Impact of EU Policies on UK Businesses

This assignment explores the significant influence of EU policies on UK corporations. It examines various policy areas like employment, regional development, inflation, taxation, international trade, and environmental protection. The analysis highlights how these policies can positively and negatively impact UK businesses, urging them to adapt and comply with evolving regulations.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1................................................................................................................................................3
1.2................................................................................................................................................4
1.3................................................................................................................................................5
TASK 2............................................................................................................................................6
2.1................................................................................................................................................6
2.2................................................................................................................................................7
2.3................................................................................................................................................8
TASK 3............................................................................................................................................9
3.1................................................................................................................................................9
3.2..............................................................................................................................................10
3.3..............................................................................................................................................11
Task 4.............................................................................................................................................12
4.1..............................................................................................................................................12
4.2..............................................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Internal and external factors which are the key components and are very much essential
for the organizational structure of an business corporation and are also liable in influencing the
same can be referred as business environment of an entity. The concept comprises of the
company's functionalities, all the operational activities, employees, customer, management,
supply and demand and the rules and regulations of the business. There are several factors that
have high level of impact on organizational growth and success such as political, economic,
social and technological etc. Thus, it is highly required for the business organization to frame
competent strategies and policies by making evaluation of the happening of external business
environment. (Johanson and Vahlne, 2009). The present report is based on Primark which is one
of the leading fashionable retailers of UK. It offers highly unique or designer clothes to the
customers and thereby enhances their living standard. The below presented report is summarised
on the tyopes and purposes of the organization and how the objectives of the stakeholders are
met by the corporation.
TASK 1
1.1
Vision, mission and objectives of Primark are enumerated below:
 Vision: To become a leading clothing retail business organization of UK. Moreover, there
are several clothing retailers are available in the market which offer clothes and other

accessories to the customers. In this, offering high quality products and meeting the
expectation level of customers Primark can attain leading position.
 Mission: To widen geographical reach and presence by offering clothes, shoes and home
ware through the means of several super markets.
 Strategies and objectives: Main objectives of business unit are to offer designer clothes or
apparel to the customers at affordable prices which in turn raise their living standard.
Different types of business units have varied goals and objectives are enumerated below:
 Public limited organization: Creation of employment opportunities and providing
customers with the high quality services is one of the main objectives of publicly listed
business organization. Primark is publicly listed business organization which places high
level of emphasis on offering designer clothes to give unique identity to the customers.
 Sole traders: Maximization of productivity and profitability is one of the main objectives
of sole traders behind performing the business operations as well as activities (Enshassi,
Al-Hallaq and Mohamed, 2006).
 Charitable business units: It implies for the organizations which place high level of
emphasis on making contribution in the welfare of others (Wiklund and Shepherd, 2005).
Hence, such business units do not operate for earning profit margin.
1.2
There are several stakeholders of Primark who are highly concerned with the monetary and
non-monetary performance of business organization. Stakeholders have some objectives when
they develop and enhance their association level with the business unit and its offering. In this,
with the aim to build as well as maintain faith of investors Primark has taken several initiates and
thereby met the objectives of stakeholders to a great extent is as follows:
 Suppliers: Raw supplier laid emphasis on giving credit to the organization which makes
payment on time. In this regard, company has satisfied the objective of suppliers or
creditors by fulfilling the obligations within the suitable time frame.
 Customers: In the present times, customers make focus on purchasing highly unique or
fashionable apparel which in turn reflects their high living standard. Hence, Primark
offers apparel to the customers according to their needs and expectation level (Teece,

