Organisation and Management – Assignment 1
This report is based on the case study titled “Thanks…Penneys”, which was written by a team of BESS students as part of their final year assignment in 2014.
1. Assess the attractiveness of the US market for Penneys, using PESTEL & Five Forces analyses.
These are some of the influences that would make the US market attractive for Penneys.
PESTEL Analysis
Political
When the Rana Plaza disaster happened on 24 April 2013, not only did Penneys provide short-term relief, but they also quickly agreed to discuss long-term compensation arrangements. Indeed they were one of very few firms to meet with NGOs and government officials to discuss improvement for Bangladeshi workers in the aftermath of the disaster. …show more content…
Their recent expansion policy has greatly contributed to this success by meeting customer needs.
Primark’s low cost offerings are in line with current American consumer demand. BCG Consumer Sentiment Barometer Spring 2011 shows that American consumers spending is trending towards seeking value for money and saving,
Surveys have revealed that 42% of Americans have penalised firms that engage in unethical behaviour. Primark’s CSR policies will need to be perceived as credible if they want to succeed in America.
Technological
Primark’s low-cost model means they refuse to spend on an online sales platform. They do not even play music in their stores in an effort to keep costs down.
They have recently launched ‘Primania’, an online forum which allows customers to show off their Primark style. The site receives over 30,000 visits a week, providing the brand with another low cost method of reaching its customers.
However, Boston is a university town and, so their social media, and word-of-mouth strategy may work effectively there. …show more content…
Bargaining power of customers
The bargaining power of customers is low as there was “such enthusiasm for their products that more people showed up for their Oxford Street opening than for Topshop’s well promoted Kate Moss collection, with the model herself standing in the window”. (“Thanks…Penneys”, 2014)
European customers have flocked to their stores, Penneys seems to be meeting an unmet need as consumers seek fashion within constrained budgets. This seemingly insatiable demand is shaping the sourcing and practices of the firm as they seek to win in a competitive marketplace.
As Primark are opening 10 stores in a corridor between Boston and Baltimore, in this region there are strong cultural links to Britain and Ireland, and tastes are more European
Bargaining power of suppliers
The bargaining power of suppliers is also relatively low as when Primark withdrew contracts from the firm that offended them, thousands of workers were left without employment.
Workers, they claimed, continued to work exhausting shifts for little
This report is based on the case study titled “Thanks…Penneys”, which was written by a team of BESS students as part of their final year assignment in 2014.
1. Assess the attractiveness of the US market for Penneys, using PESTEL & Five Forces analyses.
These are some of the influences that would make the US market attractive for Penneys.
PESTEL Analysis
Political
When the Rana Plaza disaster happened on 24 April 2013, not only did Penneys provide short-term relief, but they also quickly agreed to discuss long-term compensation arrangements. Indeed they were one of very few firms to meet with NGOs and government officials to discuss improvement for Bangladeshi workers in the aftermath of the disaster. …show more content…
Their recent expansion policy has greatly contributed to this success by meeting customer needs.
Primark’s low cost offerings are in line with current American consumer demand. BCG Consumer Sentiment Barometer Spring 2011 shows that American consumers spending is trending towards seeking value for money and saving,
Surveys have revealed that 42% of Americans have penalised firms that engage in unethical behaviour. Primark’s CSR policies will need to be perceived as credible if they want to succeed in America.
Technological
Primark’s low-cost model means they refuse to spend on an online sales platform. They do not even play music in their stores in an effort to keep costs down.
They have recently launched ‘Primania’, an online forum which allows customers to show off their Primark style. The site receives over 30,000 visits a week, providing the brand with another low cost method of reaching its customers.
However, Boston is a university town and, so their social media, and word-of-mouth strategy may work effectively there. …show more content…
Bargaining power of customers
The bargaining power of customers is low as there was “such enthusiasm for their products that more people showed up for their Oxford Street opening than for Topshop’s well promoted Kate Moss collection, with the model herself standing in the window”. (“Thanks…Penneys”, 2014)
European customers have flocked to their stores, Penneys seems to be meeting an unmet need as consumers seek fashion within constrained budgets. This seemingly insatiable demand is shaping the sourcing and practices of the firm as they seek to win in a competitive marketplace.
As Primark are opening 10 stores in a corridor between Boston and Baltimore, in this region there are strong cultural links to Britain and Ireland, and tastes are more European
Bargaining power of suppliers
The bargaining power of suppliers is also relatively low as when Primark withdrew contracts from the firm that offended them, thousands of workers were left without employment.
Workers, they claimed, continued to work exhausting shifts for little