Micro-Firm Management and Strategy

This assignment explores the complexities of managing micro-firms by examining the resource-based view of practice. It delves into how strategic management aligns with internal resources and analyzes the impact of the external business environment, including government regulations and EU influences, on a micro-firm's success. The analysis draws upon various theories like corporate governance, foresight, and strategy theory to provide a comprehensive understanding of effective micro-firm management.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
1.1 Type of organisations and their purpose...............................................................................4
1.2 Extent to which Primark meets objectives of its different stake holders..............................5
1.3 Responsibilities of Primark and strategies to meet themselves............................................6
TASK 2............................................................................................................................................6
2.1 Explanation of different type of economic systems .............................................................6
2.2 Impact of fiscal policy and monetary policy.........................................................................7
2.3 Competition policy and regulatory mechanism and their impact.........................................8
TASK 3............................................................................................................................................8
3.1 Pricing and output decisions determined in different types of market structure...................8
3.2 Market forces shapes organisation's purposes.....................................................................10
3.3 Business and culture environment shape the organisation behaviours...............................11
TASK 4..........................................................................................................................................12
4.1 Significance of international trade to the UK business organisation..................................12
4.2 The impact of global factors on UK business organisation................................................13
4.3 Impact of European Union policies on the UK business organisation................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Surroundings which has a covered an business organisation can be stated as a business
environment. All the business activities are having effect of it and sometime organisation's has to
make adjustments accordingly. A business environment can be divided in to two parts one is
micro and macro environment(Wu, 2009). Micro can be control and manage by the management
of a business entity. But macro environmental factors are free and these factors are having huge
impact on the business activities, these factors can be political, economical, social, technological,
environmental and legal etc. The present report is based on the business environment and it's
impact on the Primark which is an international clothing retailer. Different types of organisations
are working in the UK like; charity, cooperative, private and they are having different purpose
and objectives. Each country is having their economic system which is having impact on their
markets and business entities. So it is essential to business organisation's to follow their
economic system. In monopoly, perfect competition market are having a difference in the pricing
and output decisions. At the last this report is having focus on the significance of international
trade, impact of the European union's policies and global factors on the UK business
organisation. UK business entities have to increase their efficiency to increase their foreign
exchange funds.
TASK 1
1.1 Type of organisations and their purpose
Primark is a private company which is an international clothing retailer, the company is
providing clothings, footwear, beauty products and confectionery products to their customers. It
is a private ownership firm which is having main objective to gain profits by the business
activities so they are dealing in various kind of products to enlarge the number of
customers(Wild, Wild and Han, 2014). They are having their own retail supermarket stores in
many countries to generate more revenue by enlarging scope of consumers. Many types of
organisations are working in the UK which are having huge difference in their purposes;
Public sector company: This type of companies are owned by the government and public shares
so these organisations are having a single purpose to provide facilities to public. NHS is a public
sector organisation which is having focus to maintain the health and social care organisation in

the UK to maintain a standard in their services according to their charges which are they taking
from the public.
Charity: Organisations which are working for the society to enrich it. These organisation is
having target on social welfare by taking helps from the public. Diabetes UK is a charitable
organisation which is working for the public awareness for diabetes. Public welfare and increase
the awareness on this disease is a purpose for the organisation to reduce the number of diabetic
patients in the UK(Ullah and Lai, 2011). Most of the charitable groups are having volunteers to
execute their services for the public cause and gain the finance from them to execute their
services.
Cooperative: A cooperative organisation is a group of peoples which are having their mutual
economic, social and cultural needs, by this they can fulfil it. This is a type of non profit
organisation which are working for a mutual interest. The Co-operative Press is a British co
operative society which is providing the best news and forum in the co-operative, mutual and
social enterprise sector.
1.2 Extent to which Primark meets objectives of its different stake holders
As the Primark is having a big structure, they are having two types of stakeholders like:
internal and external. Some of the stakeholders are here with their objective from the company
and the extent of the Primark to meet it;
Employees- As the company is having many of retail super markets in the UK, they are having a
large number of employees which are making their efforts for the company to increase their sales
level and services for their customers(Trkman, 2010). Employees are having many types of
expectations from the company and to their management for impressive salaries and incentives.
Extra facilities in work place which helps them to increase the customers assistance. Primark is
also Working on it and they are providing them impressive salaries and incentives for extra
efforts for the employees.
Suppliers- It is a retail company and they are having different suppliers for different products.
They are having single object from the Primark to provide them proper order list timely and
payments on time to time. This one helps to them to manage their business activities because
they are having need to continue their production. Each of the retail store is having stock
departments which is manage the sock level and as well as they are having accounts department
who clears the payment timely to their suppliers.

