Business Environment Analysis of Primark: PESTLE, Leadership Style, CSR, Brexit and Covid-19 Effects

This report analyzes the business environment of Primark, including PESTLE analysis, leadership style, CSR, and the effects of Brexit and Covid-19 on the company's business. The report suggests that the company should adopt technology and digitalization, focus on CSR activities, and become socially responsible towards the environment and society.

Context of business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Conducting PESTLE analysis.....................................................................................................1
Analysis and recommendation of leadership style for primark..................................................3
Changes in corporate social responsibility of primark. ..............................................................5
Effects of Brexit and Covid-19 pandemic on company's business.............................................6
CONCLUSION................................................................................................................................8
References:.......................................................................................................................................8

INTRODUCTION
Business environment includes various factors that influence the business operations in different
ways. It consists of the process of decision making of the business organization which is being
taken by the top level management of the company. In order to achieve the desired outcomes,
every business organization is required to keep a regular check on the performance of the
company. Primark company is selected to understand the concept of business environment. It is
associated with fashion and clothing industry of the United Kingdom. It was established by
Arthur Ryan in 1969(Grail, et.al, 2020). it is situated in Dublin, Ireland. The company is a well
known recognized brand all over the globe. The report will evaluate the external and internal
components that influence the business activities of the business organisation by doing PESTLE
analysis. It also provides suggestions regarding suitable leadership style which helps in acquiring
the aim and objectives of the company. It will perform a critical evaluation of the CSR(corporate
social responsibility) in context of the Primark company. Further, it will also explains the effects
of Covid 19 and Brexit in the year 2020-2021 on the chosen business organisation that is
Primark.
MAIN BODY
Conducting PESTLE analysis.
The PESTLE analysis helps the business enterprises to identify and examine the various external
elements that affects the business activities of the organization in multiple ways. As the
companies cannot control the effects of these elements but can mitigate the risk by performing
the PESTLE analysis. These factors mainly affects the administrative functions of the company.
It is a technique that is used to proctor all those components that lays adverse effect on the
business(McConalogue, 2021). In relation of the Primark company, the administration of the
business organization can utilize this method to determine the impact of the external elements
on the commercial operations and the decision making process of the company. The analysis
done in context of Primark is as follows-
 Political factors – all the political factors that influence the functioning of a business
organization falls under this category, such as, various policies and rules of the
government, tax policies, change of power, different political decisions, etc. All these
factors negatively affect the all over development of the business enterprise. In relation to
1

the Primark company, the separation of Britain from European union has affected the
growth of the economy of the country where various business organizations have lost
their connection with the companies that are situated in the member countries of the EU.
The taxation policies of the country are also revised after Brexit.
 Economical factors – the various economical changes in the country also impact the
business activities of the business organizations. Such as, GDP rate, employment ratio,
per capita income, interest rates, inflation, etc. In the context of Primark company, the
business operations are majorly affected by the pandemic that is Covid 19 and Brexit.
The monetary flow in the economy was highly affected by Covid. Due to which the
prices of the goods increased and the company was unable to meet the demands of the
consumers. There is a dis balance created in terms of currency at international level.
 Social factor- the changes in the likes and dislikes, needs and preferences of the
customers also affect the functioning of the administration of the business organisation.
The companies are unable to deal with the demands of the consumers. This directly
influence the efficiency of the business(Hamilton and Webster, 2018). In terms of the
Primark company, the supply chain was weak and because of which the company is
failing to fulfil the requirements of the customers. They are not able to figure out that
what exactly the consumers are demanding. The company is not following the latest
market trends.
 Technological factor- the companies are required to adopt the changes that has been
introduced in the field of technology. In today's era, each and every individual has access
over social media and other digitalized platforms. This has also changed the shopping
style of the customers . Now, the people are choosing the online sites for the purpose of
shopping. In relation with the Primark, the company requires a technology expert who
can manage the online site of the company and list the product on those sites so as to
enable the consumers to perform window shopping(Lea, 2019).
 Legal factor- the legal factors also affects the administration of the business in one way
or the other. Like, right and duties of the employer, healthy and safe working
environment, etc. The company must follow the rules and regulations mentioned in the
various statutes that govern the employment and business sector of the country. In
context of the Primark company, in order to avoid any kind of legal consequences, the
2

