IT in Modern Business Operations

Introduction

In todays digitalise business world, information technology plays important roles in modernising overall business operation, strategic thinking and decision-making process. Though using information technology, marketers can grab high competitive advantage through representing the brand reputation in the international business platform and gaining high-value competitive position in the international market landscape. This study will discuss how the UK based fast-fashion retailer; Primark uses information technology in terms of grabbing high competitive advantage to deal with increasing rivalries in the international and domestic market. This study will also analyse the competitive environment for Primark by using Porter’s five forces model which will assist its marketers to analyse what strategies they marketers need to develop to grab high level of competitive advantage. This study will also discuss the value chain analysis of Primark to analyse the two support activities which will assist the marketers to improve their strategies to deal with ever-changing market trend. Finally, this study will summarise how information technology changes the way Primark operates its business to grab high competitive advantage

Background information:

Primark is the fast-fashion retailer which has headquartered in Dublin, Ireland. It is the subsidiary of the food processing company ABF. This company had been founded on 13 June 1969. Primark operates its business in 373 locations including Austria, France, Germany, Italy, Ireland, Slovenia and the United Kingdom. The [products of Primark include houseware, clothes and cosmetics. This company sells a diverse range of products including menswear, women wear, accessories, beauty products, confectionaries and footwear. During 2014, Primark sells Sephora products at reasonable price staring from £1. In addition to this, Primark also sells products of Zara and H&M, to assist customers to get trendy clothes and accessories. Primark has maintained the uniqueness of its products by offering high quality as well as products at an astonishingly low price which convinces the customer to invest in this brand. On the other hand, through selling high-quality products at lower prices, Primark offers fast-fashion stores which assist the customer to buy wide ranges of clothes and discard them after a few wears. When it comes to discussing the overall service of Primark, it can be stated that this company has maintained a trustworthy relation within its customers providing the quality service. The customer dealing service, sales service and after-sales service of this company are systematic and well-maintained which assist the customers to get convenient service at any point of their buying process. Apart from the selling and profit-making process, this company also invest in corporate social responsibility. Primark joined the ‘Ethical Trading Initiative’, through which it works on social exclusion and labour rights. Through setting and implementing strategies to solve the labour issues, this company work on improving the labour’s social, economic and financial, condition. On the other hand, through providing a donation to local NGOs, this company has performed its duties on improving the social and economic standard of the community people [www.primark.com, 2010].

Analyse the competitive environment of Primark:

Through using Porter's five forces model, it is possible to analyse the overall competitive environment of a firm (Kanakulya and Jinzhao, 2017). In case of analysing the overall competitive environment of Primark, Porter’s Five Forces Model is going to be used which will discuss the overall competitive environment of this company such as competition intensity, power of new entreats, burgeoning power of suppliers, bargaining power of customers and threats of the substitute products.

Porter’s five forces model for Primark

Threats of new entrants:

Primark has very little control over the entry of new retail companies in the UK market. The entry of the new entrants depends on the lenient policies and acts of the UK government which support the free exit and entry of new companies in this market. This is the reason why UK market becomes the preferable place for operating its business for overseas retail firms, which enhances the number of the market players in the UK retail market. According to (), if the company has very low control over the entry of new entrants, it faces high competitive threats of potential rivals in the market. For example, in the UK market, Primark will face strong competition threats from Iceland, Unique and next, which are potential retail firm in the UK market. On the contrary O'Hara et al. (2017) argued that threats of new entrants not only poses high-level competitive threats on a firm but also provides opportunities to the firm to develop its overall competitive advantage through improvising the overall policies and decision-making framework of the firm. Therefore in case of the Primark, marketers need to take the threats of new entrant into UK market as a good opportunity to represent its uniqueness and market potential in front of potential rivals in terms of enhancing its brand reputation as well as grabbing customer attention.

Bargaining power of supplier:

Burgeoning power of suppliers poses an important impact on the operation and decision-making process of a firm. According to Juliana and Nyoman (2019), high bargaining power of suppliers is considered to be detrimental to firm’s success, whereas the low bargaining power is considered to be effective for the overall development of the firm. In the case of Primark, it deals on the huge number of suppliers from local as well as international market through using the information technology to have high-quality raw material rather than stick to one supplier. Therefore it can be stated that the bargaining power of single supplier for Primark in the UK market is low, as there are many potential suppliers in this market which assist Primark to collect the quality goods at right time. Through using the online network process, Primark can connect to a large number of supplier's from any corner of the country. On the contrary, Huang (2019), argued that sometimes the firs face high cost of the raw material in local market which can raise the overall spending, in this context, Primark has intended to pose pressure on the local suppliers for reducing the price of raw material which is higher than that in the other countries.

