Supply and Demand Analysis

This assignment delves into the fundamental economic concepts of supply and demand. It begins by defining these terms and explaining their respective curves – illustrating how they interact to determine market equilibrium price and quantity. The assignment further utilizes illustrative diagrams to showcase these interactions and provides real-world examples to solidify understanding.

BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Identify the purposes of different types of organisation.......................................................1
1.2 Describe the extent to which an organisation meets the objectives of different stakeholders
.....................................................................................................................................................2
1.3 Explain the responsibilities of an organisation and strategies employed to meet them........3
TASK 2............................................................................................................................................4
2.1 Explain how economic systems attempt to allocate resources effectively............................4
2.2 Assess the impact of fiscal and monetary policy on business organisations and their
activities......................................................................................................................................4
2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the
activities of a selected organization............................................................................................5
TASK 3............................................................................................................................................6
3.1 Pricing and output decisions of businesses...........................................................................6
3.2 Ways in which market forces ascertain organizational responses........................................7
3.3 Impact of environmental factors on Primark........................................................................9
TASK 4..........................................................................................................................................10
4.1 Significance of International Trade.....................................................................................10
4.2 Impact of Global Factors.....................................................................................................11
4.3 Impact of EU Policies.........................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Business Environment is constituted of the set of different attributes of society, economy,
politics and other institutions which exists in the market. It is an aggregate of all the events and
conditions which exist and has the potential to affect the manner in which a business is
functioning. It encompasses all the external factors to which a business enterprise is exposed,
either directly or indirectly. It order to survive in a market, every entity is required to fight
against all the challenges, in addition to the complex and dynamic elements of the external
market. In order to enhance the understanding in relation to business environment the present
report analyzes Primark, and makes an attempt to understand its objectives as well as purpose for
existing in the market (Delahaye, 2015). Further, the economic systems of Cuba, UK and China
have been explained, in addition to the impact of fiscal and monetary policies. In the next
segment, different market structures of perfect competition, oligopoly and so on have been
explained, along with the market forces which prevail in each one of them. Lastly, the
significance of international trade has been elaborated particularly in context of the UK business
market, in addition to the impact of Brexit (Storey, 2014).
TASK 1
1.1 Identify the purposes of different types of organisation
In the UK, various types of organisation are working and they all have their own structure
within they fulfil their business operations in an effective manner. It can be either a public,
private or partnership limited, NPO, corporate trust etc. Every company adopt its enterprise kind
on the basis of their work nature, business aims (Purce, 2014). Primark is a private limited
company who provide grocery products to their consumers and it is also provided their services
to public. Here different type of organisations are listed as follows:
Private company: A company which is formed for generating profits and provide best
services to their customers, often called a private limited company. Primark falls under this kind
of enterprise in which they always try to provide best and qualitative products to their customers
with innovative once. Company's innovative strategies assist for them to cover long area of
market. In this type of organisation, no government authorities are included and fewer
restrictions are their, this assist for private owners to always add some innovative in their

working style. Primark and other private owners run their business own and within the group to
achieve their business objectives (Harper, 2015).
Public Company: In this type of companies run by government owners which always
seeks to provide services to the public of country. British airways falls under this kind and main
aim of this company is to provide their shares to their local public and also serve them to provide
ravishing services.
Charity: This type of organisations provide free services to their public or whom they
may not able to afford it. NHS is the best example who provide their services to people with
affordable price and also not take any single amount from whom they not capable financially
(Butler and Wilson, 2015.).
Co-operative Firms: This kind of companies made for providing services to their natives
and for this, they not receive single amount from them. Daily bread is the best example of co-
operative firm which work for farmers benefits. Company always provide several benefits in
which farmers buy equipments and raw-material with very affordable price (Clegg, Kornberger
and Pitsis, 2015).
1.2 Describe the extent to which an organisation meets the objectives of different stakeholders
As per the above discussion, private limited company is formed to made more profits
which assist to enhance their business in more effective way. Primark have internal and external
both stakeholders, they put their extra efforts to meet their business objectives. Creditors, debtors
and many others' stakeholder play a crucial role in the organisation who always contribute in
their work. Few of these are added in this which play a crucial role in the entity (Haeckel, 2013). Customer: For Primark, customers is the main player who contribute in organisation
success. This is very important for the entity to meet with their satisfaction level. For
this management must evaluate their expectation level from the entity. This is also
important for management to design their production according to their customer needs
and requirements. Primark and its management also provide large number of discount
for their customers and this is also helpful for build better relationship with them
(Roberto, Cawley and Brownell, 2015). Employees and workers: They are also backbone for entity in which company working
is depends on. Manager of Primark always concern with their employee in which they
provide various benefits, safe environment and positive working attitude which assist to

