Primark Supplying Consumers With Ethically Sourced Garments - Essay Example

Primark Supplying Consumers With Ethically Sourced Garments Table of Contents Introduction 2 Company Profile 2 Products or Services Provided By Primark 2 Report Background: Protecting Consumer Ethics 3 Discussion 4 Primark’s Ethics 4 Garments for Consumers 4 Primark Sales Set To Boost Performance at AB Foods 8 Rana Plaza Collapse: Primark Extends Payments to Victims 8 Primark Linked To UK Sweatshops 9 Conclusions and Recommendations 9 Reflection 10 References 11 Introduction Company Profile Primark is one of the most popular companies engaged in manufacturing as well as supplying garments. Primark is an Irish clothing retailer. The retail business has been in operation since 1969, it was named as ‘Penneys’ that still exists in Ireland. Primark has more than 270 garment branches all over the world and has been successfully operating its business (Primark Stores Limited, 2015). Products or Services Provided By Primark Figure 1: Demands for the Products of Primark Source: (Statista, 2015) The above graphical representation indicates increase in demand for ladies as well as men attire. This turn indicates the fact that low price garment are likely to have huge demand among the customers. Primark produces wide ranges of products comprising of various sub brands such as Early days, Rebel, YD, Atmosphere, Ocean club, Love to lounge, OPIA, No secret, Denim Co., Cedar Wood State. Additionally, Primark also manufactures accessories, clothing’s, footwears and other essential consumer items with respect to the needs of men, women as well as children. Furthermore, Primark produces different varieties of home and beauty products as per the needs of customers. Primark thus operates as a branch of “Associated British Foods” that has enabled expansion of its business with respect to food items as well as development of its retail group (Primark Stores Limited, 2015). Report Background: Protecting Consumer Ethics The improvement in technology has increased the demand for products and that on turn has raised the importance of supplying ethically sourced garments. On the other hand, buying behavior of consumers tend to affect the growth as well as profitability of supplying organizations in the long run. The organization claims to be ethical by producing low cost products in underdeveloped countries with the aim of serving the low income groups (Mandal, 2010). In this context, the paper examines the case of Primark involved in supplying ethically sourced garments in under developed countries to the respective customers. This report also describes how Primark can help its customers to choose products as per their ethical requirements by spending less. Primark also bear responsibilities towards the nature and natural resources existing within. The report’s objective is therefore to define Primark’s manufacturing process and reflect the way it can affect the underdeveloped countries while producing low cost products. Discussion Primark’s Ethics Business ethics can be defined as the core principals and rules as well as regulations required to be followed by businesses, considering the demands of consumers. In the ethical context, Primark has developed principals and rules that in turn has enhanced its social responsibility and has proven to be effective for its success in attaining the determined organizational goals. Additionally, the organization assists women who are economically unstable by providing them with healthcare services and arrange facilities to educate them to create their identity (Primark Stores Limited, 2015). The organization has also remained involved in various activities associated with NGOs and other organizations to create a new concept of ethical trading. (Primark Stores Limited, 2015). Garments for Consumers The increase in population has also resulted growth in demand for products. The company faced a decline in its sales percentage and failed to attract the customers in underdeveloped countries. They failed to provide goods as per the customers demand. Moreover, the product price was high which in turn has a negative impact on the sales percentage of Primark. Demands of the products in under developed countries depend on variables such as income, choice and cultural behavior of consumer, perception about the value of the products and among others. In the context of increasing demand for products, Primark has to follow the strategy for developing garments with respect to the needs of its customers (Ajmera & Reddy, 2014). In addition to this, to increase the export of garment in other countries Primark tends to import raw materials in bulk from other countries at a low rate to produce various ranges of affordable garments. In order to maintain equilibrium in supply and demand of the products, Primark has to coordinate its products according to customers demand. To meet the excessive demand the company should increase its product supply. By checking the products price, production cost and other factors related to production, company has the potential to increase its supply that in turn is likely to control excessive demand or supply and balance the market situations. Figure 2: Basic Supply and Demand Source: (WhiteNova, 2001) The above