Understanding Business Environment Dynamics

This assignment delves into the complexities of the modern business environment. Students are tasked with examining key factors such as supply and demand dynamics, the impact of taxation, ethical considerations, and the role of sustainability in shaping business success. The analysis draws upon various theoretical frameworks and real-world examples to illustrate how these elements interact and influence organizational strategies.

Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
1.1 Primary..................................................................................................................................4
1.2 Primark meets the objectives of stake holders.......................................................................5
1.3 Responsibilities and strategies of Primark.............................................................................6
TASK 2............................................................................................................................................7
2.1 Economic systems of various countries.................................................................................7
2.2 Impacts of fiscal and monitory policies.................................................................................8
2.3 Competition policies .............................................................................................................9
TASK 3..........................................................................................................................................11
3.1 Various types of competitive market...................................................................................11
3.2 Market forces that affect demand and supply of the market................................................12
3.3 Business and cultural environment affect the Primark........................................................15
TASK 4 .........................................................................................................................................16
4.1 Significance of international trade.......................................................................................16
4.2 Impacts of global factors on UK Business organizations....................................................17
4.3 Impacts of policies of the European Union on the UK Business organisations..................18
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20
Books and journals.....................................................................................................................20

INTRODUCTION
The entire report is in the reference of the organisation Primark which is a subsidiary
company of the ABF (Associated British Food) group. The company’s entire focus is always
upon the innovations and to bring new ideas, it has always been distinctive for offering
unbeatable value which never loses its fashion drive edge. Primark not only deals with
manufacturing goods but expertise in understanding the customer values. The report will present
an insight about the various types of business environment which company suffers through. Also
it will explain about how various market forces affects the working of the business.

TASK 1
1.1 Primary
Primark offers a diverse range of products which includes kids wear, new-born, women,
men, accessories, home wear and many more. The company sells the clothes at a very low cost
as compare to the other companies. Primark believes in fast and rapid changes and innovations.
They never lack behind in the adopting the prevailing trends (Dai and et.al, 2011).
The purposes of Primark are:
 To improve the continuity and their range of products in the company.
 To maintain respect for each other and also all those who are involved in the working of
the organization.
 Their major focus is on the environment health and safety.
 To strive continuously for effectiveness.
 Adopting various techniques for employment and trading.
 To offer the best value for money.
 The Private Sector- The private sector organizations are maintained by the private
funding and then operations which are done in this organization, are for making the
profit. The profitability depends on the performance of the employees. Greenergy
international is the private sector organization which provides the fuels for the motor
vehicles and its umpire is in quarter of the UK market.
 The Public Sector- AWE(Atomic weapons establishment) is a public sector organization
in which the manufacturing of nuclear deterrent has been done. The main purpose of this
organization is to made the equipments which can be utilized in the time of war. The
public sector organization is authorized by the government of that country and that
organization work for th betterment of country. (Allred, and et. al., 2011).
 Charity- Primark has raised 1.4 million through sales of its Christmas bumper range for
making the wishes of the poor children a magic and to come true those who were fighting
from the toughest situations of life. Basically the main purpose of charity organization is
to fulfil the general needs of those people who have nothing in their life and they are
living in so tough conditions. It is a social work and completely non- profitable. For
example Make A Wish is a charity organization that works for the children who have

some major health issues like cancer. The funding of this organization depends on the
donation from the people.
 Primark believe more in donating clothes instead of donating money to the poor and
needy people.
 Coordination – If we talk about the coordination in the Primark it runs various
departments in various cities and manages them so well by keeping complete controls
over both the organisation and on the potential customers of the organisation. Primark is
well structured by considering the needs and the desires of their customers. The
coordination is so essential between the each department of the organization, because the
main purpose is to make the products and services feasible for the customers (Anonym,
2009). The each operation should be so flexible and must go with the flow.
1.2 Primark meets the objectives of stake holders
As Primark is one of the largest retailer in the Europe with around 200 stores and more
where Primark majorly focuses upon fulfilling the objectives of the stake holders who are
involved with the organisation. Some of them are mentioned below.
 The significant proportion amount of profit is for the ABF’s revenue. As it was first
initiated by the ABF and Primark is one of the stores of ABF.
 Secondly the Primark focuses upon the potential customers who are willing to invest into
the organisation, so the Primark is very concern about their needs and desires.
 Also they look upon the latest fashion and trends and keep bringing innovations in the
same just to add value to the money of the stake holders who are interested to invest in
the organisation.
 Primark also keep complete concern for the stake holders like creditors, customers,
directors, employees, government, suppliers, union and community who invest their
valuable money into the organisation (Ayyagari, and Maksimovic, 2009).
 Primark organisations provide different considerations to those who are a part of their
organisation.
 Also they keep influencing and motivating them by letting them know that they have not
made the wrong decision by adding their valuable money into the Primark.
 Primark considers trade unions as they are the bodies who represent the workers of the
organisation.

