Primark's Subsidiary and EU Influence

This assignment explores Primark's subsidiary organization purposes, contrasting them with cooperatives, public limited companies, and non-profits. It examines stakeholder preferences and the role of international trade in business expansion. The focus also extends to the impact of EU policies on UK businesses, highlighting their influence on employment, education, taxation, and regional development.

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BUSINESS ENVIRONMENT

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Table of Contents:
Introduction:...............................................................................................................................2
Task 1.........................................................................................................................................2
LO1 Understanding the organisational purpose of businesses..................................................2
1.1 Identifying what kind of organisation is Primark and discussing its purpose:....................2
1.2 Describing the extent to which Primark meets the objectives of its different stakeholders:2
1.3 Explaining the responsibilities of Primark as an organisation and the strategies employed
to meet them:..............................................................................................................................2
LO2 Understanding the natures of national environment in which businesses operate............2
2.1 Explaining the types of economic systems operated in Cuba, United Kingdom and China
to allocate resources effectively with proper reasons:...............................................................2
2.2 Assessing the impact of fiscal and monetary policy on farming and housing:....................2
2.3 Identifying competition policies and regulatory mechanisms in the UK and evaluating
their impact on the activity of Primark:.....................................................................................2
LO3 Understanding the behaviour of organisations in their market environment.....................2
3.1 Explaining how pricing and output decisions of businesses are determined in perfect
competition, monopoly, oligopoly and duopoly market structure:............................................2
3.2 Illustrating the ways in which market forces like demand and supply share organisational
responses using a range of examples:........................................................................................2
3.3 Judging how the business and cultural environments shape the behaviour of Primark:......2
LO4 Be able to assess the significance of global factors that shape national business activities
....................................................................................................................................................2
4.1 Discussing the significance of international trade to UK business organisations:...............2
4.2 Analysing the impact of global factors on UK business organisations:...............................2
4.3 Evaluating the impact of policies of EU on UK business organisations:............................2
Reference list:...........................................................................Error! Bookmark not defined.
Appendices.................................................................................................................................2

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Introduction:
There are many internal as well as external factors like clients and suppliers,
competition, technological factors, political factors, economic factors and social factors that
have a large impact on the businesses. It has been found that Customer’s demands are
changing rapidly and several legislations have been developed by the government that must
be followed by all the business so they must try to adopt new strategies to overcome such
issues to run their business effectively.
Market trend and governmental activity play significant role to change the business
activity. This study has focused on explaining the purpose of Primark as a cooperative
business and it also describes the purpose of private sectors, non-profit organisation. On the
other hand, it places an emphasis on evaluating the competition policies and regulatory
mechanisms and the impact of monetary and fiscal policies on farming and housing. Apart
from that, the study also shows that the significance of international trade on UK
organisations.
Figure 1: Logo of Primark
(Source: Primark.com, 2016)

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Task 1
LO1 Understanding the organisational purpose of businesses
1.1 Identifying what kind of organisation is Primark and discussing its purpose:
It has been seen that Primark is a subsidiary company of the Associated British Foods
and it runs their business with the help of their suppliers. It that case, goods are not
manufactured by Primark but the suppliers from Europe and Asia help Primark to
manufacture goods (Primark.com, 2016).
Primark values for money so they deliver their goods at low cost by understanding the
needs of the customers. When Primark works with the suppliers from different countries then
several people from those countries get job opportunities. In such way, Primark creates job
opportunities in different countries to develop the economic state of those countries. Primark
is a private limited company.
Being a private company, Primark follows the basic principles that are followed by
the private companies. The private company make all the decision by considering the size of
their capital. The main aim of the private companies is to increases their profits by reducing
all the other financial barriers.
Dividends as well as investments are also involved in the principles that are taken into
consideration by the private companies. The major objectives of the private company are to
maximise the level of profits, structuring proper organisational structure to earn huge profits,
to maintain transparency in the case of financial reporting etc.
Discussing the purpose of public sector, cooperative and non-profit organisation:
NHS is a public-sector organisation and controlled by the state, national, provincial
and local government. The purpose of the public-sector organisation is to provide necessary
services to the public, not focusing much on earning profits. Public sector has a large impact
on economic state of a country and various governmental services are provided by the public

