Sustainable Business Practices and Primark

This assignment delves into the sustainable business practices employed by Primark, a leading global fast-fashion retailer. Students are tasked with analyzing Primark's initiatives related to environmental responsibility, ethical sourcing, and social impact. The analysis should draw upon relevant theories and frameworks like resource dependence theory, organizational creativity, and institutional-based antecedents. Additionally, students are expected to critically evaluate the effectiveness of Primark's strategies and propose recommendations for improvement.

BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Purpose of different type of organization .............................................................................3
1.2 Extent to which Primark meet the objectives of different stakeholders ...............................4
1.3 Responsibilities of Primark as an organization .....................................................................5
TASK 2............................................................................................................................................6
2.1 Different economic system ...................................................................................................6
2.2 Impact of fiscal and monetary policy ....................................................................................7
2.3 Competition policy ................................................................................................................7
TASK 3............................................................................................................................................8
3.1 Pricing and output decisions of business ..............................................................................8
3.2 Way in which market forces shapes the organizational response........................................10
3.3 impact of business and cultural environment ......................................................................10
TASK 4 .........................................................................................................................................11
4.1 Significance of international trade for UK business organizations ....................................11
4.2 Impact of global factors ......................................................................................................12
4.3 Impact of policies of EU......................................................................................................13
CONCLUSION .............................................................................................................................14
REFERENCES .............................................................................................................................15
2

INTRODUCTION
Global business environment is changing at a faster rate and it is providing opportunities
for selling products and services of the enterprise in new market area (Rusinaite, Vasilecas and
Kalibatiene, 2016). Present report is based on Primark which is a subsidiary company of the
ABF. Company works with an objective to bring positive improvements in the lives of people.
The report describes about purpose of different organizations. In addition to this, different
stakeholders of the enterprise and responsibilities of Primark as an organisation and strategies
employed to meet them have been mentioned.
TASK 1
1.1 Purpose of different type of organisation
Primark is a private sector organization that offers superior quality clothing and fashion
wear products to its consumers. Major objective of private sector organisations is to earn profits
and revenues by selling products and services to business consumers (PRimark, 2017).
Operations of the enterprise were started in the year 1969 and presently, there are 100 stores of
organization across Britain and Ireland. Company has become distinctive for offering unbeatable
values in products and services that are being offered by it (Primark women, 2017.).
Organization is known for fashion driven edge and innovativeness in products manufactured by
it.
Company is not involved in manufacturing activities and products of the entity are being
purchased from different suppliers. Profitability of the entity depends upon sheer volume of sales
and value for money prices of enterprise depends on low cost products that are being offered by
it. Major suppliers of company are in Europe and Asia and key sourcing countries are China,
India and Bangladesh. Main goal of private sector organizations is to earn profit, growth and
gain higher market share by satisfying the expectations and needs of consumers (Bocken, Rana
and Evans, 2013). Purpose of business organizations in following categories are mentioned as
below:-
The public sector: - Major objective of public sector organization is to earn profits and
revenues. They work with the mission to provide better amenities and services to people.
Partnership in these organizations is done with only few stakeholders. Managerial jobs are
3

created for owners and unnecessary risks are avoided in the enterprise (Vahlne and Johanson,
2013). Shares in public limited companies can be offered to the public and they are also traded
on the stock exchange. For example British council is a public sector organisation of UK.
Charity: - These organizations work with an objective to offer helping hands to the
needy people. These are non-profit organizations that work for making improvements in the
living standards of people (Chow and et.al., 2012). Some charity organizations also work for
providing protection to environment and giving welfare to animals. In addition to this, support is
also provided to needy people that are living in the society. For example Leonard disability is a
charitable organisation of UK that offers medical care for elderly people.
