Differences between companies for non-government, profit and non-profit firms

This study explains differences between firms and defines differences between micro, medium and small sized enterprises.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION.......................................................................................................................................3
ACTIVITY 1...............................................................................................................................................3
Differences between companies for non-government, profit and non -profit firms.................................3
Differences between medium, small and micro sized enterprises............................................................4
Several types of legal structure associated with different forms of companies........................................5
Scope, size and legal structures of different organizations link to business services, goods and
objectives.................................................................................................................................................6
Interrelationships of varied organizational functions and their interconnection to objective and structure
of firms....................................................................................................................................................6
ACTIVITY 2...............................................................................................................................................7
PESTLE framework to identify negative & positive impacts upon Primark business operations............7
Porter’s five force model for micro environmental analysis....................................................................9
Use appropriate frameworks to determine organization’s internal weaknesses and strengths................10
SWOT analysis of company..................................................................................................................12
TOWS matrix to justify strength and weakness interrelation with micro and macro factors.................13
CONCLUSION.........................................................................................................................................14
REFERENCES..........................................................................................................................................15

INTRODUCTION
Business environment comprised to micro and macro factors that impact its business
operations and practices. The current report is divided into two activities; one will comprised of
different companies and second is based on one firm that is Primark. This study explains
differences between firms and defines differences between micro, medium and small sized
enterprises. Range of legal structure linked with several forms of business will be analyzed in
this report. Furthermore, this study justified how legal structure, scope and sized of companies
link to business services, items and objectives. It also defines critical analysis of interrelationship
of varied operational functions that might be link to structure and objectives of firms. Moreover,
this report clarified macro environmental analysis by using PESTLE model, micro analysis by
utilizing Porter’s five forces model and also justify VRIO and value chain analysis in context of
Primark. Finally, this study highlights strength and weakness of company with the help of
SWOT analysis and TOWS matrix.
ACTIVITY 1
Differences between companies for non-government, profit and non -profit firms
Private sector companies-
This sector is important element of country’s economic system that is run by several
successful organizations, more than government (Boutillier and Uzunidis, 2016). Private industry
is wide in free venture economies such as UK, in which authority imposes relatively few
restrictions on companies. Primark is the best example of private sector organization that is able
to operate their business operations and functions in effective manner within fashion industry.
The purpose of this company is to increase their profit margin rather than its competitors
available in same sector. Private sector organizations are set up by entrepreneurs and individual
who seeking to make profit and increase sales from their business practices as well as activities.
Public sector firms-
Organizations under this sector are owned & managed by government and exist to cater
their services or products for their consumers (Warnakulasuriya and Jayarathne, 2018). Through

procedures of outsourcing, public sector companies will engage private companies in order to
deliver their services and products to their citizens. ESPO is public sector organization, is able to
provide the best quality service or items to wide number of consumers. The purpose of firms
working and operating under this sector is to cater the best things to local people in order to
satisfy their needs in effective manner. Firms under this sector fund their business activities
through government expenditures financed by authority borrowing.
Voluntary sector companies-
It is a group of individuals who voluntarily enter into a contract to form a company to
accomplish a purpose. Many voluntary firms are working or performing in this sector for socio
economic development and betterment of local people and for dissemination & promotion for
culture (Akbaş and Canikli, 2019). These types of companies fund their activities with the help
of organizing charity events where a lot of people are able to donate money for well fare of
people. British Red Cross is one of the suitable examples of voluntary sector firm. The aim or
purpose of this company is to aid people in crisis and respond in effective manner to disaster as
well as emergencies in United Kingdom.
Differences based on size and scope of different kinds of firms-
As mentioned above, British Red Cross is voluntary sector company their size and scope
of business is different from other firms such as public and private. This firm is able to operate
their business activities and operations across the nation in order to improve living standards of
local or residential people. In additional with it, Primark scope is limited as it was a private
sector company. On the other side, scope of public firms is vast, entrepreneur of these companies
can increase profit from local public.
Differences between medium, small and micro sized enterprises
Medium enterprise-
Medium sized companies are defined as a company that not exceed or grow at least 3 out
of 4 of following criterion in current era and preceding balance sheet sum 17 million. They
prefer to mange as sole proprietorship, they provide greater level of managerial control for firm

