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CASE STUDY

P is for Primark

The expansion of Primark over the last 20 years provides an excellent example of a cost-leadership strategy

Primark’s business model is based on offering a wide range of fast fashion items at very low cost with very small profit margins. The low prices are achieved through establishing significant economies of scale, and while the firm makes low margins, the sheer volume of sales it enjoys means that in 2020 it enjoyed profits of £350 million on sales of £5.87 billion, an operating profit margin of 6%.

Primark is an Irish clothing retailer that operates under the name Penneys in Ireland, and Primark elsewhere. This is due to the fact that American company J.C. Penneys has the right to use the name throughout the USA and Europe.

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