The fast fashion retail sector in the UK with reference to two value-fashion specialists, T.K. Maxx and Primark - Essay Example

The selected companies are T.K. Maxx and Primark, two value-fashion retailers that have larger presence in the UK. Both T.K. Maxx and Primark are held by larger holding companies, TJX Companies and Associated British Foods, respectively. The report begins by giving descriptions of these two companies, their target markets and profitability. To pace the report in context, we next evaluate the macro-environment using PESTEL (Political, Economic, Social, Technological, Environmental and Legal) approach.

After that, we look at the competitive environment using Porter’s five forces analysis. The report is then concluded with an analysis of the core strategies deployed by these two firms as well as the challenges that emanate. 2.0. Company descriptions 2.1. Primark Primark Stores Limited is a retailer of affordable fashion that has 232 stores as at December 10, 2011, in the United Kingdom and Ireland, Spain, Germany, Belgium, Portugal and the Netherlands (Primark, 2011). It is part of Associated British Foods (ABF), a diversified international food, ingredients and retail group.

Primark contributed 28% of ABF’s total group revenue in 2011 which was 13% greater than 2010s figures (Associated British Foods, 2011). In 2010 Primark was UK’s largest clothing retailer with sales of ?3,043m, closely followed by ASDA and Marks & Spencer (Shields, 2010). The company sources its apparel mainly from manufacturing units in China, India, Turkey and Bangladesh, but also sources from other countries as well. Its target market is the fashion-conscious under 35s and its positioning is to offer the best value on the high street.

Primark sells a range of fashion items that includes. This report seeks to compare the strategy of two retailers with a UK presence competing in the same market sector and segment. The selected companies are T.K. Maxx and Primark, two value-fashion retailers that have larger presence in the UK. Both T.K. Maxx and Primark are held by larger holding companies, TJX Companies and Associated British Foods, respectively. The report begins by giving descriptions of these two companies, their target markets and profitability.

To pace the report in context, we next evaluate the macro-environment using PESTEL approach. After that, we look at the competitive environment using Porter’s five forces analysis. The report is then concluded with an analysis of the core strategies deployed by these two firms as well as the challenges that emanate. The fast fashion industry has been turned on its head by the emergence of value-retailers such as Primark and T.K. Maxx. Primark has utilized its lean and efficient supply chain, limited operation costs and store location and size to create its competitive advantage in the sector.

On the other hand, T.K. Maxx has exploited the strategies of opportunistic buying, pricing and flexible business model as its competitive advantage. Neither company has fully exploited online retailing as an alternative business model despite its steady growth in the UK. Also, the companies are overly reliant on the UK market for bulk of their sales and profits whereas they could exploit the larger European Union to increase their profitability.