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sectors. Kearney and Mareschal (2014, p.154) stated that public sectors focus on providing
benefits to the society.
On the other hand, NHS allows the public to access health care free of charge and
NHS also assesses the medical requirement of the communities living in a specific area. NHS
does not allow the care homes to entertain any kind of discrimination within the organisation.
All the people from different caste, race, gender, age group, religion and region must be able
to access medical treatment so it can be said that NHS also plays an important role to ensure
the betterment of the society.
British Red Cross is a non-profit organisation, and their purpose is to serve the people,
they do not focus on earning profits. The Non- Profit organisations mainly functions by the
donations that are provided by the government, individuals or other business organisation.
The donations that are provided to the non- profit organisation are kept separated from the
hold of taxation, to encourage the business organisations, as well as, individuals to provide
service to the public via non- profitable organisation.
Government provides financial support to the non-profit organisations to proceed with
their job. British Red Cross helps the people, who are suffering from crisis and they do not
entertain any kind of discrimination. Therefore, they try to empower the communities to
mobilise their power to resolve the crisis faced by them. It also provides help and support to
the people, who have badly injured due to road accident or fire.
Cooperative Press can be considered as the cooperative enterprise and the aim of the
enterprise is to help communities to publish the cooperative news. Nembhard (2014, p.174)
stated that cooperatives can be considered as the autonomous organisation that work for the
fulfilment of several needs like economic needs, cultural as well as the social needs. Non-
profit community may work with the cooperatives and cooperatives run their business by
taking help from others. They must not run their business to make profit only but they try to
provide beneficial opportunities to the society.
1.2 Describing the extent to which Primark meets the objectives of its different
stakeholders:
Stakeholders are the most important part of any business organisation. The growth of
the organisation is completely depended on the growth, as well as, the satisfaction of the

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stakeholders of that company. Stakeholders are the customers of the company, the employees
working in the organisation, the suppliers, and the directors of the organisation etc. all the
individuals, as well as, other business organisation those who are linked with the company
are considered as the stakeholders of the company.
The stakeholders’ objective is to earn benefit with the growth and development of the
organisation. We can say both stakeholders and the organisation walk hand in hand in the
profit earning market. Both are directly proportional to each other; stakeholder’s satisfaction
increases the organisations’ profit and stakeholders’ dissatisfaction reduces the organisations’
growth and development.
There are several internal and external stakeholders are involved in the business
activities of Primark. The internal stakeholders of Primark are the managers, employees,
owners, trade union and the external stakeholders are the government, non-governmental
organisation and communities. Carvalho and Jonker (2015, p.79) stated that the needs and
interests of different stakeholders must be different and all the needs of all stakeholders must
be fulfilled to make them satisfied.
Internal as well as the external stakeholders play an important role in operating a
business smoothly. In that case, Primark tries to understand individual’s needs and based on it
Primark makes final decision to satisfy all the stakeholders because the stakeholders are
committed to the organisational success.
It has been found that the suppliers want to make profit to enhance the production of
the fashion clothes. On the other hand, the customers prefer purchasing high quality products
at low cost. In that case, Primark tries to understand the changing demand of the customers
and their purchasing capacity and based on it they deliver the products to them.
Primark encourages the suppliers to manufacture more products maintaining high
quality to make more profit. Apart from that, the shareholders want to increase share in the
market and to do so Primark tries to increase sales revenue based on the demand of the
customers. Sendyona et al. (2016, p.180) commented that, all the organisations must need
governmental support while operating their business internationally or domestically.
In that case, Primark is abided by several legislations developed by the government.
To get governmental support Primark tries to maintain a good relation with the government
by paying a specific amount of tax based on their sales revenue and profit. On the other hand,