build relationship with all of them. This relationship assist for the management to
enhance better co-ordination with their workplace.
 Shareholders: They are the internal part of this entity in which impacts on the business
and its operations. They receive appropriate part from the business and for this, they
want, entity earn maximum profits which assist for them to grab large amount of
interest. Primark always try to maintain better relationship in which they maintain all
business ethos in more effectively (Bates, 2014).
1.3 Explain the responsibilities of an organisation and strategies employed to meet them
To maintain its business in more effectively, it is important for business person to grab
new and innovative things which assist for fulfil their business responsibilities in more adequate
manner. Similarly, Primark also have some obligation towards the business which must for the
entity to fulfil their business responsibilities. Social Responsibilities: The main aim of their business is to provide a satisfactory
service to their citizen in which management must take care for the quality of products in
more appropriate way (Shrubsole, Davies and May, 2014). Environmental Responsibility: Primark and its management also have responsibility
towards the environment in which they must concern with their products and its safety
issues. They also focus on product development which is based on environment friendly. Business ethics: In the decision-making process, management of primary must use
appropriate ethics which must for a business person to maintain within the entity.
 Legal: Primark also have responsibilities in which they must take care for all such rules
and regulations which is maintained by the entity. Management also develop fair
working environment which includes fair discrimination, equality and employee's health.
To meet their business goals entity must adopt strategies which assist to enhance their
way of working in more appropriate manner.
 The cited company must adopt appropriate strategy which based on the social
responsibilities. With the help of such responsibilities and policies, management become
capable to maintain business ethics in more effectively. This polices also helpful for
management to enhance their customer satisfaction level from the entity (Diepeveen and
Marteau, 2013).

 Management also concern with the social obligations which must for entity to maintain
in more appropriate way. They also concern with products and try to control its
inappropriate use. They also develop polices which assist to maintained healthy
environment in the workplace.
TASK 2
2.1 Explain how economic systems attempt to allocate resources effectively
Every country has adopted their own economic system which assist for them to take
appropriate decision-making in effective manner. This is a methodology in which resources are
allocated in a systematic and appropriate way. UK and other country adopt an economic system
which is adequate to fulfil their requirements (Delahaye, 2015).
Planned or socialist Economy: Cuba and china both have same economy style. In Cuba
government adopt social economy in which their conman people not have right to take any
decision regarding their business activities. All important decision is only taken by their
management where their local business persons adopt their polices in effectively. China is also
adopted socialist economy, they have one of the largest production house and regarding this only
china government is taken part in the decision-making process (Storey, 2014).
Mixed Economy: UK follow mixed economy system in which government provide
imperative authorities to their business persons that is basis on the fiscal and monitory. Primark
and all their business enterprise seeks to take permissions from the government and before their
permissions, they can take decision regarding the same. In this management take resources as
their requirements and after the permissions, they can purchase the resource as per their
requirements (Purce, 2014).
2.2 Assess the impact of fiscal and monetary policy on business organisations and their activities
Every country use some tools which assist for monitoring interest rates and taxes in
effective manner. This is the best way where they can easily measure inflations and some
important points which impacts on business and its activities. In UK, their representatives are
also responsible for monitoring tax rates and spend their amount in effective way. Monetary Policy: In recent year, UK suffers with losses because of recession.
Inflations is another problem through which UK waste their large amount on this. Both
factors negatively impacted on UK and its economy system (Harper, 2015). This

