Understanding the Business Environment

This assignment delves into the multifaceted concept of the business environment, examining the various internal and external forces that shape business operations. It analyzes different types of the business environment, including economic, political, legal, social, technological, and environmental factors. Students are tasked with understanding how these factors influence businesses and their strategies for success in a dynamic global marketplace.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
1.1 Identify the purposes of different types of organisation ......................................................4
1.2 Describing how Primark is able to meet the objectives of its stakeholders..........................5
1.3 Explaining the responsibilities of Primark and there strategies............................................5
TASK 2 ...........................................................................................................................................6
2.1 Economic system of different countries...............................................................................6
2.2 Impact of fiscal and monetary policy on business organisations and their activities...........7
2.3 Identifying with the competition policy and regulatory mechanisms in UK........................8
TASK 3............................................................................................................................................9
3.1 Market structures determining pricing and output decisions of businesses..........................9
3.2 Way in which market forces shape organisational responses..............................................9
3.3 Business and cultural environments shaping the behaviour of Primark.............................10
TASK 44.1 Significance of international trade to Primark............................................................11
4.2 Impact of global factors on UK business organisations .....................................................11
4.3 Impact of policies of the European Union on UK business organisations.........................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business may be defined as an activity directed towards procuring as well as acquiring
wealth. Business bustle comprise all the economic activities which are related to the production
along with the exchange of goods and services which helps in attaining returns in economy
(Aula, 2010). employment environment refers to the aggregate of all conditions, events along
with influences that surround as well as affect the business. It includes different factors whether
internal or external, they are having a huge impact on functioning, performance as well as on
decision making of a business. Business environment involves the production and sales of goods
and services. Further, it also requires a certain investment which will help in earning maximum
profits. In the report, Primark is considered as a multinational subsidiary company of Associate
British Group and it offers the best products and services to their consumers to satisfy their
needs. Report has discussed demand of products which directly affect the supply of merchandise.
The stock of business entity is mainly sourced from the suppliers in Europe as well as Asia
(What is Business Environment? Explain its types. 2016). Along with this, discussed upon
significance of international trade as well as impact of policies of European union on the
business organisation.
TASK 1
1.1 Identify the purposes of different types of organisation
Primark is one of the leading retailer organisation and provide the fashionable products at
a cheap rates. The company members sell the product at a reasonable price so that they can
attract many consumers and by that they can attain the maximum profits. The purpose of this
business entity is that they have to maximise the sales and profits during the year. Along with
this they have to create the loyalty for a long period of time.
Public Sector – The main competitor of Primark is Tesco who deals in home ware products,
grocery etc. The main purpose of this business entity is to maximise the sales and profits by
providing the best products (Berger, Klapper and Turk-Ariss, 2009).
Charity – There are so many organisation and one of them is Save the children. This firm is a
international non-government organisation which helps in promoting and supporting for the
children rights and by that they can provide the relief in the developing countries. The vision and

mission of this business entity is that every child in the world get a right to survive. Along with
this they get a protection from the government.
Cooperative – This type of business entity owned and operated by a group of people or the
individuals for their mutual benefits as well as sharing of profits. The Cooperative organisation
in UK is Royal London Mutual Insurance Society limited and the aim of this company is to
render the different services to the consumers (Blanchard, Tolbert and Mencken, 2011).
1.2 Describing how Primark is able to meet the objectives of its stakeholders
Primark is one of the largest retailer and this company includes so many stakeholders like
consumers, governments, employees. The consideration of every stakeholder is different.
Customers- In the market, business can not exist with the consumers. The main aim of Primark
is that they have to provide the best, qualitative as well as innovative products to the consumers
to satisfy the requirements. As it helps in improving the sales of the business entity and earn
maximum profit. Along with this they has to treat friendly with the consumers (Chavis, Klapper
and Love, 2011).
Employees- The company have to provide the job opportunities in the different countries. The
employees is also the main stakeholders of the business entity. In Primark, the working staff is
good and also provide the positive environment so that they can do best work and by that they
get encouraged.
Suppliers- These are the person who are very close with the corporation and also work better
with the staff members of the factories. The manager of Primark have to provide the appropriate
training so that they can understand the rights of suppliers. These are those person who provide
the support in fulfilling the needs and wants of consumers (Chow and et. al., 2011).
Government- They make the rules as well as policies for the betterment of the business entity
and company members have to follow that so that they can attain the goals and objectives. By
using the rules and regulations which are made by the ministry bodies Primark can attain
advantage at the time of high competition.
1.3 Explaining the responsibilities of Primark and there strategies
The members of Primark having a different type of responsibilities so that thy can fulfil
the needs and satisfy the consumers along with the stakeholders so that they can attain the
objectives of the business entity.