figure indicates the fact that both demand and supply for products has to be maintained in order to achieve initial market equilibrium. Moreover, equilibrium price and quantity as to be regulated in order to maintain stability in market demand for low priced garments. The organization also aims to produce low cost products so that people residing in under developed countries are able to consume wide varieties of products according to their requirements (Ajmera & Reddy, 2014). In order to satisfy the needs of under developed countries, Primark manufactures garments using fabrics from local areas of its operations as well as ensures production of fashionable garments at low cost to satisfy the needs of low income groups. The promotional activities of Primark are low cost and more effort is rendered towards producing low range of products with the aim of protecting consumers’ ethics (Ajmera & Reddy, 2014). Primark claims to be ethical, as it ensures that the manufacturing process is carried in a safe environment using hygienic materials and without disturbing the environment or the human rights. Additionally, the products developed by the concerned organization can be recycled that in turn shall ensure environmental protection. Contextually, ethical sourcing signifies the reliability of the product sources and its durability, so that consumers are able to utilize products to meets their key needs (Business Case Studies, 2015). Figure 3: Operating Process at Primark Source: (Business Case Studies, 2015) Primark has thus accelerated its manufacturing process for producing the garments, with sufficient demands across the world. In the context of underdeveloped economies, Primark also ensures an effective use of the local human resources to minimize its production cost and supply low cost garments as well as other products. The organization also claims to provide employment opportunities likely to be beneficial for underdeveloped countries, as it ensures increase in income and enhancement in their lifestyle (Sloman, 2004). However, to satisfy this purpose, Primark has to pay low wages or salaries to its employees that in turn shall violate the employment laws and the rights of the employees. Therefore, ethical sourcing of products is likely to impose a positive impact on the growth and development of underdeveloped countries (Sloman, 2004). In order to encourage the employees, Primark should plan for incentive schemes that are likely to boost up the performance of the employees as well as enhance the overall growth of company in long run. The organization thus intends to ensure selection of suppliers on the basis of their ability to supply quality raw materials so as to satisfy the purpose of ethically sourced garments (Arnold, 2009). Additionally, the organization also prevents employment of child labor and maintains other lab our laws, providing a safe work environment where employees can share their views or ideas with the management to obtain a quick response regarding any issue (Arnold, 2009). The organization provides training to employees with respect to ethical grounds that in turn results in the creation of internal environmental programs, proving effective to improve internal growth. Primark, with its research and development programs, have also enhanced its product design and quality to retain its customer in the long run. Proper human resource management policies have also assisted the organization to identify needs, behaviors and perceptions of consumers with respect to its product so as to ensure quality supply with minimum defects. Critically evaluating its performances and strategies, it can be asserted that Primark understands the value of the consumers (Gilmore & Williams, 2012). Primark Sales Set To Boost Performance at AB Foods In its recent performance, Primark has experienced a growth in sales and has proved supporting for Associated British Foods (ABF) to maximize its profit percentage in the financial period. According to BBC ABF’s, sales growth has increased by 4.5% in 2014 that in turn has resulted with growth in food business as well as has influenced the demand of the products substantially (BBC, 2015). Hence accordingly, the price of ABF’s share increased in 2014 where the sugar section of the organization attained a low profit throughout the year, as the price for sugar had reduced in China as well as in Europe. To cover the sales in the overseas area ABF had to spend huge amount, which in turn imposed a negative impact on the growth of its business. In such a case, Primark has proved to be helpful for ABF to overcome the financial issues by performing best and providing a wide range of products, which increased its sales percentage accordingly. In order to raise the demand, Primark requires to improve its price mechanism which imposes an impact on the perceptions of buyers and sellers. If the products price is low then it will increase the demands of products in underdeveloped country (BBC, 2015). Rana Plaza Collapse: Primark Extends Payments to Victims In 2013, Rana Plaza in Bangladesh collapsed, with more than 1000 employees were dead and 2500 employees are injured in the Rana Plaza incident. when Primark extended its supporting system for the victims and their families by providing financial