 Their another objective is to seek attention upon the non-government organisations who
provides help to the workers’ in case of any issue occurs into the Primark.
1.3 Responsibilities and strategies of Primark
As being such a vast company it becomes very obvious to maintain the dignity and goodwill
to sustain longer in the market. And so there are so many responsibilities which Primark needs to
fulfil to keep both their customers and employers happy so that the employees work more
effectively and efficiently for their organisation. Responsibilities of Primark are mentioned
below.
 They make their employees, workers, suppliers, local wanders, communities a part of
their organisation and work along with them and involving them into the work and
decisions by every way they can make more profit for the organization. (Teece, 2010).
 They treat their suppliers fairly so that there may no such conflicts occur into the
organisation.
 They provide equal and fair opportunities to their employees which are entirely based on
their merit list.
 Primark do not carry any type of biasness of neither for their employees nor for their
employers and focus upon equal distribution for one and all into the organisation.
 Also the local communities are respected and entirely supported by the Primark and also
help them to resolve any issues they face.
 Primark not only focuses upon the customers and the employees but also take their
working environment seriously so that everyone who are involve with the organisation
feel satisfied.
 Primark also does ethical trading initiative with their own determination to succeed
without affecting the expenses of any other.
 Primark also support many such charitable organisations by providing them clothes
instead of donating cash to them.
TASK 2
2.1 Economic systems of various countries
1. Economic system of Cuba

Cuba receives almost 100,000 barrels of oil a day all the way from Venezuela. The
aggregated gross national income per capita of Cuba is officially $5,539, but they take home
salary is around $20 only. If we talk about the modernisation in the economic system then only
less than % percent of people in Cuba has access over the internet as the Netflix are very weak in
the country. The government of Cuba authorizes very less self-employment activities for the
Cubans due to which the economic system is lacking behind. The economy followed by this
country is depended on the big organization and mainly the business of oil export (Teece, 2014).
The whole economy is based on the import and export business. The people are not aware of
such strategies which can make their economy stronger because of the poor internet service. The
individual profit is so low for the each person of Cuba. Cuba has planned economy in which the
whole system is handled by then government of Cuba. The private sector do not have any right to
make any changes in the government's strategies.
2. Economic system of United Kingdom
The type of economy which is adopted by the United Kingdom is the Capitalism which
means a countries’ trade are privately owned and controlled. The inflation percentage of United
Kingdom is near about 2.5%, unemployment is 8%, and interest is 0.5%. The exchanges rate of
UK are 1 dollar to .6177 pounds. Their top exports are car and medical equipment. They usually
import in verities of food. The economy of UK is based on their trade market. The have so low
unemployment rate and also the interest rate of each transaction is quite low so it is so better for
their economy. The whole economy percentage is based on the production of car and medical
equipment. Some part of the economy have impact from the import of food products. The
exchange rate is quite high so all over the UK have wealthy economy. UK has capitalist
economy because the government have no right to make any kind of policy for the private sector.
Each organization have their own rules and regulation.
3. Economic system of china
China has socialism and capitalism structure of economy and a blend of two you can say.
But the leaders look for adopting capitalism type of economy so they even practice capitalism to
make it permanent. Its gross domestic product has reached far above by 10% far above from
those developed nations. In china the maximum control is in the hands of the government and so
private businesses are monitored so closely and are controlled wisely (Johanson and Vahlne,
2009). There are so many products which are exported by Chine to other countries. The economy