2010). In this way, by offering designer clothes at affordable prices Primark has fulfilled
the objectives of stakeholders.
 Investors: Shareholders invest money in the firm’s operations with the aim to make
value addition in their money. On the basis of this aspect, attainment of higher return on
money employed is one of the main objectives of investors. Hence, Primark has met such
objective of shareholders to the significant level by offering regular and stable dividend
to them.
 Government: Attainment of suitable and high tax amount is one of the main objectives of
government. Moreover, government uses such income in other productive aspects and
thereby makes contribution in the economic growth as well as development. In this
regard, by making payment of suitable tax amount Primark has contributed in the
achievement of government’s objective.
 Employees: In the recent times, employees prefer to work with the organization which
offers growth and development opportunity to them (El Sawy and Pavlou, 2008). By
considering such aspect, business unit has offered growth opportunities to the personnel
by conducting training session. This in turn enables personnel to enhance their
competency level significantly.
1.3
In the highly competitive business environment, Primark can attain success only when it
evolves high level of satisfaction among the stakeholders. For this propose, it is highly required
for the business organization to develop highly competent framework for fulfilling the
responsibilities in relation to the stakeholders. Apart from this there are some of the
responsibilities which have to be fulfilled by the organisation and which are presented below:-
Taking care of the stakeholders can be considered as the first prime duty for the business
corporation. This in turn enables firms to build distinct image at marketplace and thereby attain
success. Along with this the company has to manage the human resource, in such a way that they
are have a feel of comfort for the working environment (El Sawy and Pavlou, 2008). There
should also be arrangement of some incentive schemes and reward system and also motivational
theories should be applied by the management through this the employees will feel more
enthusiastic and energetic and will try to work till their best limits.

Customers: Providing the best quality products and services is to considered as one of the
main duty or accountability of higher management. By keeping such aspects in mind Primark
has employed strategies in relation to quality management. Thus, by using SERVQUAL model
and TQM technique business unit can maintain and deliver high quality services to the
customers. In this way, by enhancing customer satisfaction Primark can maximize both
productivity as well as profitability.
Employees: Primark has responsibility to provide personnel with highly effectual
working conditions or environment. Along with this, business unit is also accountable for
offering fair wage and growth opportunities (El Sawy and Pavlou, 2008). Hence, for fulfilling all
such responsibilities Primark needs to consider UK laws. Hence, by complying with such
legislation firm would become able to enhance employee motivation and satisfaction. Further,
there should be provisions of parental leaves, and insurance policies to the working members and
also medical facilities should be made available at the company or the office premises. Moreover
there should be a feel and sense of equality among the workers so that no discrimination can take
place in the working members. This in turn develops satisfaction among the personnel and
thereby reduces their absenteeism level.
Investors: Company is responsible for providing information to shareholders about
monetary health and performance. Moreover, investment or divestment decision of them is
highly influenced from such aspect. In this regard, Primark can fulfil such responsibility by
preparing and publishing financial statements with the suitable time frame.
Government: Now, sustainable business environment is one of the main aspects on
which government places high level of emphasis In this, Primark is required to perform its
business activities and functions in a eco-friendly manner (Kang and Han, 2008). Thus, by
employing or investing money in high tech equipments Primark can contribute in the
environment sustainability to a great extent and thereby achieve success.
TASK 2
2.1
The distributing scheme or the mechanism used by an economy and their governing
bodies for resources, trade-goods and services are to be known as 5the economic system of that
country. The term is a much broader concept, for instance it can be utilised for controlling the

five manufacturing elements: human resource, finance, industry, physical supplies and different
information. Each nation is developing some specific economic frameworks that needed to be
followed by the organizations to run their businesses. This gives strengths to the companies in
terms of generating the development and growth opportunities. The below presented are the
ways in which the following economies their policies and structures are described:-
Cuba.
Cuba operates under a dual economy which is operated side-by-side (Morrison, 2006).
One is socialist peso which has been applied to most of the civilians and providing them free
education, free health services, universal employment, payments on joblessness, disability and
retirement benefits. On the other hand, another system is the free market economic system in
where economy operates in the traveller, global and sells overseas sectors, and substantially
sustains the collective economy. Under this, the nation plays dominating role where its
organizations establish the contacts with different political and militaries parties. It has created
the situation of corruption n because in the absence of the authentic regulatory bodies. The main
function of the following financial system is community and government of Cuba. As per the
policy, government has taken the action related to foreign exchange. The major revenue and
profit has generated from oil sector where decrease in prices of this item has decreased with the
time.
United-Kingdom
The economy condition of UK has improved with the time and it has increased with
alarming rate. The major reason behind this is farming or agriculture sector. Along with this,
different services sector like real state, banking etc have also boost up nation economic situations
over the time (Wei, Chien and Wang, 2005). In this context, manufacturing and health care
service business sector have also given contribution in the development of the UK in every
aspect. There are many of the goods which have imported and exported by country with the other
overseas states. The responsible economic system in this context has mixed economy which has
provided a free environment to the organizations to free trades in the market in entire UK. After
Brexit, it has created a challenging situation for the country to conduct the business in EU state
members. The reason of this, after leaving EU group, Britain has come under the non-eu nation
and for these type of nations, they have to face and follow various regulations.
China