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trade union leaders often claim more leave, calendar holiday, increment, insurance and
reward based on their performance from Primark and then Primark listens to them properly
and decide in favour of them to make them feel satisfied by avoiding any kind of internal
conflict that can hamper the business activity of Primark.
1.3 Explaining the responsibilities of Primark as an organisation and the strategies
employed to meet them:
Per Mitchell et al. (2015, p.870), all the organisations must perform their duties to
make all their stakeholders motivated and satisfied. Being a private limited company, Primark
have some responsibilities, such as the organisation must focus on the demands, as well as,
the suggestions of the stakeholders, letting the stakeholders know all the necessary
information about the organisation, the organisation must also include the suggestions of the
stakeholders in the decision- making process of the organisation.
Therefore, Primark tries to make all the stakeholders involved in the decision-making
process. Primark obtains feedback from the customers to know about their satisfaction level
after purchasing and using their products. Primark also conducts survey to know about the
changing demand of the customers from different region. On the other hand, Primark believes
that stakeholders act like a heart within an organisation and without having their support and
contribution to business they cannot reach their business goal.
In such condition, they try to give equal importance and attention to all the
stakeholders. Rahimova et al. (2016, p.250) commented that the views and opinion of
different stakeholders must be different. In that case, Primark tries to obtain the views of
individuals on various issues and conducts conferences and seminars to make a beneficial
decision for business.
Primark encourages all the shareholders, employees and trade union to share their
skills and knowledge with others to enhance the performance of all. Apart from that, they
provide training programmes to the internal stakeholders to improve the knowledge and skills
of all to improve the business activity.
It has been found that when the stakeholders have been trained and capable of making
prompt decision then it can be resulted on the performance of the organisation. Primark tries
to comply with various legislations like Data Protection Act, Equality Pay Act 1970,

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Disability Discrimination Act 1995 and Equality Act and they do not entertain any kind of
discrimination within the organisation (Legislation.gov.u, 2016).
Moreover, the private limited company has many other responsibilities; one is to
provide the employees with proper training that they can work productively for the
organisation. Along with it, the organisation must also analyse the environmental condition
surrounding the organisation, and work towards the improvement of the environmental
condition, as healthy environment encourages the employees positively to work productively
for the company.
Primark tries to understand the needs of the employees and based on their demand
they adopt some strategies to satisfy their needs. Primark provides promotion, reward,
incentive, bonus and transfer in accordance with the performance of individuals to make the
employees mentally satisfied. It also provides harmonious working environment to the
employees and organises customer reward programme to hold their loyal customers.
The organisations’ strategy lies in including all the stakeholders in the decision-
making process of the organisation along with the improvement of the environmental factors,
and encouragement, as well as, better training of the employees etc. All these strategies help
the organisation to reach the pinnacle of success.
LO2 Understanding the natures of national environment in which businesses operate
2.1 Explaining the types of economic systems operated in Cuba, United Kingdom and
China to allocate resources effectively with proper reasons:
Economic system refers to the system of proper distribution of all the productions
that are produced in a country. The major objective of the economic system is to serve all the
people in the country or society, equally. The economic system can further be divided into
other systems; they are mixed economy system, free economy system etc.
The economic system that is used by China is mixed economic system. There are
many merits, as well as, demerits of these economic systems. The merits of the mixed
economic system involve the encouragement that it provides to the private sector
organisation, the efficient use of resources by organisation is also encouraged by functioning
of the mixed economy system.

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Along with the merits, there are other demerits of the mixed economy system. Such
systems are un- stable in nature, the planning that are done in this system are inefficient
planning etc. Another economic system is command economic system. Cuba uses Command
economic system. Command economic system is beneficial in this modern world because this
is a system where the goods or the products that are to be distributed among the people, are
determined by the government of that country.
There are many advantages, as well as disadvantages of Command system. The
disadvantages of command economy are that the government, which determines the
production of the country, always remain disconnected from the group of the customers, thus
unaware of their necessary demands. Command economy faces many surpluses, as well as,
shortages related problems etc. There are even many advantages in Command Economy, they
are the resources are received or mobilized very quickly; it is also beneficial for execution of
massive or huge projects etc.
Protectionist economy has been found it China and it has been seen that China
government encourages the foreign organisations to come and open a manufacture industry in
the country to resolve unemployment issues. In that case, the businesses can manufacture
goods in China with the help of labour market that is controlled by the government but they
are not allowed to sell their products within the country. Businesses easily can hire the
employees from the labour market in China at cheap cost due to high population to
manufacture more products (Bian et al. 2016, p.990). The China government provide support
to the foreign organisations in manufacturing products and the exchange rate is not stable
here. Therefore, many organisations face difficulties while expanding their businesses in
China.
Morris (2016, p.125) stated that Cuba is a developing country and its economic
condition is not stable at all so there are several people, who suffer from unemployment
issues. In that case, organisations, which want to establish their business in Cuba, can be
benefited from the labour market. In that case, they can use the jobless people at low cost.
Cuba government provides flexibilities to all the organisations to make more profit and the
businesses are not bound to pay high tax. Legislations developed by the Cuba government do
not hamper business activity of the organisations.