impacts also cover its local business and its business activities. To over come with this
situation, management must take appropriate decision regarding the interest rates in
which they can reduce it. This reduction positively impacts on their consumers
behaviour and their spending amount. On its contrary, if UK government enhance their
interest rates then this will negatively impact on the farmer and house loans and its
relatively activities. In this, consumes become less interested to invest in these activities
(Butler and Wilson, 2015.).
 Fiscal Policy: This policy is based on some tax rates and exchange rates which impacts
on their work in more effectively. If UK increase their import and export related rates
then this will negatively impact on their local people businesses. The result of this
situation create as a negative one because citizen of UK less their interest towards the
investments. Moreover, the citizens of UK will make less import and export
transactions as due to rise in exchange rates (Shrubsole, Davies and May, 2014).
2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities
of a selected organization
To maintain their work in more effectively, UK government develop polices which assist
to maintain the market situations in more effective way. UK government, introduce some polices
which helpful for maintaining healthy competition. Some polices are listed as follows which
assist to know their impacts on the working. The Office of Fair trading (OFT): In this point management has to take initiating
towards the fair and equal practises with each and every one which is not done so. For
solve this problem in the business UK government introduced OFT. As per 2004 data,
anticompetitive practises are reduced which is the good sign for the management. After
this policy, Primark suffer with the huge loss which negatively impacts on their business
operations. They become enable in which they have to sale their products in low prices
and its influences on its profit ratio. Department for Business innovation and Skills (BIS): With the help of this theory, UK
government introduced new polices which assist to maintain fair practises in the market
so that its leads to develop fair practises in their working methods. UK government also
motivate their business\ person to enhance their production skills. This positively impacts

on the Primark and its productivity to achieve the success and for this they can get
success because they adopt new and innovative things in their working methods. The competition and Market Authority (CMA): In this government focus and develop
researching process where they find out all loopholes and enterprise who they are not
adopting EU laws in effective manner. This is also about mergers which assist towards
the development. On its contrary, Primark is not interested in the same because of some
intervention bodies who negatively influenced the business activities.
 Regulation of Privatised utilities: With the help of this policy, UK government
investigate on such company who use their monopolistic in the market. This policy assist
for enhancing and grab the chance to those who they are new in the marketplace. For this,
they develop polices and regulations which impacts on the business operations in more
positive manner. These regulations assist to develop their working style in more
prominent way and it also helpful for reduction the impacts of monopoly power on
market trend.
TASK 3
3.1 Pricing and output decisions of businesses
The forces prevailing in different market structures are completely distinct, and influence
the pricing and output decisions in an exclusive manner. The market can be classified into the
following structures: Perfect Competition: A huge number of buyers and sellers are present in this market,
engaged in transacting with homogeneous goods or services. The enterprises can easily
enter or leave this form of market, as it is devoid of any form of restriction (Jennings,
2014). Due to presence of a large number of entities, no single firm is empowered to
determine the price of these good or services. Primark is engaged in such a business that
its market is perfectly competitive in nature. Therefore, it is forced to follow the price
which is prevailing in the market, and produce goods in respect to the demand. Monopoly: This market structure comprises of only one seller, who is providing the
specific goods or services to the market. Such an entity does not face any competition,
and has no fear of close substitutes. In consequence of the same, the cross elasticity in
respect to demand is extremely low. This form of market is comprised of barriers for