Customers- Most of the customers are having expectations from the company to provide them
those types of products which are error less and highly productive according to their prices. So
company is having marketing teams to analyse the customers expectations by which they can
make changes accordingly in their products. Primark is having adopted lower price rates as
compare to the average prices of the market which supports to the customers to buy a clothings
in the cheaper prices.
Government- The UK government is having rules and regulations for the big structured
companies which have to follow by the company(Teece, 2010). The UK government is having
objective from this company to give them proper tax on their profits and organisations is
following the tax policies of the UK government.
1.3 Responsibilities of Primark and strategies to meet themselves
The Primark believes in to fulfil the expectations and responsibilities against to them it is
responsible. The company is having different types of responsibilities and they are committed to
fulfil it by their strategies:
Legal responsibilities- The organisation is having responsibility to convey their business
activities and their trading polices according to the law of the UK legislation. In this part they
have to provide equal opportunities to their employees in promotions and as well as they have to
make fair decision on it. They have to follow all the guidelines of UK legislation to manage
business ethics with dealing with their customers. The organisation is following performance
management chart to according to this they are promoting their employees for better
opportunities without any type of discrimination in it.
Social responsibilities- As they are having a direct trade from consumers, they have to provide
these types of products which are having high productivity and satisfactory element. According
to this Primark is using high quality material in their products and lower prices of their products
according to the market(Ruff, 2006).
Environmental responsibilities- As the organisation is having a huge chain of their retail outlets
and products, they have to take care of the environment also. According to this, the company has
instructed to their suppliers to use ozone-friendly techniques to develop products and as well as
raw material which are they using also be gentle to use by consumers.

TASK 2
2.1 Explanation of different type of economic systems
Economic system- A system which helps to a geographical area to allocate their resources in
their different sector like; manufacturing, service and defence etc. Each and every country is
having their own economic system which helps to them to divide their natural, technological,
information resource etc. in the above given sectors(Moutinho, 2011). It helps to the country to
develop all these sectors according to their needs. Some of the countries are here with their
economic system:
Cuba- This is an African country and it is having Planned Economy which helps them to divide
their resources like; manpower, information systems, transportation etc. The country is having
72.3 Billion Dollar GDP and they are having 73% share of the service sector which is most
profitable for them. The Cuba has less resources so they have to make proper planning for
allocation of them.
United Kingdom- It is a developed country cause they are using Free market economy where a
type of market decide their needs, uses of resources and as well as they decide the pricing of
their products to manage proper control on competition in the market. It is a fifth largest
economy in the world. Most of the population is having a high purchase power so they are using
this type of economy system to manages equality in their resources according to the mutual
understandings of capitalist.
China- The country has adopted Socialist Market economy which helps to be a developed
country(Monks and Minow, 2008). According to the population they are having first position in
the world so they are having cheaper labour compare to the other nation.
2.2 Impact of fiscal policy and monetary policy
Government and Bank of England makes changes in their fiscal and monetary policies as
they feels a need. An explanation is here on fiscal and monetary policies:
Fiscal policy- When the government is having a need of more revenues to develop the
infrastructure and providing facilities to peoples, they can increase and decrease in the tax rates
and spendings of the government.
Monetary policy- It is managed by the central bank in a country, Bank of England can make
changes in the interest rates of their loans and savings to manage a profitable point in inflation

rates. By this they can control on supply and demands of the money and manage a standard level
in their economy.
These both are having impact on all sectors,farming and housing industry is also affected
by this, impacts of these polices are here;
Farming- Reduce in interest rates on loans can increase the buying power of farmers and by this
they can purchase farming equipments. Change in fiscal policy is having direct impact on the
profits and revenues. Increase in tax rates has negative impact on farmers and it decrease their
motivation level(Klapper, Lewin and Delgado, 2011).
Housing- Changes by Bank of England is having straight impact on the purchase power, if the
bank reduce the interest rates on the home loans it increase the transactions and trade in the
housing industry. On the other side if government has increase the income tax rates, it reduce the
purchase power of a customer.
2.3 Competition policy and regulatory mechanism and their impact
Competition policies helps to the organisation to compete with the market competitors,
regulatory mechanism helps them to manage and control on it. Some of competition police are
here:
Competition Act 1998- This policy is having target on the leading firms of a sector cannot be
dominate on the local on national level. For an example; Primark cannot dominate on retail
market and cannot fix a price on a particular product. It helps to the retail sector to manage an
equality in prices and quantity.
Enterprise Act 2002- This act emphasize on mergers, any organisation can not be merged from
the influence from a political pressure. A consumer can complain against the company if they
found uncompetitive behaviours from the company(Kelliher and Reinl, 2009). Primark is
following this act in their policies and they are not having merged with any of the company.
Competition commission; This is made by the EU to manages proper competition in the same
industries, now it is not in the exist. The UK organisation's can does not take anti competitive
behaviour like; fix price. Primark is having variable in their pricing according to the market
demands and supply.
These all having huge impact on the organisation and they regulatory bodies like; The Office for
Fair Trading and Directorate-General for Competition is managing these polices in the UK to
manage proper control on these companies to manage fair competition in between them.

