Business Environment Analysis of Primark


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In order to survive in the competitive environment, every business organization have to analyses various environmental components effectively. Business environment consist with two major parts that is internal and external environment. These two part largely influence the business activities and function of the corporation (Cai and Yang, 2014). In the external environment, various components are consisted such as political, legal, social economical, technological. On the other and in the internal environment, various internal components includes such as employees, customer, suppliers, investors etc. It is very important for business enterprise to analyze and assess the business environment because these mentioned factors largely affects the organization practices and function. In this project report, influence of various environmental components on the business has been critically discussed. Beside this, impact of fiscal and monetary policy with context of Primark has also studied in this report. Primark is a famous cloth retail corporation based in Ireland with most of the operation in UK. This company is a subsidiary of Associated British Foods and has its manufacturing sources from different countries. Various economic system and its importance in the various countries has addressed in the following report. The major objective of this project is to understand the impact of business environment on the organizational function and activities.


1.1 Identification of Various Types of Business and Their Objectives

Primark- Primark is a famous subsidiary corporation of the associated British foods group. Organization was launched in 1969 in Ireland trading as penny’s. by 2000, there were over 100 stores across Britain and Ireland. By 2012 Primark had 238 branches across the UK, Ireland and Europe. Primark has become distinctive for offering unbeatable value whilst never losing its innovative, fashion-driven edge. Primark is world famous brand because of its innovative product and reasonable prices (TEbert and, 2014). The leading products of this cloth retail corporation are clothes, shoes and home ware products. In order to produce innovative products and services, Primark uses resources from India, china, Bangladesh and Turkey and by this it provides employment opportunities to other countries. In addition to this, company effectively fulfills its responsibility toward society and impressive contribution toward corporate social responsibility. Cited venture have more than 68000 employees who are continuously providing their best efforts to attain the company objective and satisfying the needs of customers. The company sells clothes at the low cost end of the market below average prices. Along with retailers such as Zara and H&M, Primark contributes to the contemporary fast fashion trend.

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Public sector company- The public sector company concerned with rendering diverse range of governmental services. These types of corporations are generally controlled by the government and works for the society. The organization of the public sector can take several forms including direct administration funded through taxation and complete outsourcing with a privately owned corporation delivering the entire service on behalf of government. National health service is the best example of public sector company that is offer medical services to society and administrated by government.

Charity- A charitable organization I a kind of nonprofit organization which differs from other types of NPO’s. This type of organization is working for the common welfare of the society.

1.2 Description of the Extent to Which Primark Meets the Objectives of Its Different Stakeholders

For every business organization, Stakeholders play a very crucial role in order to attain desired objective. In the absence of stakeholders company cannot survive its business activities and function. They are those individuals who have interest in the business and they are always wanted to connect with company. Any changes in the policies, practices, strategies, action may largely affects the activities of stakeholder. In order to meet the objection, company has responsibility to share each information related to business share with stakeholder and maintain an effective relationship with them. In the context of Primark, there are various stakeholders such as employees, government, investors, suppliers and customers. Following are major obligation of Primark towards its stakeholders-

Employees-Employees are most important stakeholder for Primark because in the absence of them company cannot survive its business activities and functions. In every field of corporation like production, operation, marketing requires an skilled and talented personnel’s (Chow and,2012). In order to make business effective and successful, corporation requires to maintain an effective and healthy relationship with personnel’s. Primark have 68000 employees so it have responsibility to provide better working condition, develop effective policies and practices, pay salary and effective incentives and provide better welfare schemes so as they can motivate and encourage for higher performance and productivity. By this, employees may retain in the company for long time.

Customers-Customer are another important stakeholder for the Primark. Cited venture is a retail outlets so its success is largely depends upon the customer satisfaction. Customer requires an effective and high quality products from company so it is major responsibility of Primark is to deliver expected product and services to them. They also wants an innovative and creative products in a reasonable prices. Therefore, Primark have responsibility to develop such innovative product which can meet the need of customers.

Suppliers- Primark is a retail outlet which deals with consumer products like clothes, shoes, fashionable accessories etc (Waithaka and Ngugi, 2013). In order to produce such products and services, company requires an effective quality of raw material and semi finished goods. Suppliers are those people who supply raw material and semi finished good to corporation. They want timely payments and regular order from company. Primark have responsibility to maintain an effective and healthy relationship with them by make effective order and regular or timely payment. Besides this, in Bangladesh which is a supplier country for corporation, the company has launched a project according to which it attempts to pass positive changes in lives of human resources specially for women workers

Government- Government is another important and major stakeholder for the Primark. Company have to follow all rules, regulation, code of conducts, and legislation which have made by government in order to operate its business in the country. Primark have responsibility to fulfill all legal requirements and perform fair trade practices, fair competition in the country.