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Free trade economy can be seen in UK and UK government allows the businesses to
run their business effectively using their strength. UK government does not claim high tax on
revenue so the organisations can make more profit easily. On the other hand, there are many
organisations, which are competing so UK government developed legislation like
Competition Act 1998, to control competition among various organisations
(Legislation.gov.uk, 2016). In that case, the organisations cannot change any cost for the
products and they are bound to fix a price for all the products, which are similar available in
the market.
2.2 Assessing the impact of fiscal and monetary policy on farming and housing:
Fiscal Policy is meant to reduce the rates of unemployment, to stabilize the cycle of
business, as well as, to control inflation. This is done by adjusting the rates of tax as regulated
by the government. Fiscal policy embraces two different kinds of fiscal policy instrument like
revenue policy and expenditure policy that are available to the federal government.
Burns et al. (2016, p.370) mentioned that these two fiscal instruments depend on each
other. When personal income tax rates, indirect business tax rates, corporate profit tax rates
increase or decreases then it directly or indirectly hampers the economic condition of a
country so it can be said that all the people living in the country also have been hampered by
this situation. In such condition, their purchasing capacity can be enhanced or poor. When
expenditure of a country increases and disposable income starts decreasing then the economic
condition of the country becomes poor.
Monetary Policy refers to the action that is done to modify the supply of money that
will take place in an economy. The monetary policy is maintained by various actions such as
purchasing, as well as, selling the bonds of government, either increasing or decreasing
interest rates etc. Changes in monetary policy of a country can impact on mortgage
borrowing and household spending.
Abubakar (2016, p.152) commented that there is a link between house price and
monetary policy. In that case, it has been found that the price of the house increases based on
the monetary policy developed by the government. The monetary and fiscal policy must be
developed in favour of all the businesses to improve the economic state of a country. When

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fiscal policies have been developed effectively to increase purchasing capacity then they can
afford well built houses at any cost and any time. When the purchasing capacity of the people
becomes low then they cannot afford high price building and therefore no business
opportunities exist in the country.
When the promoters are bounded to pay more tax then they cannot provide huge
discount on every purchase. Apart from that changes have been seen in contractual interest
rates and lifestyle of the people. In such condition, availability of housing start decreasing so
automatically the price of the housings starts increasing.
Bell and Eiser (2015, p.214) added on that cash flow problem may arise capital that
has been invested in constructing the housing cannot get back until the complex is not sold.
Farming industries also can be affected by the Fiscal and Monetary policy.
If the farmers must pay more tax, then they cannot afford materials for harvesting
crops as per the demand of the customers. In that case, the price of the crops starts increasing
and the people do not have much ability to afford high quality crop at high price cannot
purchase these. In such situation, all the people may suffer from hunger and in this time
people can go to bed being starved.
2.3 Identifying competition policies and regulatory mechanisms in the UK and
evaluating their impact on the activity of Primark:
The competition policies that are followed in UK are Merger Policy, Collusive
Behaviour and the misuse of the market power. It has been found that retailers in the UK face
difficulties while running their business in the competitive market because there are several
potential entrepreneurs operate their business by adopting the same strategies, business
policies and the capital.
The major competitors of Primark are Marks and Spenser Group, Tesco Plc and Asda
Group Ltd so it can be said that Primark must try to survive in the market competing with the
rivals by enhancing the strength to use unique ideas, comfortable materials and convincing
pricing strategies. In such condition, Primark chooses fashion conscious market to enhance
their sales volume.
As per the Competition Act 1998, all the businesses must try to fix price of a product
and when necessary they can raise the price of the product together to handle the competition