Cooperative: - These organizations start their functions by investments made by
members. The major objective of cooperative organizations is to earn profits by providing high
quality products and services to consumers. Focus is given on enhancing sales and financial
revenues that are being earned by the enterprise. Risk and losses suffered by the enterprise are
shared among members and profits are also divided equally among them (Paasi, Huhtilainen and
Nyst, 2012). Action plans and strategies are formed by the joint decisions taken by members for
executing operational activities of enterprise. Members of company that are working at lower,
middle and top level management takes decisions for carrying out business activities. Type of
co-operative organizations includes Worker-co-operative, Producer-co-operative and Consumer
co-operative (Khan and Khalique, 2014). For example The Co-operative bank is a financial and
banking service provider company of UK.
Franchise :- In this type of business system rights are given to another business firms for
selling products and services of the organization. It supports in saving investment cost for
starting business activities. Distribution of goods is done by another parties and chain stores of
enterprise are opened with objective to sell products and services of the organization.
Partnership :- Under this type of business system money and other resources are invested by two
or more business partners. Profits and losses that are occurred in the enterprise are divided
among business partners in the ratio of money invested by them to carry out business activities.
Two or more persons agree to carry on business activities under partnership.
4

Sole trader :- Under this business owner of the organization takes decisions for carrying out
business functions. Investments are made by owner and profits and losses that occurred in the
enterprise are kept by the sole trader. All the business functions are performed as per the
decisions taken by owner.
1.2 Extent to which Primark meet the objectives of different stakeholders
Stakeholders of Primark provides necessary resources that are required for carrying out
business activities in effectual manner. It is vital that involvement of stakeholders should be
taken for accomplishing the goals of business. Various stakeholders of the enterprise are:-
Owners:-They are the internal stakeholders of business who provide necessary resources
for executing required business functions. Investments are made by the owners for executing
required business functions (Csikszentmihalyi and Sawyer, 2014.).
Employees: - Positive efforts are given by staff members supports for accomplishing the
required targets and goals of Primark. All strategies and action plans formed by the top
management are executed by joint efforts given by employees. Wages and compensation are
given to employees as well as training and development programs are organized for rendering
the required skills and capabilities to employees.
Customers: - Superior quality products are offered by Primark and it aids in meeting the
needs and expectations of customers. Research and development department of the entity makes
positive efforts for adding new attributes and features in existing products that are offered to the
target market (Drees and Heugens, 2013.).
Suppliers: - Primark does not manufacture its products and they are purchased from
suppliers. Payments are made on due time and it supports in meeting the responsibilities towards
suppliers of organization.
Local community people: - Corporate social responsibilities (CSR) of the enterprise are
a medium for making positive improvements in the lives of people of local community
Shareholders :- Money required to start business functions is provided by shareholders
and Primark organization pay dividends to shareholders. In addition to that financial documents
showing performance of the organization are also provided to shareholders so that they can take
decisions for making investments in the organization.
5

Government :- Rules and regulations that are formed by state are properly followed and
all the business activities are performed in legal and lawful manner. Tax are paid on due tome
and it helps for ensuring economic growth of the nation.
Competitors :- Competitors are also major stakeholders of business and strategies and
action plans used by rival firms for selling their products are evaluated by Priamrk. It supports in
taking better decisions for performing business functions.
1.3 Responsibilities of Primark as an organisation
Primark as an organization has various responsibilities that are needed to be fulfilled by
the entity. It is vital that responsibilities of stakeholders should be duly fulfilled to keep them
satisfied. It is vital that objectives of different stakeholders should be understood properly. It
supports in meeting the responsibilities in effective way. Organisation is responsible to satisfy its
stakeholders by achieving what they want (Williams and Schaefer, 2013). Involvement of
stakeholders is taken in the decision making process.
It helps in identifying innovative ideas and concepts for carrying out the required
activities of business. Management of the organization takes initiatives for involving
stakeholders in the decision making process. Fair and transparent compensation is given to
employees and customers are provided with valid and reliable information about attributes and
features of products (Zhu, Sarkis, and Lai, 2013.). Innovative and fashion products are supplied
to buyers and it helps in accomplishing the responsibilities of stakeholders.