will suffer when this export business will be stopped. The government have the hand to operate
the each operation related to their economy so other companies cannot make more difference in
the economy. The China has the mixed economy because the operations which are related to the
economy are handled by the private sectors and the government as both are involved into the
decision making process. Both have rights to make changes in policies according to their
feasibility.
2.2 Impacts of fiscal and monitory policies
1. On farming
 The government has the duty to provide employment to those who are unemployed and
are willing to work, also helping others to promote maximum production and purchasing
power this will result in sustainable growth of the economy. The farming can be big
source of income and this can make the economy more effective. The farming sector's
values are getting low with the time but if government supports them then it will be the
major contributor to the economic growth.
 The Federal Reserve must regulate the money supply to maintain the stability of the
overall price level as they are closely related with each other. The price level depends on
the economy of that country, the farming sectors have got so low prices of the production
so it can make impact on that.
 As maximum rate of economic growth for our national economy includes per capita
increase in the per capita consumption of the country.
 The change in dollar exchange affects upon the farming or the agricultural sector. The
exchange rate of the dollar is the effective factor for the farming sector as the price would
be low if the products will be exported to other countries.
2. On housing
 Due to the fiscal policies there are houses which are newly constructed single family
houses not yet sold or occupied till yet (Karaibrahimoglu, 2010).
 The rents of the houses changes with the change in the fiscal policy and monitory policy.
 All the houses previously occupied units are being offered for resale due to fiscal policy
and its changes.
 Also the previously occupied houses go out and offered for the sale.
 Even the strikes are done by the builders due to the drastic change in the prices.

So, these both the farming and hosing sectors are adversely affected by any change in the
fiscal and monitory policy of the country and not only these but there are many such sectors
which are also affected by the same. So decisions are need to be taken by the government by
considering each and every sector. The monitory policy will make changes in the rents of houses
so people cannot afford the houses for their family. If fiscal policy is applied to the housing
sector the old house which are already have made, will be go for resale and their price will be so
high. This can make impact on the housing sector. The housing must have the affordable policies
that can be the major contributor of the economy. The drastic changes are done by the
government in the prices, so builders are having so many issues as thee have done so many
strikes against those changes.
2.3 Competition policies
The despotic aim of the competition policy is to promote competition in the market, make
the market and its working better by implementing the competition policies. Also it focuses upon
improving and contributing in the efficiency of the individual market (Ballard and et.al, 2012).
Moreover, it enhances the competitiveness into the market so that each and every individual
business works more effectively in the prevailing market. The competition policy aims to ensure
major things which are mentioned below.
 It brings innovations in the field of technological change which promotes dynamic
and continuous changes in the present market scenario.
 It brings effectives competition between the suppliers into the market.
 It preserves and promotes the individual choices of the customers by understanding
their needs and desires as well as their interests.
 It provides increased choice and lower price levels.
Four pillars of competition policy
1. Antitrust and cartels – This avoids the unusual and individual price fixation and
restrict upon the competition by fixing the common prices in the market.
2. Market liberalization- It introduces competition in the previously monopolistic
sectors such as energy supply, retail ban king, mobile telecommunications.
3. State and control – This ensures that the competition may not get affected by the
airline subsidies and tries to avoid that to an extent.

4. Merger control- this is concern regarding checking the mergers between the
organisation which are taking place in the market.
Effects of competition policy
 Merger between two unequal and two large groups may result in dominating the
market which may affect the other competitors.
 Price fixing or other abuses by the firm may also affect the market and other
competitors.
In Primark because it’s a private sector organisation so competition factor would be always
there for this organization. The competition policy is applied on this organization too. It will
make impact on the working of the system as it have to work on their various existing strategies
to be a better image in the market (Jennings, 2014). Competition policy forces an organization
provide the best of them to the customers. So Primark should maintain their economic graph with
the competition in market. The competition policy consists the concept according to which each
organization have to work with the market demands. If the competition is high in the market then
the prices would be decreased to be in the market with a better brand image. If the prices goes
down and due to high competition sale of the product has also decreased then the profit % would
also be decreased for the organization.
TASK 3
3.1 Various types of competitive market
 Perfect competition – A perfectly competition market is the most hypothetical market
where competition is at the greatest level. Where there is no control over the prices and
there is no such restriction like fixing of the prices for the particular products. There are
large number of buyers and sellers in the market and there is no restriction over the entry
in the market any one can join anytime they want and the entry is totally free. A person
can easily enter without any difficulties for the same. There are possibilities of abnormal
profits. Also there is no authority for taking the decisions in the perfect competition
market. The cost and the benefits do not affect the third parties. Firm can sell at any price
they want to sell (Hill and Wickramasekera, 2013). There are zero transaction costs as
sellers do not charge any money while making exchange of goods in a perfectly
competitive market.