Health and safety of workers- All the workers who re working in Primark to work in the best
environments where risk which is related to the health and safety can be controlled. The
employers having a duty or responsibility that they have to consult with their employees on the
matters of health and safety (Cohen and Winn, 2007).
Ethical consideration- It is an accumulation of the values as well as principles so that they can
address the questions which is related to human affairs that what is good or what is bad. Ethics
search for the reason for approving or not approving conduct.
Environmental concern- The manager of Primark have to provide the best environment to the
employees so that they can do best work. Along with this they have to make the strategies so that
they can attain the success by providing the products with a best quality to the consumers.
Stakeholders interest- In Primark, stakeholders of the business entity having their own rights
which assist in fulfilling the needs. It helps in maintaining the relationship which helps in satisfy
the expectations which helps in attaining the goals and objectives. Primark has to provide proper
resources to suppliers which help them in producing the goods effectively (Ebert and et. al.,
2014).
Business responsibility- The staff members of Primark have to follow the rules and regulations
properly which are made for consumers. If the staff members needs training then the firm should
have to provide the proper training so that they can increase their skills and knowledge related to
products.
TASK 2
2.1 Economic system of different countries
Economic system is the order of allocation as well as distribution of the products as well
as services within the allocated areas along with the societies. It helps in controlling the different
factors which includes the labour, capital etc. It also assist the labour in providing the
encouragement that they can do the work in efficient manner so that Primark can attain the best
possible results. Every country in the economy having their own economic system (Fernando,
2011).
Cuba – This country is using a planned economic system and in this most of the industries are
operated by the regulatory bodies. This economic system helps in improving the efficiency
remains poor. Along with this private ownership is limited. There is a significant barrier of flow

of the international trade as well as investments. In this financial services should be regulated
and controlled by the state. The government of Cuba control the price of merchandise as this
country having the less resources and also a less developers.
United Kingdom – This country is using a free market economic system. The government have
a less control over the transaction between the buyers and sellers. The decisions make by the
ministry regarding the set price of the products which are taken with the helps of collective
decision process (Gebauer, Paiola and Edvardsson, 2010).
China – It is the second largest economy in the world. Along with this they are having a socialist
market economy. It is open market economy and it is introduced by china so that they can make
a huge competition in the international market. This country using new and innovative
technologies to make the best and innovative products at a reasonable price which assist in
attracting the large number of consumers.
2.2 Impact of fiscal and monetary policy on business organisations and their activities
Fiscal policy is that policy which is regulated by the regulatory bodies which assist in
collecting the revenues from the public and on the basis of that the staff members of Primark
have to spend the revenues in the different sectors of services. When the ministry bodies changes
the level of taxation then the spending also affects the demand of the product as well as
economic activities in an economy.
Monetary policy is that policy which is regulated and controlled by Central Bank which
assist in controlling the supply of money. In UK, it generally operates through the price at which
money is provided to the consumers at some interest rates (Gecevska and et. al., 2010). The goals
which are decided by Primark in monetary policy to contribute in the economic growth and by
that company members can maintain its stability. Along with this they can do unpredictable
exchange with the currency of another country. The different impact of the policies on housing
as well as farming are as follows:-
Housing – Some consumers take the loans from the bank so that they do the investments and for
that bank have to provide the loans at the low interest rate. Fiscal policy having a less impact on
the housing sector because buyer gets the exemption to pay tax at lower rate. Many customers
are using the exemption which are provided by regulatory body.
Farming – In both the policies whether it is fiscal or monetary having a impact on farming and
they are having a positive as well as negative impact. The ministry body of UK provides the

tools to the farmers like plans, machinery so that they can farm the crops. But these facilities are
provided at a high rates because to the farmers government provide the loans at a high rates. In
the contrary, the farmers have to also pay a high tax rate to banks. Thus, both the policies
monetary and fiscal having a great impact in farming sector (Halbert and Ingulli, 2011) .
2.3 Identifying with the competition policy and regulatory mechanisms in UK
There are different competition policy in UK which are used by manager of Primark for
doing the best work and also by using these policies they can not face any problems.
Competition Act 1998 – This policy is the current major source which is related to the
competition law in UK. It assist in providing the updated framework which succour in
identifying and dealing with the restrictive business practices and dominant market position. This
policy is used by Primark which is responsible in engaging the activities and by using this
company members can increase the turnover.
Competition Appeal Tribunal – This was created by the Section 12 and schedule 2 to
Enterprise Act 2002. This competition services is an executive non-departmental public body
which was created as a support body for competition Appeal tribunal. The function of this is to
hear the actions for damages and the other monetary claims under the Competition Act 1988
(Harrison, 2011).
Office of Fair Trading – It was a not-for-profit and non ministerial government department of
UK which was established by the Fair trading act 1973, which enforced for both consumer
protection as well as competition law so that they can regulate the UK economy. It was
responsible for protecting the consumer interests throughout the UK.
Competition Commission – It was a non-departmental public body which is responsible in
investigating the mergers, markets and others enquiry which is related to regulated industries
under the competition law in UK. It was tasked with ensuring healthy competition between
companies in United Kingdom for the ultimate benefit of consumers as well as economy.
Enterprise Act 2002 – It is a act of the Parliament of UK which had a major changes to the
competition law of UK with respect to mergers and also have to changed the law which is
governing to the insolvency bankruptcy. The staff members of Primark have to make their own
decisions so that they can attain the success in the high competition in the market (Iskanius, Page
and Anbuudayasankar, 2010).