owner, while maximizing expense. Medium enterprises are unable to hire more than 100
candidates (Abughattas, 2017).
Small enterprises-
Small enterprises independently managed and operated company that is limited in size as
well as in revenue (Demmelash, 2018). Forms of these companies included dry cleaners,
engineering companies and restaurants. They are able to hire or recruit more than 250 applicants
within companies in order to deliver limited items or services.
Micro enterprises-
Micro firms is a business that meets at least two of situations such as turnover must be
not more than 623,000, balance sheet sum may be not more than 316, 000 and average number of
staff are not more than 10.
Several types of legal structure associated with different forms of companies
Private limited organizations-
It is another legal structure, in which companies lies between a widely owned public firm
or a partnership. They offer limited liability or legal protection for their business shareholders
(Bunger and et.al., 2017). A private limited firm is determined by organization name, directors,
formation and shares. With this legal structure, companies gain many benefits for example,
private firm after receiving certificate of incorporate start enterprise immediately and effectively.
But on the other hand, in a private limited firm number of members or shareholder in any
situation cannot be exceed over 50. Another drawback of this legal structure is that private
limited organizations is that is cannot issue prospectus to local people.
Sole traders-
It is one of the simplest form of legal structure and relatively easy to set up or implement.
As a sole trader, Primark will be legally accountable for all aspects of their business; they usually
make all decision about running and operating their business in marketplace. The reporting
requirements with this structure are fewer more than the other, as it defines its advantage (Pitkin
and Sorley, 2016). But on the other hand, along with benefits sole trader comprised with some

disadvantage such as unlimited liability which means all personal resources of company are at
risk when things go wrong.
Partnerships-
It is the third form of legal structure, which helps companies to run business within
different nations by taking approval from other people. ESCO comply with and adhere to
partnership as legal structure which make them able to take decision after discussing with
business partners. Like sole proprietorship, this structure form of company can be formed
without legal formalities. No formal or legal documents are needed to be prepared as need in
case joint stock firms. On the other side, there is always likelihood of poor of harmony amongst
partners, that impact on business practices and profitability negatively.
Scope, size and legal structures of different organizations link to business services, goods and
objectives
It can be said that scope, legal structure and size of companies mentioned above are
connected to objectives, products and services. For example, the objective of Primark is to
increase profitability and productivity rather than before and to become market leader. With the
help of following appropriate legal structure they can achieve its objectives in effective manner.
The advantages of structure help in achieving set aims and allow deliver quality products
according to the needs of clients.
In context of size, JCB estimated revenue more than 3.35 Billion, the management of this
company is able to work with their legal structure in effective manner by performing towards
achieving set aims. Products, business objectives and services of this firm is correlated with legal
structure, scope and size as number of staff are capable to serve best service to its target market,
they aid to achieve objective and raise profitability through better work performance that also
help to enhance productivity level rather than before. With the help of selecting right legal
structure, company will use its features in order to achieve aims and set objectives.
British Red Cross is capable to achieve their objective and deliver their services to local
people in systematic manner. Their legal structure allows managing day to day activities in order
to cater the best facilities for staff and consumers.

Interrelationships of varied organizational functions and their interconnection to objective and
structure of firms
Marketing interrelationship with HRM-
HRM & other department such as marketing perform closely together in organizations to
build brand position and increase productivity (Brewster, 2017). In context of interrelationship,
marketing section efficiently collaborate with Human Resource Management to advertise several
vacancies in market that aid to gain attention of talented labour suitable for specific job post.
Interrelationship between marketing and HRM connected to objective and structure of
firm. For example, Primark aim is to increase profit for which they requisite more people.
Relationship between both departments, allow firm to get skilled applicants as soon as possible
because HRM cater info about required applicants to marketing, and then they create content to
promote vacancies that help to achieve objective effectively.
Finance department interrelationship with marketing-
Finance section comprehends needs of marketing department and then provides money to
create effective promotional plan. It play vital role with marketing section for instance,
communicate and collaborate with them for preparing effective promotional strategies that may
be increase profit & enhance financial performance of firms. It can be said that, finance
department give money from different departments such as production department etc. In order
to complete their activities that is beneficial for firms in term of increasing profit margin (Risi
and Wickert, 2019).
Link to organizational structure and objectives-
Marketing & finance section work together in organization to gain better results in term
of increasing profit margin and financial budget rather than before. It connected to organizational
objective, for example, ESPO aim it to provide support to different companies such as fire safety
goods to pest control. By communicating with finance department and working with them
marketing sector are able to achieve objective, by gaining attention of consumers towards
business. By designing advertisement including business info marketing gain benefits it is
possible because finance section allocate fund according to requirement.