1.3 Explanation of the Responsibilities of Primark as an Organization

As per the above discussion it has been ascertained that there are various stakeholders and their important contribution toward business success. Each stakeholder are affected by the business decision and activities because all have interest towards business growth and outcomes. In order to gain effective success and result, Primark have responsibility to maintain healthy relationship with them and meet their expectations. There are various ways through which cited venture can meet its responsibility towards stakeholders. These ways are as follows-

Keep informed-This is the best way through which Primark can meet the expectation of government and customers. Primark have responsibility to always keep inform to government about company’s financial position and profitability. According to company revenue and turn over, it have to pay the tax to government (Grigor'ev and Suslova,2014). So corporation should always inform the fair and true information about the financial condition. Furthermore, company can maintain healthy relationship with government by fulfill all legal requirement and follows legislation. On the other hand, company requires to mountain healthy relationship with customer by provide accurate and relevant information about product prices, features and quality. Customer wants regular updates about the products and services so form should keep inform about the product prices, discount, offers, quality changes, distribution and features.

Manage closely- In this manner, company have responsibility to manage personnel’s by provide accurate information about company policies, practices, strategies and activities. Corporation should take participation of human resources in the business decision making process so as they can touch with the management and aware about the changes in the policies and practices (Asghar, 2013). In addition to this, company requires to develop such policies and practices which is suitable and favorable for personnel’s. Furthermore, by providing effective and attractive incentive policies, welfare schemes, company can able to encourage and motivate employees for higher productivity and performance.

Keep satisfy- In this manner, suppliers are important stakeholders who wants to satisfy always. Company can make satisfy them by make regular payment and make effective order to raw materials and semi finished goods. On the other hand Investor are that person who invest their capital in order to get return. Primark have major responsibility is to satisfy them by pay their return. Company can provide satisfaction to suppliers by provide reliable and accurate information about profitability and revenue.
As per the above discussion it has been asceratined that company have various roles and responsibility towrd various stakeholders.Porimark have also effective contribution towrd corporate social responsibility.In this manner, pruimark have effectoive contribuition to enhance the fenmale labour education.Company has made various arragenment to improve the female labour condition in the UK.This is its ethical desuicion which support to the economy in the UK.It organise training and development programns for female labour so as they can get the employement opportunities.

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2.1 Explanation About Different Economic System and Their Impact on the Countries

An economic system is a system of production, allocation of resources, distribution of goods and services within a society or a given geographical area. In other word it can be said that economic system includes the combination of the various institutions, agencies, entities, decision making processes and patterns of consumption that comprise the economic structure of a given community. As such, an economic system is a types of social system which includes three general questions that is what to produce, how to produce and in what quantities and who receives the output of production (Schneider and Schmidpeter, 2012). The study of economic system includes how these various agencies and institution is linked to one another, how information flows between them and the social relations within the system. Every country have their own economic system by which it sets its economic function and pricing policies. In the simple word it can be said that economic system are the means by which countries and government distributes resources and trade goods and services. They are used to control the fives components that is labor, capital, entrepreneur, physical resources, information resources. Generally, there are four type of economic system which is as follows-

Traditional economic system-Vast [portion of the world still function under a traditional economic system because under this produced products and service are direct result of their beliefs, customs, tradition, religions etc. These are tends to be rural, second or third word. In this economic system there have small populations of nomadic people and while their economies are certainly traditional, they often interact with other economies in order to sell, trade, barter etc (Kitzmueller and Shimshack, 2012). One of the most obvious advantage is that tradition and custom is preserved while it is virtually nonexistent in market. In the Cuba, there are traditional economic system through which each member has a more specific and pronounced role and these societies are often very close and socially satisfied.

Command economic system-In this manner large part of the economic system is controlled by a centralised power and often a federal government. This system develop when a country finds itself in possession of very large amount of valuable resources. In this system, government play a very crucial role because it have large interference in order to regulate resources (Lee and Saez, 2012). The major advantage of this economic system is that command economy is capable of creating a healthy supply of its own resources and it generally rewards its own people with affordable prices because it regulated by government. United kingdom have command economic system.

Market economic system- A market economy is very similar to a free market. In this economic system ,government have very less control over the economy or it can be said that government does not control vital resources, valuable goods or any other major segment of the economy.

Mixed economic system-This economic system is also known as the dual economic system because it is a combination of two economic system that is market and command economy.

2.2 Implication of Fiscal and Monetary Policies on the Different Business

Fiscal policy is means of government tax related policies. In other word it can be said that fiscal policy is that policy which is governed by the government in order to collect the revenue by charge taxation rate. It can be said that fiscal policy is the means by which government adjust its spending levels and tax rates to monitor and influence a nation’s economy. (Lee and Saez, 2012). Fiscal policy is based on the theories of British economist John Maynard Keynes. According to this stated that government can influence macroeconomic productivity levels by increasing or decreasing tax levels and public spending. At last it can be said that when government collects taxes from businesses and individuals, it leaves less money in their pockets for saving, spending and investment. This means that the more the government taxes, the more the economy must rely on government spending to keep the economy functioning because the private sector has less money to do so. This is the major negative aspect of an aggressive tax policy..