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among several businesses. Jordà and Taylor (2016, p.255) stated that this legislation shows
that all the businesses must try to choose same mode of payment and the must deliver a
product within a time.
The legislation also allows the market to be split because this way would be helpful in
minimising the competition among the businesses belongs to the same sector. This legislation
was developed to punish the regulators, who are responsible for the market dominance. As
per the Enterprise Act 2002, all the businesses must operate their business being
independent without being influenced by the politicians.
The directors of an organisation can be sued or disqualified under this legislation if
they breach the rules of competition. On the other hand, the legislation allows the customers
to place their complaints against the unfair or uncompetitive practices done by the
organisation. Jude et al. (2017, p.870) commented that in the UK, the Department of
Business, innovation and Skills, competition commission and The Office of Fair Trading
undertake the Regulation of Firms and promotion of competition.
The Department of Business, innovation and Skills promotes fair markets to improve
skills and productivity. The department tries to make proper condition that must be suitable
for the business success and it also focuses on the betterment of economic performance of all
the regions in UK.
Apart from that, the office of Fair Trading (OFT’s) allows the business to put the
right trading practices based on the interest of the customers. Thereafter, anti-competitive
practices and abuse of market power can be investigated by OFT’s. In the context of Primark,
it can be said that they cannot set price as they wish but they set price of the products based
on the market price.
Apart from that, Primark complies with the legislations while operating their business
in the UK. However, they can set prices of the products based on the purchasing capacity of
the customers while operating their business internationally. On the other hand, Primark must
not entertain any kind of unfair practices in business.
Besides that, to provide the continuity of the business the management of the
organisation must boost the confidence of its employees which are considered as the building
blocks of success in the competition market. The management must be very concern
regarding cutting cost of the entire production which indicates as the effective competitive

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strategy. The enterprise and reform act (2013) is passed by the respectable UK parliament
in the collaboration with UK green investment bench. The main aim of the enterprise and
reform act as well as ERRA is to abolish operations of the competition commission.
Per the section 69 of ERRA the act takes special care regarding the health and safety
of the employees because the major existing secret of any organisation is huge numbers of
healthy employees. Due to respect of the acts, the employer of the organisation must be paid
compensation to the injure employees if they will suffer in the duration of its work period.
So, it is concluded that via the section 69, ERRA removes the liabilities of the entire
employees.
The management of the organisation must take the entire responsibilities of any kind
of the damage or injury of the staffs if they suffer for doing its tasks for the organisation. In
the perspective of Primark, the acts help the organisation to strengths on the diverse types of
anti-competitive behaviour. Furthermore, the act establishes the combination of competition
and market authority by collaboration with the functions both of competition commission
and office of fair trading. (Legislation.gov.uk, 2017)
To achieve the competitive advantages the management of some organisation often
offer bribery to the collect the secret information regarding the other organisation. By which
they can able to fix such reasonable price and quality of the product which easily attract the
attention of the buyers. The profits scale and reputation of the organisation has been
enhanced automatically.
To prevent such illegal and criminal practices in the competitive market the
respectable parliament of UK has been passed the Bribery act 2010 which was introduced in
2009 by queen speech. The acts consider more power full in four areas like, when one
individual offers bribery both foreign and public purposes, when one receive bribery to do
some unethical work, and when the organisation cannot be able to prevent the practices of
bribery exchanges in the society. In the perspective of Primark, the management of the
organisation can able to protect its company from this types illegal; practices and to enter fair
competition market. (Legislation.gov.uk, 2017)
There are different type of competition policy are used in UK, in this organisation can
categorize there goal in several ways. In this cartel, market liberalization, sate aid control are
involves in elimination agreement. There are new rules set to control the merger which

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change the company's organic growth. There are health and safe legislation applied for
mining companies. They follow anti-competitive behaviour etc. for there competitive growth.
LO3 Understanding the behaviour of organisations in their market environment
3.1 Explaining how pricing and output decisions of businesses are determined in perfect
competition, monopoly, oligopoly and duopoly market structure:
Perfect competition is considered as the market structure in which several different
sellers sell the same product having same purpose. Hall and Roelich (2016, p.295), stated that
when one type of product is available in the market then all the businesses try to set the price
of the products based on the demand of the customers. Prices are determined by
understanding the number of buyers and sellers in the market.
When a product is in high demand then the manufacturers set price that can be
affordable for the customers and the manufacturers must focus on increasing the production
of the products. In the case of Primark, they must try to manufacture more products if any
product is in high demand in the UK market but they cannot set high price for the product as
per the Competition Act.
However, when they would operate their business in other countries then they can set
high price for a specific product based on the customer’s demand. In that case, all the
business must know that all the customers are likely to purchase high quality product at low
cost.
Kuenne (2016, p.154) commented that in monopolistic market the marketers can set
whatever price for some products because here the customers do not have much option for
various products. In such market, prices of the products can be set by the organisations and
customers are bounded to purchase some specific products available in the market. In that
case, the organisations do not produce more products and they have limited stocks so
customers purchase those products as early as possible. In this situation, some of the
homogeneous products are available in the market, so that p-rice are fixed because each seller
have decided there price before and the p;rice was settle in every seller at a fix price.
Brander and Spencer (2015, p.165) added on that in the oligopoly market structure
there are several suppliers of some particular products so they are responsible to set the price.