TASK 3
3.1 Pricing and output decisions determined in different types of market structure
Pricing and output decision are having impact by the market structures and organisations
have to make these decisions according to the market. Some types of market are here and pricing
and output decisions in them;
Perfect competition- A market where many companies are available in the same sector and as
well as several customers are available to purchase products and services. Retail sector can be
covered in this where many companies are available to sale their products. Focusing on the
grocery products, it is a market where many companies are working in it(Kelliher and Bernadette
Henderson, 2006). Asda, Next, Iceland and Marks and Spencer are companies which are dealing
in the grocery. In this section these companies are having adopted competitive pricing for
products to retain the market competition. They are having focus on their supplies according to
the demands.
Monopoly- This is a type of market a company leads on the market and many buyers are
available to purchase products and services from the company. In this type of market structure ,
a company can make profits by increase in their prices and for the output decisions, most of the
time these companies are wants to increase their prices so they have reduce output of their
products and s3ervices according to the demands. Microsoft is a perfect example for the
monopoly market where they are only one in the world which are making windows for the
computers uses.
Oligopoly- In this type of market few firms leads on the market and they are having their own
mutual understanding regarding to the prices and productions. Pricing can be set by the company
according to the cost and project's variable cost(Kang and Han, 2008). In this type of market
companies are can make their mutual understandings to handle their customers. Limited
customers are available in this market structure so these companies manage high prices
according to their products and services.
Duopoly- It is similar to the monopoly market, in this two companies leads on the market. In this
type of market both companies can make their mutual understandings to divide the number of
customers and for pricing. In this type of market customers are also limited. Most of the time, in
this section companies are making high quality and valuable products. Airbus and Boeing is a
perfect example for this, these are the two companies which are making big sized Aircraft in the

world. These companies are having limited production because they are having limited demands
of the Aircraft. In this type of market structure companies are having focus on the quality
production and customers are also wants qualitative work in their products.
3.2 Market forces shapes organisation's purposes
Market forces are having a potential to make changes in the organisation's behaviours.
Market forces like; demands and supply which are having huge impact on the business activities
of a company(Johnson, Lenartowicz and Apud, 2006). Primark is having different types of
products and to sale in the retail outlet store so they have to manage separate records for each
product to manage availability of products in their stock.
Source: Demands and Supply, 2017.
It is essential to manage profitability in the demands and supply in the products and services for
the company. By this they can manage market force in an effective way. As the Primark is
dealing in the retail clothing they are having a regular demands in their products from their
customers because it it a tendency of the customers to be up to date with the latest
fashion(Johanson and Vahlne, 2009). Demands are increase in the festive seasons like; Christmas
so according to the demands they have to arrange their supply to covert this opportunity in
profits. So company has to aware about these opportunities where they have hikes in the
demands of the products to manage supply accordingly. Competition is also can be a type of
market forces for the company which creates a force on them to make changes accordingly. As
the Primark is dealing in the retail clothing market, many companies like; Zara and Asda which
Illustration 1: Demands and
Supply

are also dealing in the clothing retail sector. The company have to maintain their prices
accordingly to manage their sales and retain their market shares. They have to set their
competitive prices with their market competitors and as well as they have to make changes in
their business activities according to their market rivalries to retain the interest of their customers
in them.
The above given market forces are having potential to make changes in the organisation
accordingly(Hawken, 2007). Increase in demands is a positive point for the company to make
profits but it they have to make supplies accordingly.
3.3 Business and culture environment shape the organisation behaviours
Business environment is vital subject which is having huge impact on the company, it can
be divided in the two parts internal and external. Internal environment can be control by the
management but external is having massive impact on the company. Some of the factors are here
which is having potential to make changes in the organisation's behaviours;
Political- As the Primark is having deals in the various countries, they have to fulfil the
requirements of the political leaders and political parties. Most of the time ruling parties are
having huge impact on the board of directors to fulfil their personal interest from the benefits.
Primark have to make changes in their prices according to the change in the tax rates of the UK
government. So political factor is having a direct influence on the organisation.
Economical- World economy is having a straight effect on the organisation's response, increase
in the inflation rates impacts on the buyers purchase power. So they have to make changes
accordingly to manage supply according to their demands. Inflation rates are having potential to
make changes in the pricing of the products(Gardner and Laskin, 2011). Change in monetary
policy is also having impact on the customers purchase power and as well as on the investing
level of the companies. If Bank of England increase the interest rates on the loans organisation's
has to increase their products prices to manage extra burden of them.
Social- As the company is having deals in the retail clothings which is directly connected from
consumers. They have to make changes in their clothings according to the demands of their
customers. Customers are having difference in their demands so it is essential to fulfil their
demands in the products. so they have to make variety of products to fulfil the customers
expectations and demands. Customers can choose their desirable clothings in available range of
products.