Strategies are formed by the management for meeting ethical responsibilities. Fair pricing
and contract policies are formed and it helps in meeting the ethical responsibilities towards fair
trade. Major focus is given on becoming a green organization and it aids in achieving
responsibilities towards environmental protection. Moreover, ethical marketing strategies are
used that aids in making honest claims in the promotion (Rosenbusch, Rauch and Bausch,
2013). In addition to this, Corporate Social Responsibilities (CSR) are executed in the entity for
meeting satisfying the consumers. Reasonable prices are charged for received and produced
goods and services. Environmental friendly products are made and sold that helps in avoiding
pollution. Care about well-being of people living society is made and support is provided to
needy people of community through CSR activities carried out in business.
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TASK 2
2.1 Different economic system
Primark sell its products in global market and different types of economic system exist in
different nations. Operational activities of the entity gets influenced due to the different types of
economic system exist in society. Economic system is defined as an organized manner through
which a nation makes allocation of resources and apportions products and services in national
community (Paasi, Huhtilainen and Nyst, 2012). Under economic system combination of various
institutions, entities and agencies is made which makes economic structure of the nation.
Different economic system that are followed in various nations are as mentioned :-
China :- Free economic system is there in UK and buyers and sellers can make deals for
making allocation of resources. Demand and supply are two forces that that control and regulates
market situations and all the resources are owned by private organizations and private
individuals. In this economic system products and other resources are allocated according to
decisions of consumers and individual producers (Cai, Feng and Zhang, 2016). Intervention of
government is less in the resource distribution in free economic system.
Cuba :- Command economic system is followed in Cuba and allocation of necessary
resources is done by state. In addition to that decisions on use are also made by the state.
Collection of statistical information is also done for making allocation of resources. All the
decisions for doing allocation of resources is done by government and private organizations play
fewer role in determining resource allocation (Chow and et.al., 2012).
UK :- mixed economic system is followed in the country and decisions about what to
produce and in how much quantity to produce are taken partly by government and partly by
consumer preferences. In how much quantity products need to manufacture is decided by
producers that seek profit and it is partly decided by government. This economic system
promotes efficiency in private and public sector.
Free market :- IN this market demand and supply are two major elements that determine price of
the product. Buyers and sellers takes decisions and it helps for executing required activities of
market. Open market and consumers decide price of the product.
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2.2 Impact of fiscal and monetary policy
In UK the Chancellor of Exchequer and the Bank of England play a critical role in
regulating the economy. Two most important tools that are used by them are fiscal and monetary
policies. These policies are framed by government for regulating the money supply in the
market.
Fiscal policy :- This policy is formed by government for controlling the spending of money and
overall control on the economic system of nation is ensured through it. Changes in government
spending is done and tax policy is decided under fiscal policy.
Monetary policy :- This policy is formed by government for stimulating the economic growth of
nation. This policy is set up by central bank and interest rates are changed by government
through monetary policy.
Impact of fiscal and monetary policy is observed on following type of business is as mentioned :-
Farming :- when loan rates are increased by government than due to that impact is
observed on people who are involved in farming business. Fiscal policy stimulates growth at the
time of recession and stabilization in economic growth is made and it helps in boosting economic
cycle. When loan rates are lower than people will less difficulty in taking loans for purchasing
required material and equipments for carrying out business functions (Botha, Kourie and
Snyman, 2014). When loan rates are high than due to that farmers and other people engaged in
farming business will face difficulty in availing equipments and machineries for carrying out
business functions.
Housing :- Housing industry also gets affected by changes made in housing policy and
monetary policy. If government charge high tax rates than due to that pricing of housing
improves and people get chance of availing better amenities in housing industry. If money
supply is increased in market than due to that growth of housing industry is stimulated.
2.3 Competition policy
Competition is a significant element that helps for ensuring efficient working of markets.