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Apart from that, the suppliers in accordance with the purchasing capacity of the customers
charge same prices. The price of some specific products can be same like other products but
it can be varied based on its promotional activity. As Primark works with the help of the
suppliers, the suppliers must have control over the price. Belleflamme and Peitz (2015,
p.457) added on that in the duopoly market only two sellers are existed and they have a
control over the entire market. In that case, the sellers must decide to produce some or more
products at high or low price as per the market demand. In oligopoly market supplier fixed
the price of the some products, so that they cost at fixed price but other products price may
vary according to demand of customers and seller.
The monopoly market structure refers to such market which entirely dominates by a
single seller who sets an effective price as well as last price of the products which have no
close substitutes. Thus, the manufacturer of any products becomes the effective price maker
of the product and can able to maintain pretty price stability in the market. That is why one
and only firm sets the final price avoiding the competition market. In monopoly market a
single seller can affect the price of the product so that seller have full power to dominate the
price. In this p[rice are determined according to the customers. So that there will be always in
fraction of the price of the products.
The monopoly market structure belongs from the supernormal profits margins while
the owner of the organisation can able to invest that surplus money in the purpose of market
research and development. The organisation which belongs from the monopoly market
structure can able to offer better quality services as well as facilities to its customers in a
lower price. The satisfaction level of the customers can be increased which should the motto
for every organisation apart from its profits margin.
Last of all the Duopoly market structure are the next to same to the oligopoly market
structure which consist two competitors. The pricing strategy of the duopoly market structure
is dominated by two manufacturers. The opportunities of cultivating independence have been
increased in this market structure.
3.2 Illustrating the ways in which market forces like demand and supply share
organisational responses using a range of examples:
Demand and Supply are directly proportional to each other. When the demand of the
products increases then automatically the supply of the products must be increased.

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Brander and Lewis (1986, p.970) stated that the manufacturers try to make the products
available in the market to make several loyal customers, who contribute to the organisational
success. On the other hand, all the organisations try to keep their loyal customers by meeting
their needs.
In case of Primark, it has been seen that they manufacture products based on the
customer’s demand and they try to make the customers feel happy while shopping with them.
When Primark sees that the products offered by them is not in demand but the same products
offered by the competitors is in demand then they try to provide discount on repeat purchase,
gift coupon, special offer on every purchase to increase the sales value to make more profit.
[Refer to Appendix 1]
Christopher and Towill (2001, p.140) stated that once the customers do not feel
interested in any products they stop purchasing the products naturally. In that case, the
product is kept by the organisation and after some days they launch those products in the
market by providing special offer like by one get one free and get 50% extra on purchase.
Then the customers again start purchasing those products repeatedly.
For example, when McDonald’s offer a Hamburg at 50 rupees then many customers
may want to purchase it but when they offer Hamburg, coke and snacks at the same price
then several customers must not hesitate to purchase it. Thereafter, Christopher (2000, p.44)
added on that when supply of products start decreasing then the demand automatically
increases. Therefore, all the businesses must try to supply the products based on the
customer’s demand otherwise they can replace the products offered by them with the other
products offered by the rival organisations in the market.
If there is no option to replace one product with another then the businesses can limit
their stock like motor manufacturers and in such condition, the customers would wait for the
time by which the product must be available. Georghiou et al. (2014, p.10) commented that
economies of scale outsourcing can be adopted by the businesses to reduce their production
cost. When the production cost decreases then any organisations can offer products at low
cost. By adopting such strategy an organisation can sell bulk number of products to make
more profit.