Technological- Technology is having huge impact on the company's trade and most of the rivalry
companies are having focus on it. Most of the companies are using technology as a facility to
their customers like; online shopping and free WIFI in the retail stores. Most of the companies
are using technology to provide online shopping to customers which makes a compulsion for the
company to manage their sales via internet.
Cultural environment is related set of beliefs and practices of persons which are related to
the business entity. So Primark has to make their products and services accordingly which is not
having a negative impact on their stakeholders(Ferreira, and et. al., 2009). These both cultural
and business environment is having potentials to shape organisation's behaviours. These both are
having vital scope to built up a pressure on the company to make changes in their practices and
services.
TASK 4
4.1 Significance of international trade to the UK business organisation
International trade is essential for each and every country and for the UK it is having
huge significance. Some points are here which describe the significance of international trade for
the UK business organisation;
Increase in the foreign exchange- By this organisation can increase their foreign exchange funds
and can make more profits form it. It provides a chance to them make more profits from the
international market.
Increase in the value of the money- International trade is having potential to increase the value of
Euro compare to the US Dollar which indirectly helps to the UK organisation to deal in the
international market(Enshassi, Al-Hallaq and Mohamed, 2006).
Exchange in the products- By this UK organisations can exchange in the products and raw
materials which are essential for the companies for productions. For an example; UK
organisation can make deal with the Gulf countries to exchange their products on their cost
prices to get the Petroleum for them.
Innovative changes- International trade creates a chance for the company to take some
innovative ideas from the foreign companies. So they can increase their production and as well
as their sales techniques by the innovative ideas.

Cost of production- India and China are having cheaper labour, UK organisation's can make
deals with suppliers companies from these countries to make products according to the demands
on lower prices. So by this they can reduce their cost of productions.
4.2 The impact of global factors on UK business organisation
Impact of global factors are here to analyse them on the basis of the UK business entities;
International trade and the UK economy; Most of the UK business organisations are working in
the foreign countries and making profits for their nations which helps to the country to manage
standard level in the Euro against to the US Dollar(Dong, Wu and Hou, 2009).
Market opportunities; Global factors can generates the opportunities for the UK business
organisation. UK is a well developed country which are having a standard reputation in the world
economy. The United Kingdom is having advance technology in their work and production so by
this they can make easily more customers in the international market.
Global growth; Global factors give an opportunities for the UK business organisation to increase
their business activities in all over the world. Developing countries like; India, Bangladesh etc.
are having huge need of the products. so the company can provide their products and services in
these countries and make profits by them.
World trade organisation; Each and every year WTO announce an emerging country where a
UK business organisation can increase level by trading in the emerging countries. China is the
emerging country announced by the world trade organisation where UK business organisations
can expand their business activities. These emerging markets are having potentials to supports to
these companies by this UK business organisation can makes profits for them.
4.3 Impact of European Union policies on the UK business organisation
The European Union has made some policies for the United Kingdom's business
organisation. These policies are having huge impact on companies and they have to make their
trade and business policies accordingly. Some of them are here;
Employment policy; EU is highly concern about their workers which are working in the UK
business organisations. So they have made employment policy for them, by this they are
reserving the benefits of their workers in the UK business enterprises(Dollinger, 2008).
Employees which are comes from the EU nations are free to move if they found a better work
opportunity for them. So any organisation can not tie them in any types of bonds. They can
switch jobs with their provident fund and salaries with the new job.

Kyoto Protocol; This is a policy which emphasise on the work safety, UK business organisations
have to provide safety equipments and safe working conditions to their employees(Chi, Kilduff
and Gargeya, 2009). Better working conditions increase the motivation of the employees and as
well as it increase the loyalty of the employees for their company.
European Union wants to safe their employees benefits in the UK business organisation,
so the organisations have to make separate policies for the employees from EU.
CONCLUSION
The above concluded report is having focus on the business environment of PRIMARK ans UK
business organisation. External environment is having potential to make changes in the business
activities of the company so they have to make changes accordingly. Stakeholders are having
expectation from the company which is a responsibility of the company to fulfil by their acts,
facilities and mainly by the remunerations. This present report is having details on the
international trade which is significant for the UK business organisation. Global factors are
having impact on the business organisations which are making compulsion on them to make
changes accordingly. So UK business organisation have to make changes in their activities,
services and products according to the external factors which are having impact on them.

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