Bargaining power of buyers:

Bargaining power of buyers is one of the important factors which impact on the operation, organisational policies and decision-making process of the organisation. In case of Primark, buyer’s power is high as there are many players in the UK markets such as Aldi, Iceland, Sainsbury, Morrison’s and Next, buyers have wide ranges of retail options to invest their money into the best brand. According to Moreno-Izquierdo et al. (2016), the introduction of information technology into business has assisted buyers to compare the price, quality and uniqueness of products before buying them. In the case of Primark, the marketers need to focus on enhancing the uniqueness and quality if each product which will convince the buyers to select this brand over the others. On the other hand, by using the inline network connection, Primark needs to make thorough research on the buying behaviour of customer which will assist them to make right strategies to grab customer’s attention.

Threats of substitute:

According to Nurlansa and Jati (2016), substitute product of a firm is referred as the product from the other industries or the other companies that will serve the same purpose as that if the firm’s products. If there are several substitutes in the market than customers can have wide ranges if the position to invest their money which will pose high threats on the marketers of the firm. In this context, Primark can manage the threats of substitute products low by selling high-quality products at astonishingly low price. Marketers of Primark sells products id famous brand such as Sephora, Zara and H&M, at a very low price for providing fast fashion opportunities to its customers. This is why customers chose Primark over the other potential brand such as Tesco, Aldi and Iceland. In this context, Primark marketers have used information technology to make a proper comparative analysis of different products sold by the other brand s such as Morrison, Next and Aldi. Using digital research on the overall market will assist the marketers of Primark to use more relevant strategies that will attract the buyers to choose this brand for meeting their fashion needs. Through this process, Primark can easily reduce the threats of substitute in the UK market.

Competition intensity:

As there are many potential retails companies in the UK market, the overall competition intensity in this market for Primark is very high. Next and Gap are two potential retailers who have grabbed most of the young population which pose the competitive threats on Primark in the UK market. According to Abalkhail (2019), if the market contains large numbers of market players that the competition is high for firms operating there. Moreover, Aldi, Sainsbury and Morrison are the potentials and trustworthy brands in the UK market which have millions of satisfied customers which will increase the overall competitive threats for the Primark marketers. On the other hand, the UK government has set free entry and exit for the new entrants in this market which has enhanced the overall market competition for Primark.

Analysis of inbound logistics, operation and outbound logistics:

Inbound logistics:

Inbound logistic is associated with procurement and material management which involves the delivery of the spare part and raw materials from the suppliers into the manufacturing unit (Bhatia, 2016). This process represents the flow of raw materials into the manufacturing units. In case marketers of Primark need to maintain a healthy relation with vendors and suppliers in terms of getting easy as well as timely delivery of the raw materials into the manufacturing unit and stores. In this context, information technology will assist the markets of Primark to maintain online connection with high skilled suppliers and vendors in local; and international places for receiving the best quality of products. According to Lincoln and Andrew (2018), in terms of maintaining proper inbound logistics, information technology is highly supportive which assist the firms to maintain quick and time-less communication with different vendors, suppliers and manufacturers. If Primark is unable to make a healthy relationship with suppliers it will face challenges in dealing with the product development process. In addition to this, the marketers of Primark will analyse the overall, flow of the raw material from the supplier to the manufacturing unit and its transformation to the final products. In the inbound logistics process, Primark will ensure that all the process such as receiving raw material, distribution of materials accordingly and start the production process, will be carried out systematically.

Operation:

Operation is the process through which raw materials are received, processed and transformed into final products. Primark needs to focus on maintaining systematic process operation such as packaging, machining, testing and assembling (Moreno-Izquierdo et al. 2016). In addition to this, marketers of Primark need to improve the service and manufacturing operation of the company. By analysing the operation activities, Primark can enhance the productivity and quality of the service. On the contrary, Juliana and Nyoman (2019) argued that firms not only analyse the manufacturing service operation but also they need to improve the transportation of raw material, storing operation, manual handling process and packaging of products. Through marinating proper balance between each operation task, Primark can enhance maximise the quality of their operating system which will assist the marketers to grab a high level of competitive advantages.

Outbound logistics:

Outbound logistics can be referred to as the activities that are associated with delivering the final products to customers (Nurlansa and Jati, 2016). This is one of the most important processes, in which companies need to ensure that customer will receive the products at the right time without any delay. Marketers of Primark will ensure that the entire process of outbound logistics will be performed in a systematic manner. Through using information technology, Primark can improve the overall analysis of its outbound logistic process, in which marketers can use the online track system to determine whether the systematic process of inbound logistics such as scheduling, transporting and order processing is performed in a well-organised manner. Through using the fast application program, staffs of Primark can keep an official record of total number and type of products that are ready to deliver to customers. Primark will analyse the different process of outbound logistics such as material handling, scheduling, warehousing, transporting, order processing and delivery of the product to its final destination. By performing the systematic process of outbound logistics, Primark will ensure customer satisfaction which will assist marketers to enhance their competitive advantage and growth opportunities. Through maintaining strong value chain activities, Primark can reduce the operational and manufacturing cost which assists this company to sell products at a reasonable price that improve the entire customer base.