TASK 3
3.1 Market structures determining pricing and output decisions of businesses
There are different market structures which assist in determining the price of product and
on the basis of that, they can make an appropriate decision which is suitable as well as helpful
for company.
Perfect competition- There are large number of sellers as well as buyers are present in this
market and the sellers which are present in this market selling a same product to consumers. The
firms present in this market are selling heterogeneous products (Kubasek, Brennan and Browne,
2016).
Monopoly- In this market, only large number of sellers and buyers are present. Sellers are facing
so many problems in entry and exit in the market. If Primark will work in this market structure
then they can attain the maximum profits. It is because; this market structure focuses on the
brand of merchandise which they are selling to the consumers. The company is having full
control on the price of product and they also set the prices of merchandise. The decision which is
related to price as well as output made by the workers and on the basis of that company members
can determine that marginal cost is equal to revenue. Along with this marginal cost should cut
the curve of marginal revenue from its below.
Oligopoly- In this market, there are few number of sellers that are selling homogeneous as well
as differentiated products to the consumers. There are no barriers in entry and exit from this
market. Company’s members have to make the decisions which are related to price and output
that assist in dominating the market (Business-friendly environment. 2017).
Duopoly- In this market there are only two sellers present and both are independent in nature.
This term is used where two firms having the dominant control over a market. It is most
commonly suited form os oligopoly due to its simplicity.
3.2 Way in which market forces shape organisational responses
Price elasticity of demand: It is a measure of the relationship between a change in the quantity
demanded of the particular good and a change in its price.
 Nature of goods- It is the most important factor which helps in determining the price
elasticity of demand. IN this goods are classified into three parts which includes
necessities, comforts and luxuries (Laumer, Eckhardt and Weitzel, 2010). Price elasticity

of demand for luxury goods is highly elastic. Price elasticity of demand for comforts is
equal to unity. Price elasticity of demand for necessities is inelastic.
 Accessibility of substitutes- The main reason for the changes in elasticity of demand with
the changes in the prices of some goods which is available of their competing substitutes.
The large number of close substitutes of a goods which are available in the market greater
the elasticity for that good (Loorbach and et. al., 2010).
Price elasticity of supply: It is a measure which is used in economics so that they can the
responsiveness or elasticity of the quantity supplied of a goods or services to a change in its
price.
 Progression in technology- The staff members of Primark have to use the upgraded
technology so that they can serve the best product as well as services to their consumers.
It helps in improving the sales of the business entity as well as they are having a access
control which assist in increasing the supply effectively and efficiently (Moutinho, 2011).
Availability of origin or resources- If economy is using the majority of the scarce resources then
business will not be able to increase the production as well as supply so that they remain
stagnant. In this supply will be inelastic which is unaffected by the changes in the price.
3.3 Business and cultural environments shaping the behaviour of Primark
Business environment is having a great impact on the organisational behaviour. The
business environment is divided into two parts which includes internal as well as external. For
external environment, Primark can use different factors which involve political, economic, social
and technological elements that help the business organisation in determining cultural
component. They are stated as below:-
Political factor – This factor includes that when regulatory bodies are unstable in one country so
that they can make their own decisions so that they can attain the benefits (Popescu, 2013) . This
factor having the threat for the trade mechanism which is international along with the tariff
between UK etc. The members of Primark have to follow the rules and regulations which are
made by the government which having a impact on demand and supply in economy.
Economic factor – This factor is having a huge impact on the business objectives and have to do
the changes in inflation rate, wage rate etc. If there is a change in income of consumers then
there will be a positive impact on the demand and supply of products which are sold by Primark
to their consumers.