company must comply with the necessary rules and norms that are being set by the
government. But the changes in the taxation policies, trading laws after the separation of
Britain from the EU has adversely affected the business of the Primark company.
 Environmental factor- the various environmental factors that influence the business
activities of the companies are global warming, pollution, climate change, natural
disasters like flood, storm, tsunami, etc. All these components obstruct the production
process of the company and the transportation of manufactured goods are also get
affected by such elements. The Primark company has introduced the green policy which
prevents any type of harm to the environment. The company is also taking steps in order
to become environment friendly.
Analysis and recommendation of leadership style for primark
An individual can become a good leader if it posses the capability and potency to improvise the
performance of the employees and enhance their ability to tackle the complex tasks. They are
responsible for achieving the desired target for the company by encouraging the employees to
work favourably. The leader has the capacity to change the expectation of the company into
reality. There are various leadership styles that are being utilized by the leaders in order to
motivate the employees or the workers of the company. This will help in maintaining a healthy
and effective working environment in the company. In relation with the leadership style,
Goleman's leadership style has been chosen for the particular company(Gupta, Gupta and Gupta,
2019).
This particular leadership model is being opted in terms of maintaining the spirit of leadership
among the individuals who have the responsibility to direct and manage their respective teams
in order to perform with efficiency and effectiveness so that the company can achieve the set
aims and objectives.
 Affiliative leadership- this style of leadership focuses on creating a harmonious
construction in the organization. It believes in eliminating the pessimistic environment
from the company. The leaders use to encourage their respective teams to build a sense of
unity and cooperation among them. The team leader also tries to avoid any kind of
dispute among the employees and in case if any conflict arise, the team leader will settle
the dispute in an effective manner.
3

 Democratic leadership- this style denotes the spirit of democracy in the organization
among the employees, where the employees use to participate in the decision making
process for their teams and share their opinions and views on the different aspects of
business(Thomas, et.al, 2021). The team leader also welcomes the new entry or any type
of collaboration with the other team in order to achieve the particular target. The
company rely on the skills and knowledge of the employees and the work of a team
leader is to focus on the enhancement of the expertise of their respective team members.
 Commanding leadership- the leaders of the organization provides a specified
time limit in which the employees are required to complete the assigned tasks without any
excuses. This particular leadership style is being used when there is some urgency arrives
in order to complete the specific task. Basically, the team leader dictate the work which
has to be done by the members of the team.
 Pace setting leadership- in this style of leadership, the team leader is concerned with the
quality of work. They expect that the employees must perform well with proper diligence
in terms of producing best outcome for the company. According to this style, the team
leader makes sure that the productivity of each and every individual must be fully
utilised(Achinas, et.al, 2019).
 Authoritative leadership- this leadership style is focused on working with
optimistic behaviour in a positive working environment. This helps in setting goals for
the employees in terms of improving their skills. It will also assist to build a healthy
relationship between the team leader and the employees.
 Coaching leadership- according to this leadership style, the team leader will
analyse the strong and the weak areas of the employees in order to make out those areas
in which the employees are required to build the expertise. This particular style helps in
gaining more skills and knowledge among the members of the team.
According to the above observation, Primark company should choose the authoritative style of
leadership. As the company was highly affected by the separation of Britain from the European
union, they need some sort of motivation and positive environment to start over the work once
again with full energy. The team with such encouragement will be able to work more efficiently
and effectively. This will ultimately helps in yielding high rate of productivity which
automatically increases the sales and profitability of the company.
4

