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unit 5 - BTEC business (Primark and Apple)
- Module
- International Business
- Institution
- PEARSON (PEARSON)
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Report - Assignment 1 (Why trade internationally?)Unit 5 - International business
(Primark and Apple)
Introduction to the assignment:
In this assignment I’ll be exploring international businesses. The question that I have to reflect
on is “why trade internationally?” I am going to be focusing on Primark and Apple for this
assignment. I will be exploring why two businesses operate in contrasting international markets,
the types of finance available for international business, and the main features of globalisation
that affect two contrasting businesses and explore the role of trading blocs on international trade
for Primark and apple. Then I will be Analysing the support that is available to contrasting
businesses that operate internationally and also why the barriers to two contrasting businesses
operating internationally. Finally I will evaluate the impact of globalisation on Primark.
P1 - Explain why two businesses operate in contrasting international markets.
Primark’s history1:
Primark is a fast fashion store based in Dublin, Ireland, and is a part of ABF, a British food
manufacturing and retail firm. Penneys is the name of the firm in the Republic of Ireland, where
it was founded. Because it is owned by American retailer J.C. Penney, the Penneys brand is not
used outside of Ireland. The firm operates in both Europe and the United States.
Apple’s history2:
Apple Computers, Inc. was founded on April 1, 1976, by college dropouts Steve Jobs and Steve
Wozniak, who brought with them a goal of altering people's perceptions of computers to the new
business. Jobs and Wozniak intended to build computers that could be used in people's homes
or offices.
Market share for Primark3:
Primark's proportion of the UK apparel market has expanded dramatically since 2007, rising
from 4.1 percent in 2007 to 7.1 percent in 2018. This was a good growth for the company in
terms of improvements, making the company better, and acquiring a larger market share.
Primark also has a far larger share of the value clothing market, placing second only to Asda
with a 13.5 percent market share. Women's apparel is the most popular category among
Primark's clothing offerings, with 11.9 million customers in 2019.
Market share for Apple4:
1 Wikipedia.org, History of Primark
https://en.wikipedia.org/wiki/Primark
2 Google.com, Apple’s history
Apple's history
3 Google.com, What is Primark’s market share
Primark's market share
4 Google.com, Apple’s market share
Apple's market share
,Market share of Apple iOS mobile devices in the United Kingdom (UK) from 2011 to 2021. In
September 2021, iOS, Apple's operating system, has a total market share of 51.62 percent in
the United Kingdom (UK). However, as of December 2020, Apple had a market share of more
than 50% in the UK, while Android had 48.95 percent of the whole market.
Primark’s sector/industry5:
Primark sells attractive clothing to clients in over 238 locations around Europe and the United
Kingdom. It is a for-profit firm that operates in the private sector. This retail company is well-
known throughout the world and has a high brand value.
Apple’s sector/industry6:
Apple's business is in information technology. Apple is classified as a secondary, tertiary, and
quaternary industry. Apple manufactures its own stock and manufactures their goods and
services in factories where they are manufactured (secondary). Their items could be put to good
use, such as in school or at work.
Emerging markets7:
Emerging markets are countries that exhibit some features of developed markets but do not
meet the criteria for being classified as such. This includes the BRICS countries - Brazil, Russia,
India, China, and South Africa - which account for roughly 44 percent of the world's population,
implying that there is a large potential audience for a business to target. As real GDP in these
countries rises, UK businesses will be able to target them with highly differentiated products.
This is especially true in more affluent areas such as Shanghai and Moscow, which have a
higher proportion of wealthy people. Behind the BRICS are a slew of quickly developing
emerging economies.
Developing countries8:
Developed countries have high living standards and well-developed infrastructure. This makes it
easier to do business with them since improved transportation and communication infrastructure
cut costs and the time it takes to trade. Higher real GDP guarantees that individuals have the
purchasing capacity to purchase high-quality UK items; nonetheless, these marketplaces may
have well-established rivalry.
Less developed countries9:
5 Google.com, Primark’s sector/industry
Primark's sectors
6 Google.com, Apple's sector/industry
Apple's sector/industry
7 Investopedia.com, emerging markets definition
https://www.investopedia.com/terms/e/emergingmarketeconomy.asp
8 Wikipedia.org, Developing countries definition
https://en.wikipedia.org/wiki/Developing_country
9 Wikipedia.org, Less developed countries
https://en.wikipedia.org/wiki/Least_developed_countries
, Less developed countries (LDCs) are viewed as a source of low-cost production due to reduced
raw material and labour prices. This offers them a competitive advantage in the market since
they can implement a cost-cutting strategy. Lowering production costs helps businesses to
lower prices or boost added value.