ACTIVITY 2
PESTLE framework to identify negative & positive impacts upon Primark business operations
Political factor-
Changes in taxation policies, political stability or instability and trade policy impact on
current business practices might be in negative or positive manner. Changes in tax policy affect
Primark positively as it helps them to increase their profit margin. UK government reshapes their
tax system and modifies current policies related to it. For example, the national authority of
United Kingdom decide to reduce 10% point in rate of corporate tax leads to increase in Gross
Domestic product (GDP) of 1.2 percent, driving progress in regions across nation (Zhao, 2019).
Modification would also increase foreign direct investment by 1.6% post Brexit, comparable to
34 Billion.
Economic factor-
Interest rates, disposable income of consumers, exchange rates and economic growth
included in this factor that impact on how a company does business and also how sustainable or
profitable they are. The Biggest economic factor that has impacted Primark in current time as
with most organizations is unemployment rate. It impact on HRM operation of organization
positively, as it allow human resource manager to hire skilled applicants from talent pool.
Social factor-
Population growth, career attitudes, health consciousness and age distribution includes in
this component that affect business operations positively or negatively. Consumer like to buy
cloths according to trends in market that impact on Primark production operation negatively as
they need to produce products accordant to trend which is quite impossible because it get
changed continuously.
Technology factor-
Technology advancement and development put positive impact on marketing operation of
Primark. It allow marketing department to generate brand awareness within marketplace that
help to gain attention of consumer as well as aid to retain potential people for longer period.

Environmental factor-
Government and consumer are more concern in context of environmental sustainability;
it put pressure on organizations to reduce their carbon footprint. This factor impact Primark
operations and business practices positively as they already contribute in sustainability.
Company commits to recycle wherever possible within their outlets across the nation.
Legal factor-
One of the most current employment legislation impacting clothing retail sectors in UK
was introduction of new workplace pension regulations that makes it compulsory for Primark to
contribute 3 percent of their workers workplace pension for eligible British staff, it impact on
HRM operation positively as help to build positive brand image within marketplace.
Porter’s five force model for micro environmental analysis
Threat of new entrance-
The degree of this force is low because of high cost setup that creates barriers for new
firms to enter into fashion industry. Setting up business within this sector is very difficult, as it
require a lot of efforts and investment which is not possible for every company. So, it can be said
that Primark has low threat of new entrance that impact on its production and profitability
positively.
Threat of substitute products or services-
Degree of this force is high because other organization are providing similar goods with
lower price and now it is quite easy for consumers to switch from one item to another as they
have become more options within fashion industry. It impact on production and sales operation
of Primark negatively as it threaten organization for decreasing their financial performance and
minimize customers base.
Bargaining power of consumers-
Bargaining power of target market is always high because they have strength to cut actual
cost of item. There are various players in fashion sector and now people are more sensitive
towards price so they visit every outlet and then make purchase decision to purchase cloths. As it

impact Primark pricing structure and sales growth negatively. Consumers prefer to buy goods
with low price that is not suitable in context of company.
Bargaining power of suppliers-
Within fashion industry, the degree of this force is low because of nature of inputs for
organizations. In simple words, Primark does not rely on individual big suppliers more than they
have number of smaller ones, and so here it low the power of suppliers for bargaining and
increasing cost of supply. When organization is not depending on suppliers, it put their ability to
cut the cost lower that affect business profitability in positive manner.
Competition rivalry among existing players-
Competitive rivalry among fashion sector in which Primark operate their business is high,
as there are number of similar size companies in market with providing and producing same
items. High competitive environment put negative impact on firm business operations as they
need to focus on production and research & development function in order to deliver goods
according to needs of consumers with better quality.
Use appropriate frameworks to determine organization’s internal weaknesses and strengths
Value chain analysis-
Primary activities-
Inbound logistics-
It is one of the most important activities of organization that impact on its profit margin
and supply chain management. Primark is cable to achieve their business objectives and aims as
well as capable to sustain within marketplace by focusing inbound logistics. As they store
products after completing production procedure in warehouse and then deliver in effective
manner according to demand of consumers.
Operations-
Here process or activities associated with production procedure and assembling are
implied. Primark manufacturing department collect the best raw materials from market in order