 Monopoly – It’s a kind of imperfect competition where many producers sell their product
but they are differentiated from each other. For e.g. different brands and different quality.
Here the single firm dominates the market. The firm increase its profit that is equal to its
marginal costs. And business has the total control over the market. No entry and exit is
cost in the long run. There is full independency in making the decisions.
 Oligopoly competition – It is where the market is dominated by only few large firms,
under theses the firms do not feel fighting over the prices but they believe competing in
various other ways such as advertising, product differentiation and barriers.
 Duopoly competition –It is the other form of oligopoly where the different large firms
dominate the market. And can also have the impact over the market.
3.2 Market forces that affect demand and supply of the market
There are various market forces which affect the demand and the supply of the market
such as perfect competition, monopoly, oligopoly and duopoly. For an instance if we talk about
the perfect market there is a lot of variation in the demand and the supply of the market as there
is a lot of competition in the market and different firms fixes different prices for their product
according to their decision and choices as regular competitions are being taken place and prices
increases and decreases and so as the demands of the customers are affected by the changes in
the prices. Like if the price of particular product decreases then the demand of the customers
increases.

Illustration 1: Supply Graph
Source :(Ennings, 2011)

Illustration 2: Demand Curve
Source :(Kindsfaterienė and Lukaševičius, 2015)
Illustration 3: Price balancing Curve
Source: (Beckmann and Pies, 2014)

Illustration 4:
demand supply curve
Source :(Beckmann, 2014)
Now if we talk about the monopoly there is no such variation in the prices as there is no
such competition in the market and there is only one seller so if the customer needs that
particular product he definitely goes and buy the product where is no such fixation upon the
demands and supply and is not affected by the change in the prices.
If we talk about the oligopoly market here people already made up their mind as there is a
differentiation in the brands and the quality so they recite to the brand they trust the most and
who so ever provides the best quality product the customer raises their demand for the same and
accordingly the supply is done.
3.3 Business and cultural environment affect the Primark
If we talk about the business environment then there are many such elements which will
affect the Primark the business environment is totally concerned with the environment of the
business organisation that is what type of leadership style is adopted by the Primark, what type
of techniques they have adopted for solving the problems that happens in the Primark. Also how
good practices they have adopted into their organisation and how they are dealing with it. It also
depends upon either the business is taking place within the domestic boundary or is established
globally because most of the problems comes when we carry the business outside the domestic
boundary then the Primark will need to overcome various barriers such as licensing , government

policies of other countries, various other rules and regulations and laws. Business environment
can make impact on the working of Primark, like market competition, pricing of their products,
the competition in the market is also a factor that can difference in their economy. Business
environment has to be maintained by Primark, by applying various strategies and plans. The
business environment have consists so many operations, those operations should work in their
flow. The marketing strategies will make the difference if it is not effective for the business of
Primark.
Cultural factors- Cultural environment is that where the organisation is effected by the
different values, ethics and customs of the company. Cultural environment may affect the
Primark in different ways for an instance the employees working in the organisation might come
from different states or countries and differ in their language cultural which may create a barrier
in communications between the employees and the employers in the Primark. Also if an
employee has come from different state may have different values which might differ from those
with the Primark values so these may affect the Primark.
Cultural environment have so many factors on which the organisation have to work as the
area is so important in which the organization has their market. The sale of the product depends
on the taste of the people of that particular area. The employee works for the organization may
come from another state, its language, its culture can be different from the other employee of the
organization so that can make impact on the business of the Primark (Beckmann and Pies, 2014).
The Primark should make sure about their employees thus the environment of the working space
should be friendly for the each employee. The communication gape can be a big hurdle in the
way of business. Primark have maintained the environment for making the valuable business.
TASK 4
4.1 Significance of international trade
The international trade is beneficial in many ways and affects the business in both good
and bad ways it also affects the working of the organization. The below points will provide the
factual and practical examples to make it more clear about the topic.
 Trading with international markets helps the organisation to build strong in the
technological field by bringing new technologies and tools into the organisation.
 It helps in adopting various new techniques and methods which were never seen before.