With the passing of time, the economic situation of China is becoming strong. The reason
behind this is effective development of business and social aspects. As it comes under the
category of developing country and there is a huge population live there. This has created a
situation of lack of resources for China. To overcome with this problem, the government has
adopted traditional economic system. Under this, products and services have produced by the
organizations are directly related or connected with beliefs, traditions, customs etc of local
community. The result of this, it has minimized the wastage of resources and secure the scare
ones for the long time.
2.2
UK economy situation has increased, developed and improved over the time.
Government has formulated various fiscal and monetary policies in the favour of the
organizations. It has created a good balance between different elements that support the
development of the nation. In monetary rule, it is responsible for keep the control over several
small and important aspect of a state. This is considering as the best tool of interest rate decisions
so that it becomes easy to make the control over the spending of the public on diverse things.
The aim of the following framework is to manage inflation rates by promoting the growth of UK.
There are various firms of UK which are doing the businesses at the international level.
The generated amount in terms of revenue and profit creates a very good balance of payment
within the nation. Along with this, some of the companies have trade with them and it has
minimized the situation of borrowing money from government. World Bank and IMF have two
major finance institutions which have looked towards the flow of funds in the market place. The
aim of UK is to purchase the goods and services to improve the lifestyle of the public. On the
other hand, fiscal policy of UK government has affected economic condition of the nation. Under
this, regulatory bodies have kept the control over the flow of funds in the market. They have the
right to increase or decrease the tax rate which has directly made impact over the spending of the
people over the various goods.
2.3
Providing a platform so the necessary improvements can be attached in the individual
market and also promotion of a healthy competition in the market is considered to be the prime
goal of the competition policy. The technological innovations are ensured in order to promote

efficiency in the various markets and this is to be considered to be the key motive of this policy.
With the motive to develop highly effectual business environment UK government has framed
some laws and legislation such as competition Act, Enterprise Act etc. According to the
competition policy or Act business units which are operating in UK cannot create monopoly by
charging higher prices from customers. Hence, competition Act (1998) offers high level of
benefit to both business units and customers. Healthy competition enables entrepreneur to enter
in the market with innovative offering and thereby get the desired level of outcome or success.
Further, such act also provides customers with fair product and pricing aspects (Welford, 2013).
In this way, such Act reduces exploitation aspect of customers to a great extent. Along with this,
Enterprise Act (2002) places emphasis on fair trading policy. On the basis of this aspect,
companies including Primark are required to provide customers with fashionable clothes at
suitable prices (Botha, Kourie and Snyman, 2014). Further, such act also contains information
about anti-competitive practices as well as merger and acquisition activities which Primark has
to follow. In this way, competition policies are highly effectual which in turn restricts
undesirable activities within the marketplace.
3.1
Market structure defines the interconnection between market characteristics like buyers
and sellers strength, degree or extent or collusive behaviour, competition kevel, product
differentiation & entry & exit easiness. There are distinguish market structure having different
number of buyers, sellers, substitute, hence, follows different methods of pricing & output
decisions, that are narrated below:
Perfect competition: Under this market structure, very high numbers of sellers operates
and compete toughly with each other to attract greater number of buyers as much as they can.
Firms do not hold substantial power on the market hence they do not have ability or strength to
control or influence the market prices. In addition, companies sold perfect substitute goods to the
consumers and users also have extensive knowledge about each and every firm’s items along
with the prices at which goods are offered. In this, industry is price setter who set value of the
goods at where aggregate market demand & industry supply intersect each other, and firms just
sell their goods at that prices. It must be noted that any potential entrepreneur can enter into the
market and exit also without any hurdles.