Different business organizations that are working in the industry are of different size and due to
that unfair competition is created in the market. In European nation competition policies are used
8

For encouraging and improving competitive process (Boons and Lüdeke-Freund, 2013). It also
aids in ensuring that consumers should feel the benefits that are associated with this process. Five
major competition policies are as followed :-
Competition act 1998 :- the act has been formulated by government to bring the UK in
line with the EU competition policy. Competition policies are formed by government for
ensuring that abuse of monopoly power should be reduced in the market. It is government
intervention for intervening and protecting the interest of consumers (Rusinaite, Vasilecas and
Kalibatiene, 2016.).
Collusive behaviour :- this type of behaviour occurs when organizations enter into
agreements for fixing price of the products and outputs. It also helps the firms for making higher
profits at the expenses of consumers.
Abuse of market power :- Abuse of market power is reduced and competition policy
helps for reduction in this element. Predatory pricing can occur when products are sold at lower
rates as compared to their market prices (Bocken, Rana and Evans, 2013).
Innovation :- Innovative concepts can be used by Primark company for providing
services and products in better and effective way. New innovations will support for offering
better commodities in market and due to that large market can be captured by the entity. It will
become possible for the entity to survive in the market by gaining competitive advantage.
Better and improved quality of products :- Competition policy helps for encouraging free
competition in market and due to that it will become possible for making positive improvements
in quality of products that are being supplied in market area (Vahlne and Johanson, 2013).
Wide choice :- When competition in market increases than due to that consumers will get
opportunities for purchasing wide variety of products to choose from. Buyers get chance for
choosing the products and services as per their needs and expectations.
Low price of products :- Competition in market creates challenges for firm to capture market
share and due to that it becomes challenge for the organizations for making reduction in price of
products that is being offered by them (Chow and et.al., 2012).
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TASK 3
3.1 Pricing and output decisions of business
Pricing and output related decisions of an organization gives impact on the market
structure and overall financial performance of the enterprise gets affected due to it. Demand and
supply are two major factors that gives impact on the manufacturing related decisions. Products
are in both tangible and intangible nature.
Perfect competition :- In perfect market competition there are large number of companies
and all tries for maximizing their profits and revenues. Buyers and sellers are having proper
details about products that are available in market (Paasi, Huhtilainen and Nyst, 2012). Demand
for products in market and supply of commodities are two elements that affect the price of
products and overall performance of the enterprise gets affected due to it. Decisions related to
determining price of products are not taken by a single individual and many people are involved
in this process. For example in perfect competition market many organizations offer their
products for business consumers and products are purchased by business consumers by
evaluating quality, quantity and price of the product.
Monopoly :- a single organization sell products and services and fewer competition are
faced due to which monopoly is gained and prices are determined by a single person. For
example rail transport services enjoys monopoly in market area (Khan and Khalique, 2014). If
high demand will be there for products than organizations will be having option for charging
higher price for products that are being manufactured and produced by them.
Oligopoly :- few organizations and small medium enterprise works in this type of market
and they capture huge market area by selling products and services. Price and quantity of
products is determined by organizations that are working in the industry. In oligopoly market
fewer competition is faced and due to that fewer challenges are faced by the organizations for
selling their existing products and services. Demand and supply of products gets affected by
demands and changes in expectations of consumers (Csikszentmihalyi and Sawyer, 2014).
Duopoly :- when two different organizations provide their services in market than it is
known as duopoly market. Wide variety of services and products are offered in market and it
supports for delivering better values to the consumers. For example Amazon is a leading
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organization that enjoys duopoly in market (Drees and Heugens, 2013). Prices of products are
determined by joint decisions taken by management of two organization. Different products and
services are offered by two different organizations and price of the products is also determined
by them.
3.2 Way in which market forces shapes the organizational response
It is vital that proper balance between supply and demand should be maintained so that
regulations of market conditions can be done. Demand is defined as requirement of a specific
product or service in market area. Supply is defined as amount of material supplied in market for
meeting the demands that is available in market. Demand and supply are two market forces that
combine together to determine demand of product in market (Williams and Schaefer, 2013).