Changes in corporate social responsibility of primark.
The concept of Corporate social responsibility states that the organization must perform its
business operations without harming the society and the environment. The business activities of
any company or industry includes the manufacturing and the production of various goods.
During the process of manufacturing the industries produce many harmful gases and chemicals
which are openly released in the environment (Panzone, Larcom and She, 2021). These activities
causes air and water pollution in the environment. The society which is a part of this
environment also faces the repercussions of such hazardous activities. In order to reduce all these
harmful effects, the business organizations must adopt the strategy of CSR in order to make the
society a better place to live in. It also helps in building a brand name of the company. It also
assist in maintain g a healthy relationship with the employees, buyers, suppliers, etc. The
companies by adopting the CSR measures ensures that their activities are not harmful to the
environment as well as to the society. There are various types of CSR, such as economical
responsibility, social responsibility, environmental responsibility, ethical responsibility and
philanthropic responsibility. The economical responsibility means that in what manner the
business will contribute to the economy of the country. Ethical responsibility means that the
company must follow certain principles and ethical standards while performing their
commercial activities. The philanthropic responsibilities are those which includes the charity and
social work done by the companies through various non- governmental organizations . Some of
the organizations runs their own charity trusts so as to contribute in the CSR activity.
In order to maintain the brand name, the company is required to undertake the Corporate social
responsibility. The business organisation must adopt CSR policies and measures and become
socially responsible in terms of obviating the risk of pollution an other pernicious activities. It
will help in achieving the aim of social welfare (Cummins, et.al, 2020). The CSR is the self
governing business structure which can assist the organization in fulfilling the responsibility
towards the environment and the society. There are different types of CSR which are being
discussed below-
 Environmental responsibility- the organizations must adhere with the laws that
are made in order to protect the environment. It is essential for the business enterprises to
adopt various measures in order to reduce the pollution and degradation of resources in
the environment. In context with the Primark company, the managerial body of the
5

organization must concentrate on promoting the social well-being and environmental
welfare. The company should contribute to the environment by taking part in the eco
friendly activities and also provide financial support to the NGO's who are working for
the betterment of the environment.
 Ethical responsibility- the organizations must follow the fundamental principles and
ethical standards of the business while carrying on various functions or activities of the
enterprise. The company must not promote any sort of irregular or unlawful activities in
the organization, such as discriminating the employees on the basis of gender, sex, age,
race, religion, etc. The company must provide wages or salary on time. In terms of
Primark company, the administration of the company is concerned with maintaining a
healthy relations with the suppliers and the employees of the company. This will enhance
the profit maximisation and sales of the organization(Mitchell, et.al, 2020).
 Philanthropic responsibility- the organizations are responsible to contribute in
the various social welfare and charity activities, such as helping the underprivileged
children by providing them food, shelter, education, etc., by getting involved with the
NGO's who are working in the area of charity and social well-being. In terms of the
Primark, the company should encourage the activities which includes social and
charitable work. The organization should volunteer the charity programs in order to raise
their concern towards the social welfare.
Effects of Brexit and Covid-19 pandemic on company's business.
The business organizations in United Kingdom are highly affected by the separation of Britain
from the European union in terms of trading, buying and selling of goods, import and export of
various products, supply chain of the companies, etc. The European union consists of various
states and Britain was one of them. The separation affected the retail industry of the country to a
great extent(Sayyida, et.al, 2021). When UK was a part of the union, it has entered into various
trade agreements with the other member states. But after exiting the union, all those trade deals
were also got affected. For the free commercialisation and reciprocation of different business
transactions, the EU has provided an open market to the member countries to perform all the
business related operations. The companies in the UK has developed a large customer base in the
different countries when it was a member of the union. It helped the companies to build a
positive image in the eyes of the customers. And after exiting the union, the retail company that
6