reimbursements and other services to overcome the effects of the disaster, while many other international companies withdrew from taking adequate responsibilities in the event (BBC, 2015). Apparently, the disaster raised substantial awareness amid the people of Bangladesh with respect to the working environment (BBC, 2015). Primark Linked To UK Sweatshops An article presented in BBC news signifies that Primark claimed to work on the basis of ethical grounds, while on the other hand, the organization forced its workers illegally to work in adverse situations for more than 12 hours and 7 days in a week. According to the employment law, it is recommended that the worker should get Rs. 5.73 for an hour, while in the case of Primark, the employers were being paid less that in turn indicated the violation of its ethical rules (Dhariwal, 2009). Additionally, the article also reveals the fact that the organization does not facilitate proper working conditions to the employees, which in turn is likely to affect their health. On the other hand, it has been further argued that the organization is also involved in following illegal recruitment process as well as ignoring facilities with respect to immigrant workers (Dhariwal, 2009). Conclusions and Recommendations Primark should ensure transparency in its business process so that consumers are aware of its products as well as about its ethical sourcing strategies. The organization should also be continuously involved in the process of developing improved strategies to support employee’s rights as well as consumer ethics. It is therefore essential for Primark to plan effective and accurate strategies to develop a favorable condition for the employees in the factories and solve the problems related to employee’s rights. The government can therefore introduce new laws to protect the employee’s rights and employees should not be encouraged to working for more than the time limit. The government should also implement laws that charges fine for avoiding the ethical rules and rights in terms of business. In the context of globalization, Primark should therefore enhance its workability and expand its business globally with the help of advanced technologies and improving communication channels. Reflection Primark is apparently trying its best to provide consumers with low cost products, although it has failed to source the garments ethically, as the scandals were circulating all over. This might impose a negative impact on the consumer’s perceptions about the product source. This report presents the facts on the basis of research comprising of BBC News articles, related websites and Primark’s official website to gather relevant data with respect to the research topic. As I could observe, Primark has been running successfully all over the world, but it has to work on marketing strategies, and resolve ethical issues as it shall impose a negative impact on the economic situation of countries. To assure the value of the provided products and to keep its promises when serving with better quality products on ethical grounds across the world, Primark should cross check its production process and employee’s attitude to serve quality products. References Ajmera, S. & Reddy, N. K., 2014. Ethics, Integrity and Aptitude. McGraw-Hill Education. Arnold, C., 2009. Ethical Marketing and the New Consumer. John Wiley & Sons. BBC, 2015. Primark Sales Set To Boost Performance At AB Foods. Business. [Online] Available at: http://www.bbc.com/news/business-29106352 [Accessed May 17, 2015]. BBC, 2015. Rana Plaza Collapse: Primark Extends Payments To Victims. Business. [Online] Available at: http://www.bbc.com/news/business-24646942 [Accessed May 17, 2015]. Business Case Studies, 2015. Providing Consumers with Ethically Sourced Garments. A Primark Case Study. [Online] Available at: http://businesscasestudies.co.uk/primark/providing-consumers-with-ethically-sourced-garments/ethics-in-practice.html#axzz3aHl2ePlE [Accessed May 17, 2015]. Dhariwal, N., 2009. Primark Linked to UK Sweatshops. BBC News. [Online] Available at: http://news.bbc.co.uk/2/hi/uk/7824291.stm [Accessed May 17, 2015]. Gilmore, S. & Williams, S., 2012. Human Resource Management. Oxford University Press. Mandal, S. K., 2010. Ethics in Business & Corp Governance. Tata McGraw-Hill Education. Primark Stores Limited, 2015. About Us. Primark [Online] Available at: http://www.primark.com/en/about-us/about-primark [Accessed May 17, 2015]. Primark Stores Limited, 2015. Our Ethics. Primark. [Online] Available at: http://www.primark.com/en/our-ethics [Accessed May 17, 2015]. Primark Stores Limited, 2015. Product. Primark. [Online] Available at: http://www.primark.com/en/products [Accessed May 17, 2015]. Sloman, J., 2004. Economics for Business. Pearson Education India. Statista, 2015. Primark Products Ranked By Number of Consumers In The United Kingdom (UK) In 2013, By Clothing Product Category. The Statistics Portal. [Online] Available at: http://www.statista.com/statistics/312975/primark-products-purchased-uk-by-clothing-product-type/ [Accessed May 23, 2015]. WhiteNova, 2001. Changes in Supply, Demand and Market Equilibrium. Think Economics. [Online] Available at: http://www.whitenova.com/thinkEconomics/supply.html [Accessed May 23, 2015]. Read More