matter of concern in this case. So, adaptation is necessary in this scenario.

Political

In this case, local employees are important in the long run of the business. At the initial stage, expats employees may be considered the right choice as the company comes from a completely different place and tries to find the establishment. But in case of settling down the business trans-pat strategy needs to be followed by the management. In case of better management situation, and interaction with local customers, local employees are needed in the management and that is the reason Primark have to recruit some local employees at the beginning of their journey in the new market.

Situational leadership is the right way to continue the leadership process in Greece. As the economic and political condition is not stable, this form of leadership needs to be implemented. In any case, the leader will have to act as per the situation and make strategic changes whenever it is needed to save the company (Bolden 2016). Motivational factor is an important issue for the organization, and in that case, rewards, recognition, extra monetary benefits, work-life balance situation needs to be implemented for better motivation of employees and through this process, they will start to work harder to retain a good position in the company.

Inter-cultural communication is a huge aspect in business. If the language is not understandable by the employees of the organisation, then real misdirected situation will come up and conflict situation arises. Extra training and development process may be implemented by the organisation for the expats to know the language and its practical implementation (Banks et al. 2016). Local people will be there during the entire operation process and through the training non-verbal expressions and body language will help in understanding the language.  

Business ethics is important for the development of business and it is quite significant when a company enters another market. Some of the Greek etiquettes and ethics have to be maintained by the company as well and that will have an impact on their development as well (Morgan, Katsikeas and Vorhies 2012). This is the process where sustainable position of the company will be crucial for their reputation, and that is a huge strategic situation of the business.

Conclusion 

On a concluding note, the report majorly highlights the market penetration issue of an organisation, Primark. In this case, Primark needs to penetrate the market of Greece and that is the reason all the political, social, economic, cultural and technological aspects have been analysed in this report. The paper also evaluates the problems faced by the company in case of penetrating the Greece market and in that case, two major problems in the form of political and economic instability have come up, which may affect the business as well. Proper leadership strategy along with the strategic movement, market entry policy and operational mode are also highlighted in this paper so that better evaluation of the penetration country and the possibilities of Primark business expansion can be understood.

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