 Dealing with the international market lets your organisation grow at the international
level (Johanson and Vahlne, 2009).
 It builds the reputation of your company and also helps in raising the goodwill of your
companies.
 This also let you expertise in overcoming the barriers which comes into the way while
trading with the international market.
 It also helps in bringing innovations and creativity into the organisation as dealing
outside the domestic boundaries let you learn more with different values and different
culture of people.
 Let your organisation to understand different languages, customs, and ethics of various
countries.
 It helps you build strong at the domestic level a once you cross the international
boundary.
4.2 Impacts of global factors on UK Business organizations
There are 3 global factors which can make impact on such business organisations of UK:
Government rules and regulations: government made so many rules and regulation that
has to be followed by the each and every organization of each sector. For business organizations
like Primark there are also few rules and regulations applied by the government of UK. There are
some rules that decided the marketing criteria or the organization so organization have to make
sure about their marketing strategies and medium which they are using for the marketing, also
the pricing is also so essential, because it has to be decided after following the tax and duty
constraints applied by government.
Recession: Recession is the condition that comes when the demand of the products is low
but supply from the supplier is high. In this kind of situation the business organization have
impact on their revenue because if the profit from the sale of the product will get so low and the
organization will suffer in the market. The employment will be decreased as the business
organizations of UK will not able to give jobs (Johanson and Vahlne, 2009). The
competitiveness will be very less in the market. Primark is a business organization and it can
suffer with the recession as their products will not be in the market for so long time which
directly impacts on the economy of the organization.

Competition: Competition of the UK market is as high as each organization is making
complete effort to be in the market with a success brand image. Primark is also doing so many
things to maintain it. It can make the impact on the business organization because during such
modifications if any error have come then it would make problems for the organization, as it has
to make sure about each sector of the organization to be in the competition. The prices should be
decided after evaluating the market.
4.3 Impacts of policies of the European Union on the UK Business organisations
EU policies some time being so positive for the organizations of UK but sometimes it makes
some bad impacts on those organizations. Employment policy: The Primark have followed the employment policy of European
Union according to that the employees should be treated so well from the organization,
the mentioned facility will be provided to them as long as they will work for the
organization. If Organizations of UK have made any changes then it can put the
organization in some major problems. Inflation policy: The business organizations will get more problems if European Union
will raise the rate of interest as the price has to be increased by the organization due to the
high rates on the borrowing. This can make impact on the sale of products as ultimately
the business organization of UK. Taxation policy: The policies like fiscal and monitory can make major impacts on the
business organizations of UK (Anonym, 2009). If the taxes will be high so Primark have
to pay more to the government then it cannot be able to invest more money which
indirectly differs the economy of the organization.
 Regional policy: This policy mainly provides support to the largely unemployed and
socially deprived areas like southern area of Italy, rural areas of France and also Scotland
islands which will directly impact the unemployed areas of more well to do parts of
unions of Europe. It will only give support to the unemployed rural areas.
 There are various rules and regulations of European Union in which, some are being old
now, some other new policies have been introduced time to time. These rules regulates
people by time how they should behave with one another and more importantly how to
conduct businesses. They are very important to set the “rules of the game”.

CONCLUSION
The entire report is based upon the business environment and what type of culture is adopted
by the Primark. The report has also discussed about various types of completion in the market
which perfect competition, monopoly, oligopoly, and duopoly. It has also presented the
competition policy and how it affects the Primark and any other organizations. It will provide an
insight about the various economic systems which includes countries like china, Cuba, and
United Kingdom. It will help you find out the difference between various economic systems and
how they are adopted by different countries.

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