How the two different businesses operations:
Primark's aims and objectives10:
Adored by fashion fans for 50 years, our aim is “to bring affordable fashion to everyone
around the world.” We offer a wide range of products, stocking everything from baby to
menswear, home to womenswear.
Primark's aim is to send the message that just because their products are inexpensive does not
mean they are of poor quality or unfit for use. Primark achieves this goal by having its items
quality-checked before they are sold to the general public. Another goal of Primark is for
employees to be friendly and helpful to customers so that they feel welcome, comfortable, and
safe in a Primark store.
Apple’s aims and objectives11 12:
Apple has repeatedly said, “Our objective is “to make great products and services that
enrich people's lives.” and to provide an unparalleled customer experience so that our users
are highly satisfied, loyal, and engaged.
Apple's mission is “to bring the best user experience to its customers through its
innovative hardware, software, and services.” And in a manifesto dated 2009 Tim Cook set
the vision specified as “We believe that we are on the face of the earth to make great products
and that's not changing.”
Primark’s target audience13:
Customers under the age of 35 who are fashion aware were the target audience for Primark.
Primark's approach is regarded as value for money since it sells items at extremely low rates
while maintaining a decent level of quality. It does not like to market its products to any and all
demographics; instead, it focuses on the 18-30 year old demographic. The customer evaluation
is now complete.
While in-store consumers may differ significantly, Primark's social audience is predominantly
female and spans the ages of 17 to 24 (depending on platform). Of course, the establishment of
the Primark MAN division might be an attempt to beef up the company's male offering.
10 Google.com, Primark's aims and objectives
Primark's aims and objectives
11 Google.com, Apple's aims and objectives
Apple's aims and objectives
12 Fourweekmba.com, Gennaro Cuofano, Apple’s mission statement
https://fourweekmba.com/apple-mission-statement-vision-statement/
13 Influencerintelligence.com, Dale Barnett, Primark’s customer demographic
https://www.influencerintelligence.com/blog/H4/what-we-know-about-primarks-talent-strategy
, Apple’s target audience14:
Apple's target demographic was made up of 64% men and 36% women, with a strong emphasis
on consumers aged 25 to 44. (55 percent of all posts were targeted at this age group).
In comparison, the most current Apple Watch Series 4 commercials target 43 percent males
and 57 percent women (a substantial change), and are more evenly distributed across all
demographics, with a considerable rise in attention on ages 44 to 54.
Primark’s market structure15:
Primark is positioned in the general retailing market's Lower Middle/Value segment, with an
emphasis on Family Safe apparel. Primark caters to the fashion-conscious under 35s by
offering affordable fashion essentials.
Apple’s market structure16:
Apple is an oligopoly, or oligopolistic market, in which a small number of manufacturers or
sellers share a market. In the rivalry of smartphone brand announcements, Apple maintains an
oligopoly market structure, while in branded PCs, Apple is recognised as monopolistic
competition. Monopolistic competition occurs when a large number of vendors provide highly
differentiated goods. Monopolistic competition is sometimes referred to as monopolistic rivalry.
The demand-side monopolistic rivalry appears to be parallel and peer to the supply-side
monopolistic competition.
P1/P2:Three key reasons each conducts business internationally:
International trade is also known as import and export trade since it involves the exchange of
goods and services across national borders. International commerce has a direct impact on
GDP, which is critical for many countries because it can change the country's economic
structure and enhance fiscal revenue.
Primark’s reasons:
Reason one - Opening up multinational enterprise
Primark's strategy of expanding into global areas with significant growth potential has proven to
be successful in the past. Prioritizing this over domestic expansion will be critical for the
company's future success.
Primark made its first venture into continental Europe in 2006, when it established a store in
Madrid, signalling its desire to leave a global impact. Primark opened stores in the Netherlands,
Portugal, Germany, and Belgium in 2008 and 2009 to capitalise on these nations' booming
clothing retail marketplaces. Since then, the company has expanded its global network, and it
now has 360 outlets in 12 countries. According to the company's 2019 annual report, sales in
14 Blog.brandtotal.com, Brandtotal, September 17, 2018, Apple’s target audience
https://blog.brandtotal.com/apple-now-sells-an-ecg-monitor.-how-will-that-affect-their-marketing
15 Slidesshare.com, Salim Azad, October 28th. 2013, Primark’s market structure
https://www.slideshare.net/selimjigsaw121/primarkoverview
16 Ukessays.com, 10th Aug 2021, Market Structure of Apple
https://www.ukessays.com/essays/economics/market-structure-of-competitive.php
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