Demand is willingness shown by buyer towards purchasing a product and on the basis of demand
decisions are taken for supplying products in market. Primark organization offers superior
quality clothing products and due to that
large market share has been acquired by the enterprise.
As per the law of demand while considering all the factors same if price of the product
increases than demand for it decreases in market area. For example if there are demand for
clothing product than due to that Primark will be needing to supply more quantity of products so
that demand can be fulfilled properly. If there will be change in price of product than due to that
demand and supply of commodity in market will be influenced. If there will be changes in
income level of buyers than due to that company is needing to make changes in existing products
and services that is being offered by it (Zhu, Sarkis and Lai, 2013). Amount of product that is
required in market is defined as demand of product and quantity of product that is supplied in
market is defined as supply. Diverse range of market factors gives impact on the demand and
supply of products in market and due to that overall sales and financial performance of the
enterprise gets affected.
3.3 impact of business and cultural environment
Business and cultural environment gives impact on the working practices and procedures
that are being used in the enterprise. It is assertive that the impact should be considered while
making action plans and strategies for carrying out business activities. Operational activities of
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Primark organization also gets influenced by diverse business and cultural factors. Primark is a
leading organization and big market share has been captured by the entity which supports for
enhancing profitability and efficiency of the entity (Rosenbusch, Rauch and Bausch, 2013).
Menswear, Women wear and other apparel products are offered by the enterprise.
Cultural environment gives impact on the business performance and due to that overall
performance of the organization gets affected. Beliefs, norms, values and trends that are existing
in society gives impact on the purchasing behaviour shown by buyers. Every community and
people living there follows some specific rules and due to that it becomes vital for every
individual to follow trends and norms that are existing in society. For example if in a particular
geographical area people give preferences for not wearing black cloths than due to that sales of
black clothing wear of Primark organization will be affected (Paasi, Huhtilainen and Nyst, 2012).
Demand ad preferences of consumers changes from one place to another and due to that
consumers demand different variety of products. It is assertive that beliefs and norms of society
people should be followed so that better services can be offered to business consumers. In
addition to that external business environment also gives impact on the operational activities that
are performed in the entity. Political influences such as rules and regulations that are formed by
government gives impact on the business functioning. It is critical that policies formed by
government should be followed properly so that activities of enterprise can be performed in legal
and lawful manner (Chow and et.al., 2012). Changes happening in technical sector also affects
functioning of business and due to that Primark organization also need to take initiatives for
implementing better technology for running business functions. Other than this environmental
and legal factors also affects the performance of the business and due to that impact is observed
on the performance of the enterprise. Primark company can adopt innovative and advanced
technology so that better and smooth functioning of the organization can be ensured.
TASK 4
4.1 Significance of international trade for UK business organizations
International trade provides medium for selling goods and services of the organization in
large market area. Primark company operates its business in diverse nations and global business
environment gives impact on the functioning of business. International trade is about exchange
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of goods and services in global market area. Finance, capital, people and commodities are
exchanged in international market and it supports in increasing sales activities of the enterprise.
EU member countries also gets benefited by international trade and due to that various positive
advantages are reaped by EU member countries (Boons and Lüdeke-Freund, 2013). Various
organizations that are working across different nations become capable for doing exchange of
goods and services and opportunities is gained by them for earning huge financial revenues.
Better and strong relationships are developed with other countries and it helps for
ensuring better industrial relations with other nations. Moreover, international trade also helps
for enhancing employment opportunities in countries and due to that local community people
gets option for developing positive and better relationships with other nations. Economic growth
of nation is also ensured and it also helps for enhancing sales and profitability of the enterprise.
Changes in Brexit have also given impact on the international trade activities (Botha, Kourie,
and Snyman, 2014).