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3.3 Judging how the business and cultural environments shape the behaviour of
Primark:
It is important for all the organisations to consider the external factors like political
factor, economic factor, social factor, technological factor and legal factor that affect the
business activity most before making a vital decision for the development of their
organisations. The cultural environment influences the behaviour of the organisation. The
elements of the culture such as the language used in the society, the education, the values, the
aesthetics, the religion, as well as, the material culture of any society influences the
marketing strategies that are followed by the organisation, so to meet the cultural demands
and earn huge profit in the field of marketing.
Political factor:
Park et al. (2013, p.80) stated that the political situation in UK is not at all
complicated but the situation is enough stable so the organisations, which are operating their
business in the UK can develop proper plan to ensure the development of the organisations.
On the other hand, UK government provides financial support to the organisations to make
more profit.
Apart from that, it can be said that many extents of business like education of
workforce, quality of infrastructure like rail and road system, water and electric can be
affected by the political decision. Zalengera et al. (2014, p.340) commented that there are
other factors like trade restriction, tax policy, environmental regulation and emplacement
laws also has a large impact on UK businesses. In such situation, Primark does not face many
difficulties while running their business in such politically stable environment in UK.
Economic factor:
Per Gillam and Siriwardena (2013, p.259), inflation rate, interest rates, wage rates,
unemployment level, credit crunch, exchange rate in UK are good position in the UK. Interest
rate in UK is not at all high so organisations must not pay much to the government as tax.
Therefore, they can offer high quality products at low cost top the customers to fulfil their
needs.
In the context of Primark, it has been seen that they can produce more products with
the help of labour market in UK and they are not bound to pay much tax to the government so
they can make more profit by running their business smoothly. As uncertainty, has been

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created by EU in financial market and business environment, Primark can be benefitted from
the exchange rate that continues in the UK.
Social factor:
It has been seen that the number of male as well as female customers, who suffer from
obesity are rising day by day in the UK. Fernie et al. (2015, p.198) commented that many
obese female customers do not prefer shopping with the retailers because they do not have
plus size ranges and sizes that can fit them. It has been found that other competitors like Zara
and M&S do not offer plus size ranges to the customers.
In that case, Primark must not ignore the issue but they must invest in plus size
clothing ranges to satisfy the obese customers. Apart from that, there are many aging people,
who earn high disposable income in UK and they love purchasing clothes through online. In
that case, Primark can utilise the trend to ensure their business growth.
Technological factor:
By using advanced technology an organisation can reduce the cost of the products and
they can produce more products at a time. Primark would be able to produce high quality
product through such technologies and they would be able to save time while delivering
products if they run an online shop promoting their products through website and internet.
They can use bar code, computer aided design and they can offer online shopping, online
transaction opportunities to the customers to make them feel happy.
Legal factor:
UK government has developed Workplace Pension legislations to make the future of
the eligible workers of all the organisations. In that case, Primark must contribute 3% of
company’s revenue to their employees to make the future of the workers secured.
LO4 Be able to assess the significance of global factors that shape national business
activities
4.1 Discussing the significance of international trade to UK business organisations:
World Trade Organisation influences the business in UK. World Trade Organisation
helps the UK businesses to settle all the disputes arising between them and help them toward

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the reduction of tension related to trade. It also helps in stimulating the growth in economy,
as well as, growth in the employment.
International trade can be defined as the way by which the organisations can buy or
sell their products across the national borders. Enderwick (2013, p.175) added on that
international trade is effective in making the economic status of a country strong by
enhancing the power of the organisations making a progress on international level. If the
organisations get the opportunity to display their products at international level then they can
make many loyal customers, who ensure the enormous success of the organisations.
On the other hand, it has been seen that international trade can be considered as the
backbone of modern world and all the marketers place emphasis on expanding their market
across the world (Dunning, 2012, p.154). International trade encourages the businesses to run
their business domestically and internationally and through it the marketers can maximise the
sales volume. In such condition, the organisations must know about the unemployment rate,
natural resources, business infrastructure and taste of the customers of different countries to
achieve their business goal.
On the other hand, the businesses must try to know about the purchasing capacity of
the customers and based on that they must charge cost for the products that have been offered
to the customers. For example, in the developing countries like India, China, Bangladesh and
Korea the purchasing capacity of the customers cannot be high and there are many people,
who are suffering from unemployment issues.
Therefore, the businesses must try to expand their business in the developing country
to produce more products by taking help from the human resources (Hamilton and Webster,
2015, p.169). When any organisation starts business in the developing countries they can use
the manpower of the country and in such way the country men can get job opportunities.
Thereafter, the businesses can get man power at low cost so they can develop their
business making business profit. In the context of Primark, the international trade plays a
significance role and it allows Primark to run their business with the help of the suppliers
from different countries even they manufacture their products in Bangladesh with the help of
the man power.