other firms to enter the market. However, these entities do not have the liberty to
determine both prices and demands of the product. In these circumstances, the
monopolistic firm can either ascertain the price or the output level, and the other shall be
ascertained through the market forces. Oligopoly: Only a small number of enterprises operate in this form of market structure,
and these may be engaged in either similar or different products. Due to this it is not
possible to ascertain the level of competition of the market (Reinhardt and Stavins,
2010). Since the size of market is not very large, the interests of the existing firms often
collide with each other. In consequence to which there does not exist any certain method
through which prices shall be determined. Hence, the price-output forces are
continuously changing.
 Duopoly: This market structure is comprised of only two enterprises, which function in
an independent manner. However, the pricing strategy of one has a direct effect on the
pricing strategy of the other.
3.2 Ways in which market forces ascertain organizational responses
The market forces prevailing in the market has a direct impact on the manner in which
various business enterprises in the market operate, and respond to the changes. The primary
forces of demand and supply, in particular, has an instrumental role to be played in this respect.
The law of Demand, formulates to be a vital aspect of economics. In accordance to which a rise
in price of the product shall result into a fall in the demand of the respective product, if other
factors remain constant (Bansal and Hoffman, 2012). Therefore, demand and price share an
inverse relation with each other, which can be clearly represented through the following demand
curve:

Illustration 1: Demand Curve
Supply and Demand, 2014
Where as, in accordance to Law of Supply a rise in price shall be followed by increase in
supply of the quantity, other factors being equal. Hence, a direct relation is shared by price of
goods with the quantity being supplied, and the same can be represented through the following
supply curve:
Illustration 2: Supply Curve
Supply and Demand, 2014

It can be understood from the law of Supply and Demand that the response of an
organization, in respect to that of the market forces, is largely dependent on the surrounding
economic conditions. However, if it is assumed that other factors are constant, a variation in
demand of the product shall have an effect on the production of an organization as well as the
pricing policy. For instance, if demand of a product decreases in the market, the business firms
shall be forced to reduce their supply, and this in turn shall also reduce the prevailing prices of
the product. Therefore, the pricing decision of an entity is ascertained on the basis of interaction
of the forces of supply and demand (Yoon, 2012). The pricing strategy so determined on the
basis of this interaction shall be considered as an equilibrium price. This is the point of
agreement between producers of goods and the final consumers of the same goods. This
interaction can be represented through the following figure:
Illustration 3: Supply - Demand Interaction
Source: Supply and Demand, 2014
3.3 Impact of environmental factors on Primark
The Business and Cultural environment is comprised of different factors, and poses a
direct influence on the manner in which a business operates: Political Factors: The political events and trends prevailing in the nation also effect the
manner in which Primark operates. For instance the political event of Brexit shall have a
major influence on the strategies which are formulated by the organization.

 Technological Factors: This is one of the most fluctuating factors, due to the constant
technological advancements (Trkman, 2010). Every change in this aspect requires
Primark to adopt new technologies, and make constant investment. It is essential for the
company to adopt these changes to maintain the quality of output being delivered. Economic Factors: The economic elements of recession or inflation has a direct
influence on the decisions of an organization. A high influence is laid on the purchasing
or spending power of the people, which is turn impacts the demand of certain products.
This in turn effect the pricing and output levels of Primark.
 Legal Factors: The prevailing legal framework of the concerned industry, including the
fiscal and monetary policies directly impacts the manner in which a business undertakes
its daily decisions. Moreover, amendment in the taxation rates shall force Primark to
alter its pricing strategy. This eventually shall impact the consumer behaviour.
TASK 4
4.1 Significance of International Trade
The arena of international trade has to a major extent flourished in the past decade, and
accounts for a large portion of income of the nation. With advent in transportation systems,
outsourcing and rapid industrialization, the scope of international trade is also evolving. The
significance of this form of trade is based on the following opportunities which are made
available to domestic enterprises: Access to diversified and new customers: International Trade shall enable organizations
of the nation to expand its target markets. In addition, it shall also assist them in reaching
a more diversified group of consumers from different parts of the world (Cavusgil, and
et. al., 2014). The restrictive operations within the national boundaries shall be widened.
Therefore, the flow of money in the market shall be enhanced, with constant
advancements in the quality of products being made available. Create New Opportunities: The scope of business shall be broadened through
international trade, and be evidenced by healthy competition. Every entity of the market
shall strive to gain a competitive edge by continuously upgrading their products and
delivering prime quality products. In addition, the available opportunities to realize
increased profits and indulge into diversified areas shall also be increased. In pursuance

