To what extent do the long term sales of a company, such as Primark, revolve around international trading ?

Perhaps one of the greatest reasons to suggest that Primark's long term success depends on trading internationally, is due to the fact that it allows the company to reach a wider scope of customers. Therefore, this would lead to an increase in revenues due to the fact that Primark would be reaching a wider audience of customers. Furthermore, it would allow them to spread risks because of the fact that they are operating in more than one market. Hence, if the UK market were to stagnate, then their global sales will not be affected, nor would revenue. Hence, by undergoing what Ansoff called 'Market Development', it enables Primark to operate in more then one market, without having to change their product portfolio. While there are risks involved in entering a new market, due to the difference in consumer demands and tastes, with enough market research Primark should be able to successfully improve long term sales.
However, a reason to suggest that the long term success of Primark does not revolve around international trading is due to the fact that Primark may chose to grow and specialise in the UK market. By specialising in one market, Primark would gain a stronger understanding of the UK market and therefore gain a competitive advantage over rival brands such as ZARA and GAP. Hence, by selling high in demand clothing tastes, it would enable Primark to generate large amounts of sales, because they are successfully identifying and satisfying their consumer's demands. Moreover, Ansoff's Matrix highlights the risks of trading internationally, implying that their is a large risk that international trading may negatively affect their sales. For example, the failure of Tesco's to trade in America, which resulted in a loss of £250 million per annum, is an example of how international trading is not the key to long term success.

Related Business Studies A Level answers

All answers ▸

Evaluate the various methods of financing business


What is break even and why is it used?


Explain the advantages of being a franchisee


What is a PESTLE analysis and when are they used?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo
Cookie Preferences