Analyse two support activities in Porter's value chain model:

Firm Infrastructure:

According to Abalkhail (2019), firms activities is important to support activities which pose an important impact in operation, decision-making process and business strategies of firms. In terms of grabbing proper competitive advantages, Primark needs to improve the overall organisational infrastructure which will assist the marketers, staffs and managers to maintain the systematic framework in the workplace. For this, Primark needs to use the online connection to communicate with its staffs and managers working in different offices operating in different places to conduct meeting regarding the discussion that how they can improve their overall organisational infrastructure.

In this context, Primark will check the account, financing, legal matters, strategic management, planning and decision-making process which are associated with growth productivity and success of the company. Through installing many application program and software, technical staffs of Primark can improve the financing, accounting and legal matter handling process which will save the time and effort of the staffs of this company.

According to Bhatia (2016), through analysing the condition of organisational infrastructure, a company can set proper strategies key value-adding activities use to improve the infrastructure at a faster rate which will assist the company to deal with the ever-changing market. Through using proper leadership strategies and right management styles, Primark can improve the current infrastructure of this company. Through using information technology, marketers of Primark can conduct researches on other organisations to get information regarding their working styles, infrastructure and operational process. This research will assist Primark to use the strategies which will assist the marketers to make proper improvement into the infrastructure.

Human resource management:

Human resources management is an important supportive factor for any organisation which assists the company to have a highly-skilled workforce, which is necessary for maintaining sustainable productivity of the company (Lincoln and Andrew, 2018). By conducting strong human resource activities, Primark will be able to enhance the knowledge and skill of its workforce which will assist the staffs to deal with the ever-changing market trend. Moreover through improve the human resource process; Primark will be able to train its staffs and managers in terms of combating any issues in the domestic and international market. According to Bhargava et al. (2018), human resource is not only associated with hiring and recruiting eligible candidates but also it conducts the training and self-assessment program for staffs which assist the, to shape their professional skill and business knowledge. Information technology will help Primark to improve the human resource framework by recruiting the high skilled HR managers and HR staffs through an online interview. Moreover, through using email, website and video conference, HR managers of Primark can check performance, work process, the interaction between staffs and innovation in the daily work system which will assist this company to enhance the professional standard of the workforce.

Analysing the key value-adding activities with proper justification:

Value-added activities are the processes that are associated with increasing the economic values and profit of the organisation. Managing organisational policies which are one of the most important value-added activities will assist Primark to reform its old and existing organisational policies and transformed them into modern policies that will be relevant to the changing business landscape. According to Flanagan et al. (2018), information technology helps an organisation to reform their organisational policies by maintaining online research on the market trend. In this context, Primark will conduct online research on the overall market trend which will assist the marketers to make proper reformation in their organisational policies which will contribute to enhancing the organisational productivity.

Another important value-added activity that Primark is going to implement is capacity utilisation. Through this process, HR managers of Primark will analyse the overall strength and weakness of the workforce to understand that whether they can cope with the changing market and buying behaviour of customers. According to Al-Shammari and Al-Faqir (2017), capacity utilisation process will assist marketers to utilise the quality of staffs in the right manners which will contribute to organisational productivity. Primark will use workforce capacity to improve the overall infrastructure, through using the creative skills and innovative knowledge of the staffs, Primark sets effective strategies which will assist this company to represent strong competitive position in the domestic as well as in the international market. In addition to this, Primark uses professional capacity of staff to analyse the overall internal and external environment of this Company which will assist marketers to understand which strategies will suit with the current financial situation of this company.

Summarise the process of how business will deploy Information Technology:

From the above-mentioned discussion, it can be stated that Primark can use information technology in managing online connection with staffs managers and customers which will assist this company to eliminate the time and place barriers in interacting with them. According to da Silva Guabiroba et al. (2017), information technology plays important roles developing quick and effective communication process through using an online platform such as email, Facebook, video conferencing ad web chat. In this context, Primark can conduct online official meeting through using the webcam, in terms of arranging video conferencing. Marketers of Primark can conduct the online market research which will assist marketers to get huge information regarding the current market trend in the UK retail market as well as international market. Through using information technology, Primark has digitalised its transaction process which has assisted the account staffs to use digital payment cards such as debit cards and credit card to make all type of payments. In addition to this through using information technology, marketers of Primark can make online storage of personal and professional information of customers, staffs and stakeholders. On the contrary Koc and Bozdag (2017) argued that sometimes online storage of information have chances of getting data hacked by online hackers. for eliminating the chances of this happening marketer of Primark can use online password and security software which will protect the information in order it maintains the confidentiality of the information system.

Conclusion:

From the above discussion, it can be concluded that information technology is crucial in today’s business operation. Through using information technology, firms can maintain strong communication with stakeholders at any time which will assist the marketers to stay connected with them and discuss the official issues when needed. Through using Porter’s Five Forces Model, firms can analyse the competitive environment which will assist them, to understand their current competitive position. In this context, information technology will assist marketers to improve the competitive environment such as lowering bargaining power of customer and suppliers which will promote the sustainability of the organisation. Finally, it can be stated that, through using information technology, marketers can assist the organisation to set proper value chain activities and value-added activities which will assist the company to grab proper competitive advantage and strong customer base.

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