to produce quality products such as men and women clothes according to their needs. Research
and development section conduct market analysis to gather information about current market
trend, and then use while producing clothes for target market.
Outbound logistics-
This activity is concerned with distribution, collection and storing of services and goods
for consumers. Primark is unable to sell their item online as many individual argue in defense of
company that they offer rock bottom prices outcomes in fewer profit margins.
Marketing and sales-
This activity helps Primark in making target market aware of their item and convinces
consumers to buy goods. Skilled applicants within organization are able to prepare the best
advertisement plan and strategies in order gain the attention of people as result increase profit
margin.
Services-
Aspect of this activity includes all of those actions that will enhance and maintain goods
value. Primark understand the importance of improving and maintaining consumer loyalty
because it directly impact on its productivity and sales. Organization offer pre or post services,
they are able to response query with the help of customer service advisor on their helpline where
they assist consumers with making a complaint about a member of firm staff or its goods that
people have buy from them.
Support activities-
Organization infrastructure-
Primark business infrastructure support their function and system that permit it to
maintain different operations. Organization administration is able to handle their legal as well as
management function in order protects business activities from legal issues. They comply with
and adhere to all legislation that affects business.
Human resource management-

In order to strengthen workforce and creative inclusive work culture, HRM in Primark is
able to hire and select the right applicants who are capable to increase productivity level rather
than before by contributing in production system that is very beneficial for this organization.
Technology development-
While producing cloths for target market and conducting market analysis, Primark
production and R&D department can utilize latest technologies in order to enhance consumer
satisfaction by offering goods according to their preferences and desire.
Procurement-
Primark is able to sustain and gain competitive benefits within fashion industry by
centering on supply chain, distribution network, computerized supply chain & distribution
related to point of sales, and manufacturing. With the help of this procurement, organization can
be capable to become a market leader that strengthens their brand image rather than its
competitors.
VRIO framework-
Value Rare Imitability Organization
Gaining competitive
advantages is valuable
for Primark as they
are able to gain
competitive benefits
by offering quality
products.
Primark is unable to
use latest technologies
in context of selling
items online, which
directly impact on its
productivity and
profitability
negatively.
Primark faced inquiry
over utilize of illegal
labor, it create
difficulty to imitate
their worker. It impact
brand reputation and
position negatively.
Company effectively
gains competitive
advantages has they
has skilled applicants
who are able to
support while
achieving business
aims and objectives.
SWOT analysis of company
Strength-

Primark has grown very rapidly over years and progress in home market of Ireland has
led firm to expand to UK and many other nations. They have over 350 outlets and operate in 100
countries across America and Europe. Primark is considered as one of the fastest progressing
retailer in US. The above statement defines organization strength and abilities. Company is able
to offer broad range of goods and all of their items come under 5 wide categories for example,
men, women and kids.
Weakness-
The weak point of Primark is its online absence; they are unable to sell its quality goods
online, as it impact on organization profit margin and sales. Lack of online presence affect
consumers’ base of company that is not suitable for the growth of business as they can loss
change of gaining competitive advantages.
Opportunity-
By developing and implementing latest technologies within business practices, Primark
can gain competitive advantages and build their strong online presence where their marketing
team update list of products according to market trend. They can grab the opportunity to grow
business further in United Kingdom and other countries.
Threat-
High competitive environment impact Primark business operations and functions for
example it threaten them for decreasing their performance rather than before.
TOWS matrix to justify strength and weakness interrelation with micro and macro factors
SO- strength used to gain opportunities
WO- Overcome weakness to gain chances
ST- Utilize strength to overcome threat
WT- Weaknesses to overcome organization threat

After conducting above analysis by using different models, it has been identified that
strength and weakness of Primark are interrelated with micro and external macro factors, as it
influence strategic decision making process positively or might be negatively.
With the help of strong workforce in company, Primark is able to build effective online
presence, as they can sell products online that drive more people towards purchasing their goods
via online application. It directly impact on decision making activity of marketing department,
they need to more focus of selling items to consumers via online.
CONCLUSION
From above analysis, it has been summarized that Primark with the their strength and
abilities gain competitive advantages, they increase profit margin by providing items accordant
to consumers that are especially produce after conducting and considering market trends because
it affect sales and growth of their business. From above analysis, it has been concluded that by
complying with right legal structures organizations achieve their business aims and set objectives
in effective manner, which is quite beneficial for them. It helps to sustain within marketplace for
longer period and permit generate revenue rather than competitors. It has been analyzed that
marketing, finance and other function by working together contribute and support firms to
become a market leader and also allow gaining attention of new consumers rather than past few
years. Moreover, strength of company permit handle difficult situation occurs from different
factors such as political, social, environmental and legal.

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