On the other hand monetary policy is related to the interest rate.This policy means how central banks manage the liquidity to create economic growth. The major objective to change the monetary policy is to manage the inflation. Second objective is to reduce unemployment. In the simple word it can be said that monetary policy is the macroeconomic policy laid down by the central bank and it involve management of money supply and interest rate. In the housing types of business, monetary policies charged. Monetary policy is a method in which central bank or currency board controls the deliver of cash, frequently targeting an increase rate or interest rate to ensure price stability and general trust in the money. Farming business is affercted by the monetary policy because when the farmer borrow raw material like seed and other sources then they have to pay the tax.On the other hand houseing business is affected by fiscal policy because when individual take loan for home then they have to pay interest according to the term and condition of bank.

2.3 Importance of Competition Policy and Its Types

In order to protect and secure the business activities and function from the unfair and invalid competition, UK government has developed various competition policies. This policy is very helpful and supportive in order to protect and secure company as well as customer. In the market economy, competition is a process where by firm fight against each other for securing customers for their products (Lakka and,2013). A competition policy should includes economic policies adopted by government that enhance competition in local and national market. In the context of Primark, it is very beneficial by use of competition policy because with assistance of this policy, company can safe its business from unfair competition. There are four key pillar of competition policies in the UK market and in the European union. These four pillar are as follows-

Antitrust and cartels- This involves the elimination of agreement that restrict competition including price fixing and other abuses by corporation who hold a dominant market position.

Market liberalization-In this policy, company can conduct competition with previously monopolistic sector such as energy supply, retail banking, postal services, mobile communication and air transport.

Office of fair trading-This is most effective and helpful; policy under which company can protect its business activities and competition among the various trading corporations (Schneider and Schmidpeter, 2012). The major objective of this trading policy is to conduct fair trading to make market effective for customer and ensure that trading firms conduct their fair competition and business operation in the market.
The competition commission was a non depoartmental public body responsible for investigating mergers , marjket and other enquiries related to regulated industries under competition law in the UK.It was a competition regular under the department for business, innovation and skills.It was a tasked with ensuring healthy competition between companies in the UK for ultimate benefit of customers and the economy.


3.1 Explaination of Pricing and Output Decisions of Business Is Determined in the Following Market

Perfect competition- In this market, there are large number of buyers and sellers and there are identified products. In this market, Primark have never choice to charge the market price and it is only price taker in the perfect competition market.

Monopoly- In the monopoly market, there is only single seller but there is large number of buyers.In this market there is only single product but there is large numbers of barriers to entry and exit. The major crisis of monopoly market structure is that company with monopoly power can set higher prices than in a competitive market (Netzer, and,2012).

Oligopoly- In the oligopoly there are very large numbers of buyers and very few sellers. There is large number of barriers to entry and exist in the market.

Duopoly-A duopoly is a form of oligopoly where only two seller exist in one market. In practice, the term is also used where two firms have dominant control over a market.

3.2 Relationship Among the Demand and Supply of Product and Services

Supply and demand is perhaps one of the most fundamental concept of economics and it is the backbone of the market economy. In these both term have inverse relationship and they are largely affected by the price of product and services. The concept of demand and supply states that for a market to function, producers must provide the goods and services that customer need.Supply represents the amount of goodsa market can provide while demand stands for the ampoiunt of goods customers are willing to buy.The quantity demanded is the amount of a product people are willing to buy at a certain price. The relationship between the price and quantity of demanded is known as the demand relationship. On the other hand supply refers to amount of a certain good producer are willing to supply when receiving a certain price.

3.3 Implication of Culture in the Business Organisation

In every business organization culture play a very crucial role in order to show company behavior and image in the market. In the manner of culture, employees and management have crucial role because culture of the organization can develop only by effective contribution of employees. In the simple word it can be said that culture refers to the cumulative deposit of knowledge, experience, beliefs, attitudes, meaning, hierarchies, religion, notion of time, roles, spatial relation, concepts of the universe and material objects and possessions acquired by a group of people (Batlle, Pérez-Arriaga and Zambrano-Barragán,2012). In other word it can be said that culture reflect by the employees interaction, their dressing sense, attitudes, performance, company structure, management style and working environment. So this is very true that in order to analyze the company behavior, culture play a very crucial role. In the context of Primark, cultural environment of business are largely influence by the organization behavior. Employees behavior, interaction, attitudes and performance shows the organization culture. There are various concepts of culture such as person, task, role, power culture etc. These all have different concept about the organization culture. All concept are related to managing, guiding and coordinating personnel’s at workplace so as they can performance their job in an effective manner. Primark can adopt person culture under which management more focus on the needs and requirement of employees. Under this concept of organization culture, management believes that employees are crucial part of the corporation so as higher authority takes the participation of employees in the business decision making process (Cai and Yang, 2014). By this culture, company wants to motivate and encourage personnel’s for higher productivity and performance. Under this culture, management allows employees to share their personal view, suggestion and conflicts with company. Primark workforce directly affect by the person culture because their needs and wants related to business practices and activities are fulfilled by the management. With assistance of this culture, Primark successfully maintain a healthy working environment at workplace and generate coordination among the workforce so as they can effectively attain the determined objective. As per the discussion it can be said that in order to shape the behavior of the organization, culture play a very crucial role.