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4.2 Analysing the impact of global factors on UK business organisations:
In accordance with Dür et al. (2015, p.980), global factors have a large impact on the
businesses while trading domestically or internationally. Global Factors refers to all the
factors that influence the growth of business. Factors such as social, economic, legal,
political, as well as, technological are included within this global factors.
Education, international competitiveness, exchange rate, tax rate and business
environment are comprised of within the global factors. Primark also can be affected by the
global factors because they run their business domestically and internationally so they must
try to make ware of these factors to avoid some specific issues. While trading internationally
or domestically organisations must identify the number of the strongest competitors and their
strength and weakness to make a progress in business.
In the context of Primark, they must identify the competitors like Mark and Spencer,
Zara and Alda and they must try to know about their strength and weakness while competing
with them in the competitive market. If there is a strong competition among the competitors
within the market, then it would be difficult to survive in the international market.
Wallace et al. (2015, p.162) commented, that other factors like social, economic,
technological, social and legal factors also hamper the business activity of various
organisations. For example, when the organisations expand their business internationally then
they must know about the legislations, tax rate, and exchange rate of the country because it
may vary from one country to another.
Changes in exchange rate of UK can impact the business activity of the
organisations. Labour cost can be considered as another factor that can vary and the
organisations prefer operating business in those countries, in which labour cost is low to
reduce the production cost. In the case of Primark, it has been found that they run their
business in Bangladesh and they can easily make profit just because the labour cost in
Bangladesh is low.
4.3 Evaluating the impact of policies of EU on UK business organisations:
Brexit allows the UK to achieve immense flexibility over all the industrial policies,
however on the other hand UK loses all the benefits and the influence that it used to have

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from the EU. Economy system in UK is ideology based and it can be said that UK
government has the right to allocate resources as per the situational demand.
The UK government have the power to control the business activity and they act like
the owner of all the industries in UK. There are several policies like employment policy,
inflation policy, regional policy, taxation policy, education and training policy and
international policy that have been developed by EU that impact the UK business
organisations.
Gillam and Siriwardena (2013, p.253) stated, that employment policy was developed
to empower the employees, who find difficulties while performing their duties. In that case,
government took initiative to allocate fund for organising a training and development
programme to increase their competitiveness in the international market. On the other hand,
the regional policy was developed to help people from different regions suffering from
unemployment.
EU developed education and training policy to make changes in education and
training programmes. In that case, Organisations like Primark would be able to produce high
quality products with the help of skilled and knowledgeable employees. In such way, they
must be able to enhance their performance by fulfilling the demand of the customers in UK.
The taxation policy was developed to provide good business infrastructure to the
organisations by spending money on the construction of roads, airport and high way based on
the taxes paid by the organisations per year.
When businesses can utilise great infrastructure then logistic cost, production cost can
be reduced and they can make more profit. In that case, they do not hesitate to pay taxes to
the government within a specific time. Enderwick (2013, p.254) mentioned that there are
several legislations, which are newer and developed at EU to show the business the right way
by which the businesses must be conducted.
Conclusion:
This study focuses on the evaluation of the purposes of Primark as a subsidiary
organisation and the purpose of cooperatives, public limited and non-profit organisation. It

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has been found that the preferences and interest of the different stakeholders cannot be same
so all the organisations must try to fulfil their demand. Thereafter, all the business must try to
obtain opinion from the stakeholders to make them feel satisfied. Apart from that, it has been
found that international trade encourages the business to expand their business internationally
to increase the sales volume. EU developed many policies to ensure growth of the businesses
and they provide financial support to make all the employees skilled.

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Appendices
Appendix 1