Monopoly: In case, where whole market is controlled by a single entrepreneur is called
monopoly. In contrast to perfect competition, there is no competition exists in this market and
also entity holds superb power on the market because customers have no alternatives to buy such
items from any other distributor (Chow and et.al., 2012). They set prices considering their profit
motive objective, still, in order to gain traffic of the audiences, monopolists has to reduce
charges. For instance, UK railway service is a perfect example of monopoly market structure.
Monopolistic: In market, where number of small sized establishments compete with each
other by offering best quality goods to the audiences is called monopolistic competition. Unlike
perfect competition, monopolistic firms deliver slightly different product to the users and holds
certain power over the market that allow them to set prices under certain range (Hazlina Ahmad
and et.al., 2010). They set slightly different prices from each other to get larger traffic by
rendering unique quality and greater value to the audiences.
Oligopoly: This type of market is dominated by fewer marketers; hence, limited level of
competition exists. They either can compete or collaborate with each other to have collective
power over the market. With the help of this, they can set optimum prices and get more yields
also. Their goods either may be homogenous (substitute) or differentiated from each other. For
instance, in UK airline industry, British Airways, Easyjet & several others firms gives airline
services to the consumers.
Duopoly: As name implies, only two business units operates in the market and deliver
goods addressing product specification in the mind of consumers. For instance, Airbus &
Amazon are only the two organizations that merchandise services to the larger audiences and
affects supply to a great extent.
3.2
Market forces: Businesses are highly affected by numerous market forces such as total
demand, supply function, competition level & many others. Changes in the market elements or
factors have a both sided affect on the corporate functionality that is describing here below:
Demand: It refers to the total quantity of the items and services that a buyer is ready or
willing to buy at specified charges.
Supply: It indicates the total quantity of goods that company is ready to sale to its
consumers at set charges.
Impact of demand on shaping organizational responses:

Law of demand: it clearly illustrates that how market demand will be respond with the
change in pricing policy of an organization. This law depicts that price and demand follows
inverse relationship means if price goes up, then demand comes down however, if price goes
down then overall demand of the consumers will be rises. In the cited graph, it can be seen that
at if price declines from 20 to 10 then quantity demanded widen from 4 to 12. However, by what
percentage demand will be change can be measured with the elasticity. It explains that perfect
elastic goods demand changes with the similar percentage with the change in prices (Bitzenis and
Nito, 2005).. Unlike this, imperfect elastic goods demonstrates that demand have no relationship
with the prices, hence, charges either go upward or downward, demand will have no effect. Thus,
from the analysis, it can be said that at economical charges, UK establishments will be able to
maximize demand, turnover & earnings as well.
Impact of supply on shaping organizational responses:

Law of supply: It posses positive relationship between both the supply & price, because
every seller wish to gain maximum return and at higher prices, they can fulfil this objectives.
Looking onto the graph, it is noticed that with the increase in price from 10 to 20, supply goes
increase from 4 to 12.
Considering both the laws, it can be founded that businesses like Primark must set
optimum prices for their offerings to manage their demand and gain maximum return. Apart
from this, other external global forces such as consumer preferences, promotion, advertisement,
competition and others are also several forces that influence the success of the business.
3.3
The business operations are impacted by the both the business as well as cultural
environment. PRIMARK is the business corporation which have a world-wide business
scattered. It offers wearings and home-ware goods to the global audiences; therefore, cultural
differences have a strong influence over the demand of the people. Customers from different
culture demand diverse range of wearing products & services on the basis of their cultural &
social influence. Therefore, it seems essential for the Primark to tailor the need and desires of all
the customers and thereby satisfy their audiences appropriately (Steiner and Steiner, 2005).
Apart from this, changes & volatility in the external market forces like political changes,
emission standards, environmental policy, introduction of advanced and latest techniques, new
UK regulatory framework & laws will have a diversified impact on UK establishments like
Primark. Moreover, with the recent refendum, now for every movement of goods to other EU
countries, Primark will have to pay tariff duties and results in lower return. Moreover, latest &