is Primark has to form a new consumer base on its own in the different countries other then the
member states of the EU. It also affected the economic stability if the country where the prices of
the goods increased, the country faced a downfall in the currency. The Primark company has
experienced many challenges during this period such as, weak supply chain, constant hike in the
prices of the products, it was unable to meet the demands of the consumers, etc. The trade
policies, taxation policies and license policy has been changed after Brexit due to which the retail
industry has to undergo many changes. In order to pay the taxes according to the new taxation
rules, Primark company has been forced to increase the prices of the products. This leads
towards the dissatisfaction of the consumers (Allas, Canal and Hunt, 2020). Now, the Primark
company is required to register itself according to the new license policies. The supply chain of
the company has become weak and because of which the company is unable to meet the
requirements of the consumers and were failed to fill the retail stores with the sufficient quantity.
The effects of Covid 19 on the Primark company were severe. The period of pandemic was
served as a curse for every type of business activities. Primark is a well known brand name in the
UK which is associated with the fashion and clothing industry. But during the period of Corona,
the government restricted every movement of goods and services along with the people. The
retail industry of the country is totally dependant upon the retail outlets that are located in
different region of the country as well as outside the country. And due to the restriction, no one is
allowed to move out(Casadei and Iammarino, 2021). The people are not able to access the stores
in order to buy anything. The company cannot list the products on the online platforms as the
delivery of the goods is not possible in the pandemic. This has affected the sales of the company
to an extent and it directly influenced the demand and supply of the goods.
The company Primark, has now adopted various marketing strategies in order to overcome the
impact of Brexit and Covid 19. it has started using its brand image to attract the existing
consumers. The company has started working on meeting the requirements of the consumers by
analysing the preferences and needs of the clients in overall domestic as well as the international
market(Fernandes and Winters, 2021).
7

CONCLUSION
The conclusion drawn from the above report is that the business environment includes various
factors that influence the business operations in different aspects. In order to perform well in the
global as well as in the international market, the business organizations needs to adopt suitable
marketing strategies . There is a tool which can be used to foresee the risk of the external factors
on the commercial activities of the company, that is PESTLE analysis. It helps in eliminating the
negative impact of the external elements on the business enterprise. This report also provide
recommendations in order to opt for the most suitable leadership styles which will help in
achieving the desired goals of the business. It also states the contribution of corporate social
responsibility while performing various functions of the business. Further, it also explains the
effects of Brexit and Covid 19 on the business operations of Primark.
8

References:
Grail, J.,et.al, 2020. Business improvement districts in the UK: A review and synthesis. Journal
of Place Management and Development.
McConalogue, J., 2021. Understanding UK strategic dependence on Chinese investment: the
case for ‘Partial Decoupling’.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Lea, R., 2019. The UK as a place to do business: still very highly regarded
internationally. Arbuthnot Banking Group, 4.
Gupta, A., Gupta, N. and Gupta, M., 2019. British Airways-A SWOT and PESTLE Analysis-The
impact of Europe 2020 policy. NOLEGEIN-Journal of Corporate & Business Laws, 1(1), pp.1-
11.
Thomas, P.J.M.,et.al, 2021. A PESTLE analysis of solar home systems in refugee camps in
Rwanda. Renewable and Sustainable Energy Reviews, 143, p.110872.
Achinas, S.,et.al, 2019. A PESTLE analysis of biofuels energy industry in
Europe. Sustainability, 11(21), p.5981.
9

Panzone, L.A., Larcom, S. and She, P.W., 2021. Estimating the impact of the first COVID-19
lockdown on UK food retailers and the restaurant sector. Global Food Security, 28, p.100495.
Cummins, S., et.al, 2020. COVID-19: impact on the urban food retail system and dietary
inequalities in the UK. Cities & Health, pp.1-4.
Mitchell, R.,et.al, 2020. The impact of COVID-19 on the UK fresh food supply chain. arXiv
preprint arXiv:2006.00279.
Sayyida, S.,et.al, 2021. The impact of the COVID-19 pandemic on retail consumer
behavior. Aptisi Transactions on Management (ATM), 5(1), pp.79-88.
Allas, T., Canal, M. and Hunt, V., 2020. COVID-19 in the United Kingdom: Assessing jobs at
risk and the impact on people and places. McKinsey and Company.
Casadei, P. and Iammarino, S., 2021. Trade policy shocks in the UK textile and apparel value
chain: Firm perceptions of Brexit uncertainty. Journal of International Business Policy, 4(2),
pp.262-285.
Fernandes, A.P. and Winters, L.A., 2021. Exporters and shocks: The impact of the Brexit vote
shock on bilateral exports to the UK. Journal of International Economics, 131, p.103489.
10