to the same, the governments of host countries may offer special concessions for
international entities, which can also be in the form of tax rebates or exemptions. This
shall promote many domestic players to initiate a venture in such host countries, and
realize high profits.
 Access to Advanced Technologies: Through this medium the domestic organizations can
access technological advancements which are not yet introduced in the British Market
(Kierzenkowski, R. and et. al., 2016). In this manner companies shall be empowered to
gain a competitive edge over other players existing in the domestic market.
4.2 Impact of Global Factors
The forces existing in a globalized market is to large extent determined by the trends
prevailing in the international market. For instance the impact laid by the operation of BRIC,
impacts the manufacturing business in different countries. This alliance has been formulated by
Brazil, Russia, India and China, and they are functioning to promote India and China for
supplying manufactured raw materials globally, and at the same time promote Brazil and Russia
for being the predominant supplier of other raw materials. On the basis of functions being
undertaken by this alliance it can be concluded that they are posing a great impact on the
manufacturing business being undertaken by British organizations (Cressey, 2016.). It has been
noted that all the Western countries are preferring to transact with countries of this alliance.
Moreover, the changing climatic conditions and global warming is another factor which
has influenced the manner in which the domestic British organizations are functioning. A
specific impact is seen on the health of people, and the resulting deterioration of the
performance. This has heavily influenced the kind of technology required for undertaking
efficient production and manufacturing of goods in the continuously changing climatic
conditions. This in turn requires the businesses to continuously invest in new technologies,
which can be efficiently accustom to the new weather conditions. In addition, the governments
and NGOs have become highly active for conservation of the environmental conditions, thereby
imposing stringent rules and regulations over the operations of the business (Miethe and Pothier,
2016). It has also been observed that the level of interference made from the end of the
regulatory bodies and social workers has also increased, which eventually hampers the functions
of these organizations.

4.3 Impact of EU Policies
The smooth functioning of British market to a large extent can be owed to the policies
which are implemented by European Union. The single market of EU provided financial and
other form of stabilities to the businesses being practised in UK. The cost of entering into trade
with any of the EU nations has been extremely low because of the favourable policies. However,
this was the scenario which was prevalent before the event of Brexit occurred. Pursuant to the
same, the business organizations and the market of the nation is facing uncertainties and
ambiguities, specifically in relation the following policies: Agriculture Policy: The Common Agriculture Policy (CAP) of EU has been supporting
farmers of the region by providing them with direct payments, this has proved to be a
great help for agricultural industry (Cumming and Zahra, 2016.). This can be evidenced
from the fact that 55 percent of income generated in this sector is due to the CAP
support. However, the event of Brexit imposed uncertainties over the agricultural policy
of UK, and the manner in which it shall function. Business Policy: The sole fact of being a part of EU market, enabled the UK businesses
to leverage at different situations, and has made available opportunities which have
proved to be highly beneficial. The policies implemented by EU have been promoting
and supporting different areas of business. But the conformation of Brexit has directly
impacted businesses which were functioning within EU, on the basis of these policies,
which may no longer be applicable.
 Miscellaneous Policies: Various other policies which had an impact on the businesses
of UK shall be under an ambiguous condition, which could also prove to be detrimental
to their interests (Boulanger and Philippidis, 2015). For instance, the businesses would
not longer be able to enjoy the tax concessions or rebates which were provided for
being a part of EU.
CONCLUSION
After summing up all above study, it becomes easy for Primark management to know
about their business environment. This study become affective for Primark management because
this is the best way where a business person become essential to know about the entity and its
capability to stand in the market place. In this report, Mixed economy is also included in this
which assist for taking appropriate decision-making for public and private company. This report

also include Brexit case and its impacts on the international trade. In this various polices are also
includes which assist to maintain a business environment in more effectively.

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Online
Supply and Demand, 2014. Available through: <https://www.britannica.com/topic/supply-and-
demand>. [Accessed on 4th February 2017].