4.1 Explaination of International Trade on the UK Business Organisation

International trade is the exchange of capital, goods and services across international border or territories. In a simple word it can be said that international trade is a process of exchanging goods and services across the country (Carvalho, Marques and Berg, 2012). When home country deal with the another country in order to gain the large number of market share and profitability is known as international business. There are various advantage of this trading such as opportunity to expand business, use foreign currency, gain advance technology etc.While company operte its business in the international market then it have to consider the various components of business environment like political, technological, social, environmental, legal etc.According to the political envcvoronmt, company have to follow the policires and legisklation of business.In addition to this, company have to face the high competition at the global level.
United Kingdom is free to establish its own trade agreements. This kind of trade allows for a greater competition and more competitive pricing in the market (Cai and Yang, 2014). Primark can gain the opportunity to expand its business in the various countries and earn the maximum profitability. By use of international trade, Primark can benefited to high level transportation system, advanced technologies, production and manufacturing system etc. The increase in the international trade is essential for the growth of globalization.

4.2 Implication of Global Factors on UK Business Organization

As it has ascertained that international trade provides diverse range of benefit to the Primark. In addition to this, company can largely affected by the global components. These global factors are as follows-
Political factor- In the international market, political factor largely affect the business activities and function. In this, government rules, regulation, policies, code of conduct and business legislation are included (Carvalho, Marques and Berg, 2012). Any organization who wants to operate its business in the international market then it have to analyze and follows all governmental rules and regulation of that country. For example, Primark operated its business in the India then it have to follow Indian business legislation and code of conduct.

Economical factor- In this factor address economic condition of the country. In this, interest rates, inflation, recession of the country included. While company operate its business in the international market then it have to analyze counties economic condition and according to that the prices of product and service will be set.

Social and cultural factor-Primark is a retail outlet which is dealing with the consumer goods like clothes, shoes etc. In order to sustain in the international market company have to analyze customer taste, preferences, culture, region, life style, occupation etc (Manova, 2013). Changing customer tastes and preference may create problem for company so firm should conduct market research and according to customer requirement the product and services should deliver.

Technological factor- In the international market, technological component is major concern. Primark have to adopt that technologies and equipments which are available in the international market (Kitzmueller and Shimshack, 2012). Changing technology may generate the issue for corporation so company should effectively analyze this component.

Environmental factor-In this factor natural resources are included such as air, water, gas, lights, sunlight etc. In the international market, this factor may largely affect the business operation so as company should effectively analyze this component. The rise in the international trade is essential for the growth of globalization

Legal factor-In this includes consumer law, employment rights, business norms etc. Primark have to follows all legal norms and customer rights in order to operate business in the international market. According to the legal framework it have to provide and protect its customer and employees.

4.3 Evaluation of the Policy of EU in the UK

European union is very beneficial for employees as well as customer. It is an association which works for protect the business and customers in the international market. With assistance of this policy, customer and employees can protect their rights against the illegal action and activities in the international market (Chor and Manova, 2012). The major objective of EU is to provide protection to workforce and customer so as they cannot face any illegal action. Another important attribute of EU policies have also usher a liberalization of policies and hence many property which were illegal from being traded can now be missing restraint traded across a range of EU state. The European union is a political economic union of 28 member states that are located primarily in Europe. The EU has developed an internal single market through a standardised system of laws that apply in all member states. The United Kingdom’s withdrawal from the European Union is widely known as Brexit. While, UK withdrawal from the EU then there has largely influenced the various countries which are dealing in the international trade.

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Business environment of the organization largely influence the activities and function. In order to gain the effective outcomes and maintain sustainability in the competitive market, corporation has to analyze the various components of business environment. From this project report, it has been concluded that stakeholder plays a crucial role in the Primark so cited venture requires maintaining healthy relationship with them. In addition to this, culture reflects the business environment and develop the shape of business. In order to provide effective shape of business, company requires adopting effective culture. It has been also concluded from this report is that Primark influenced by monetary and fiscal policy of country. Furthermore, international trade is very beneficial for Primark through which it can gain effective profitability and market share.

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