modern technological adoptions due to obsolescence will enable firm to outperform over the
rivalries like Sainsbury & others. Further, earlier being a member of EU, it was accountable to
follow up EU rules, now, after separation, new domestic laws & regulations will be developed by
UK from which Primark needs to be adhere in regular practices. Despite this, waste disposal,
recycling strategies, sustainable environmental policies to reduce emission needs to be followed
for keeping environment safe.
.
Task 4
4.1
To: UK companies
From: Market analyst
Date: 13th February 2017
Subject: Importance of international trading practices
Global trade refers to activity where the exchange of man, money & material between
various nations without so many hurdles. It is important for each and every country that
international trade played an important role in growth of that country. EU is one of the biggest
and effective trading bloc as compare to other like NAFTA, EFPA etc. As we know that UK is
part of EU is has several advantage for their organizations they can get law labour in developing
countries like India and China. Another important thing is in international trade that UK can get
more competitive advantage over other countries. Competitive advantage like skilled labour
force, huge experience in various industries like precious metals, gems, machinery, aircraft,
engines etc. As the part of EU they can get more foreign direct investment that can help their
economy.
UK based organization also get huge market within EU and other developing countries
like China, India, Indonesia and other countries (Bitzenis, and Nito, 2005). But after Brexit it can
be adverse impact on EU organizations which is not good for their economy because already lose
huge market like EU.
4.2
To: UK companies
From: Market analyst

Date: 13th February 2017
Subject: Impact of global market forces on UK corporations
There are enormous global factors which is directly & indirectly affects the UK businesses
explained here as under:
Political factors: As we know there is political instability in various Middle East countries
which can be impacted to the UK Business organisation.
Legal factor: EU bilateral and multilateral agreements and treaty with various countries
give advantage of UK but after Brexit they can faces legal hurdles for new business.
Economical factors: EU one of the largest economy in the world combinable. So that it is
great impact on UK economy and their business organisation. Because if any member country
faces economic crises than EU members will support them. But after Brexit they must lose
market as well as economic support for their industries.
Social factors: Under this, growth in population, change in preferences & attitude of the
users, living style, perception and many other factors are included.
Technological factors: Technological upgradation, advancement, innovations in the
manufacturing process, new techniques have a wider influence on strengthening the
competitiveness.
Global economic crises: Global economic crises another reason which is directly impact
on UK business organisation (Hazlina Ahmad, 2010).
Effect of global factors on the UK businesses
 In order to satisfy all the audiences, businesses have to tailor changing buyer preferences
& demands and render services accordingly to strengthen their audience base.
 UK corporations have to consider laws and follow the same while carrying out their
regular business practices & functions to eliminate the possibility of any legal
consequences.
 As a result of EU separation, UK firms will be accountable to pay tariff charges while
merchandise operations with the other EU nations.
 UK businesses have to upgrade their technologies & accept new, modern & latest
equipments & techniques like online delivery, 24 hour Check-out, CRM, web 2.0
technology & others to stay in tough competition.
 After refendum, UK companies will be strictly adhere with the new domestic legislations

& political rules and framework.
4.3
To: UK companies
From: Market analyst
Date: 13th February 2017
Subject: Impact of EU policies on UK corporations
EU policies have a strong impact on UK business organizations. Because each and every
member of EU is bind to follow and adopt all policies and regulations of EU without any
national legislation. There are following policies which impact the UK business organization:
Employment policy: There are employment policies regarding the new jobs which is
set by EU. So that it can adverse impact on the UK business organisation.
Regional policy: There are various policies regarding the unemployment and rural
development of some parts of EU. Therefore UK also contributes for development on these area
which is not good for their business organisation.
Inflation policy: Inflation policy of EU is compulsory adopted by each and every
organization. Which can be adverse impact on UK based industries.
Taxation policy: EU governmental bodies set tax rate which is paid by UK organisation
(Chow and et.al. 2012). Sometimes theses tax rate is too high which reduces their profits.
International policy: The policies regarding international trade and business is followed
by every member of EU. UK also follow these international treaties as well, sometimes which is
not good for their business organisation.
Environmental policies: Recently EU made a new policy regarding environment
protection. These policies are must follow by the each and every business organisation of EU.
UK business organisation also adopted these polices which is not good for their industrial
growth.
CONCLUSION
From the above report, it has been observed that Primark offers highly fashionable
clothes to the customers by meeting their expectation level to a great extent. Further, it can be

revealed from the report that retail or fashion industry is facing issues due to the changing
expectation level of customers. It can be seen in the report that internal and external business
environment closely affects the smooth functioning of business operations and functions. In this,
by taking into account strategic framework Primark can achieve its goals and objectives. It also
has been articulated that international trade is highly significant which in turn enables firm to
maximize its productivity and profitability.