Social factor – Primark has to make products according to the needs and wants of consumers and
also, to provide the best quality so that consumers can improve the lifestyle of people.
Technological factor – Staff members of Primark have to use new and innovative technology
which will help in improving the quality of services. This factor affects the operations of
business (Demand and supply. 2017).
TASK 44.1 Significance of international trade to Primark
In the present scenario, competition among businesses in the supermarket industry of UK
having a high intense. This having a result in creating the several kind of obstacles which will
help in attaining the growth as well as success of the business organisation in UK like Primark.
For doing international trade, company members have to adopt an appropriate strategy so that
they can carry out smooth flow of operations in the long run (Porter and Rivkin, 2012). Company
members have to attain maximum benefits which are associated so that they can carry out the
international trade.
Production cost: It refers to the cost which is incurred by business when they do appropriate
manufacturing of goods as well as services. It includes variety of expenses which involve labour,
raw material, consumable manufacturing supplies as well as general overhead. It helps Primark
in reducing the cost of production.
Materials: It refers to the raw material which helps in making products for consumers for every
day. The staff members of Primark have to make appropriate products which will help in
attaining the targets which are decided by higher authorities. Without international trade,
company members cannot sell any product and do the trade their products in the market.
Wide scope of market: Company members have to sell the products which will help in attaining
targets. By doing proper trade, they have to make merchandise according to the needs and wants
of consumers which will help Primark in improving the sales (Pulver, 2012).
Economy: The workers of business entity have to do trade in economy so that they can create a
positive brand image and by that, they can attain the leading position in competitive market.
4.2 Impact of global factors on UK business organisations
There are wide range of global factors which needs to be taken into the consideration by
the business such as Primark have to do the business in the proper as well as appropriate manner
and also have to do the operations in the business activities. The staff members of business entity

have to choose the economic situation at the international level which affect the sales along with
the of the company. The company members have to do the proper innovations which helps in
attaining the goals and objectives (Siewiorek and et. al., 2012). A situation which is related to
economic downturn which can lead to results in lowering down the sales of Primark which assist
in improving the purchasing power of the consumers which tends to decrease in such kind of
situations. There are different factors in the international market which affect the business in UK.
Technology can impact the business practices of Primark to a great extent.
In the present world, brand name is important in the market and they require to adopt the
upgraded and innovative technology for doing the appropriate operations and functions at the
regular intervals of time. The technology factor having a negative impact which will help in
increasing the the overall cost of production along with the operations of the business. The staff
members of Primark have to use the advanced technology so that they can make a effective
produts which will helps in attaining the goals and objectives (Wild, Wild and Han, 2014) . By
using these technology the company members have to do the appropriate operations which is
more effective and component. The concept of globalisation has affect the retailer which is
selected in a positive manner. The brand name is important as well as essential for every
business organisation so that they can capture the opportunities which will helps in growth as
well as development. It assist in finding out the new consumers so that the company members
can carry out the new innovations so that they can develop the new product.
4.3 Impact of policies of the European Union on UK business organisations.
There are different policies by which of European Union which impact the business
organisation of UK. After joining the EU, the staff members of Primark have to maintain all the
rules and regulations along with the policies (Solomon, 2014). They have to do the qualitative
work by following the rules and regulations which is given by European Union. In this policy, all
the business organisation in UK can exchange their merchandise with the other countries without
any obstacles. There are some policies which having the impact on the business business
organisation which includes:-
International Policies – The regulatory bodies of European Union have to make the appropriate
restriction on business entity which helps in increasing their exports and decrease the imports
(Sørensen, 2012). So, by this EU can help Primark in promoting the products as well as services

in the different countries and by that they can attain the maximum profit in the competitive
market.
Taxation Policy – By using the policy which is related to tax organisation become valuable.
When the company members making the contribution in paying the tax. The ministry bodies also
help the business entities which assist in paying the tax so that they can raise the profits.
Employment Policy – The government have to encourage the companies which assist in
increase the employment opportunities. By using the employment policy, the staff members of
Primark increased the efficiency of doing the work which will helps in attaining the goals and
objectives on time which are decided by the manager of the corporation (Welford, 2013).
Licensing and trading – The company members can provide the licence to do the trade in the
different countries and by that they can enhance the business in the new market which will helps
in improving the productivity as well as proficiency.
CONCLUSION
From the above carried out analysis it has been inferred that it is essential for every
business entity that they have to understand the business environment. The company members
have to do proper understanding which will helps in attaining the goals and objectives and by the
business environment the staff members of Primark have to do appropriate monitoring on the
different factors which include political, legal, social as well as technological. Moreover, this
report explained that market structure is best for Primark which assist in satisfying the consumer
needs and requirements and by that company members can maximising the profit. The demand
and supply of the products as well as services affects as well as influence the objectives of the
business. At the time of high competition they have to use the appropriate price policy so that
they can not face any problem in selling the products. Along with this they have to do proper
analysis that Primark selling the product at a reasonable price or not. The manager of the
business entity have to conduct the SWOT analysis which assist in determining the strength,
weakness, opportunities along with the threats so that they can gain or earn the competitive
advantage in the market.

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