European union is only one single market which does not generate any tariff for its
member states. UK has separated from EU and due to that international trade activities of nation
has been affected. United Kingdom now needs to pay tariff charges and due to that cost of
manufacturing products has increased in the nation. Other than this Brexit has also given impact
on the economy of nation and various organizations working across nations have been benefited
due to it (Cai, Feng and Zhang, 2016). Tariff charges now need to pay and due to that
manufacturing and production cost for the enterprise has been affected.
4.2 Impact of global factors
Various types of global factors gives impact on the performance of the organization and
due to that business activities also gets affected. Strategies formed in the enterprise have been
affected and impacts have been observed on the overall financial performance of the entity. Wide
range of global factors that gives influence on functioning of Primark organization are as follows
:-
Social factors :- Community people develops their own beliefs, norms, values, attitudes
which combine together to form social culture. It is assertive that this element should be
considered while carrying out business activities (Rusinaite, Vasilecas and Kalibatiene, 2016).
13

Legal factors :- Rules and regulations changes from one country to another and due to
that it becomes assertive to follow legal guidelines that have been given by state. Government of
nation also makes modifications in existing rules and it becomes critical that legal and regulatory
guidelines should be followed in the entity.
Economic factors :- changes in economic conditions of nation also gives impact on the
performance of organization. For example inflation and deflation gives influence on purchasing
power of people and due to that buying behaviour and purchasing decisions of consumers gets
affected (Bocken, Rana and Evans, 2013).
Political factors :- Rules and norms that have been formed by the government also gives
impact on the financial performance of the enterprise.
Technological factors :- Innovations and technical advancements that are happening in
technical sector are giving impact on the performance of the enterprise.
4.3 Impact of policies of EU
EU policies gives influence on financial performance of the enterprise and due to that
impact is observed on working of the enterprise. Agriculture policy of European Union provides
guidelines about food security. Impact of this policy has been observed and food production has
increased up to double of the existing rate to meet the demand of 9 Billion people in year 2050.
Other than this climate changes and sustainable management of natural resources have become
possible (Drees and Heugens, 2013).
According to this policy farming and food production are essential elements of economic
system and they support for keeping the rural economy alive. On the other hand Business policy
of European union states about rules that govern four freedom of movement for goods, services,
people and capital. These are objectives of the single market and member states may restrict the
free movement of goods or other three elements. There are huge opportunities for doing business
in EU as the single market (Williams and Schaefer, 2013).
Policies of European union such as Tax policy also affects the overall performance of the
organization. For example if there will be lower company taxes In one country than it gives
competitive advantage to business. Negative impact has been observed on competition on
companies from other EU countries. Health policy of EU also gives impact on functioning of
14

business and due to that it becomes essential For Primark to provide safe and conductive work
environment to staff members.
CONCLUSION
Summing up the above report it can be concluded that different type of organisations
execute their functions. Objectives, mission, vision and goals of one company differ from
another company. Different stakeholders of business includes employees, customers, suppliers,
government and local community people. Different strategies can be used by the enterprise for
carrying out business activities in structured and systematic way. Some common economic
systems that are followed in the nation includes free, command and mixed economic system. It is
required that responsibilities of the organization should be fulfilled properly so that better and
effective decisions can be taken for the organization.
Recommendation :- Primark organization can make use of PESTEL analysis for assessing
impact of diverse factors on the operational activities performed in the enterprise. Stakeholder
analysis can be carried out for identifying expectations and needs of stakeholders and it will help
the organization for fulfilling the responsibility towards the stakeholders. Other than that
organization can expand its business in global market area and it will help for enhancing
financial revenues and profitability of the organisation. It is required that impact of global factors
should be assessed so that risk of failure and negative impact of global factors can be reduced.
Self evaluation :- Completing this project has supported me for identifying different
stakeholders of business. I have learnt that consumers, government, competitors, employees,
suppliers and local community people are prominent stakeholders of the business. I have
acquired knowledge that fiscal and monetary policies are formed by government for controlling
and regulating the economic situation of nation. EU policies supports for ensuring exchange of
goods, trade, people and services and it provides opportunity to expand the business operations
in global market area.
15

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