Business Environment Report: Primark, UK Economy, and Global Factors

This report provides a comprehensive analysis of Primark's business environment, exploring various aspects crucial for its success. It begins by examining different types of organizations, positioning Primark within the public sector and analyzing its stakeholder objectives, including customers, employees, suppliers, and the government. The report then delves into Primark's responsibilities, emphasizing health and safety, ethical considerations, environmental concerns, stakeholder interests, and overall business responsibilities. Furthermore, it explores diverse economic systems, comparing planned economies like Cuba's with capitalist economies like the UK's and socialist market economies like China's. The impact of fiscal and monetary policies on the economy is also assessed. The report then examines pricing and output decisions in different market structures, as well as the influence of demand and supply on Primark's operations. Finally, it discusses the significance of international trade to UK businesses, the impact of global factors, and the influence of EU policies on the UK, offering a holistic view of Primark's business landscape.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Different types of organization availing in the market.........................................................1
1.2 Determining how Primark is able to acquire with the objectives of stakeholders................2
1.3 Explaining the responsibilities of Primark and there strategies............................................3
TASK 2............................................................................................................................................4
2.1 Economic system of different countries................................................................................4
2.2 Impact of fiscal and monetary policy....................................................................................5
2.3 Identifying with the competition policy and regulatory mechanisms in UK........................6
TASK 3............................................................................................................................................6
3.1 Determining how the pricing and output decisions in different market structures...............6
3.2 Determine how demand and supply shapes the organization ..............................................7
3.3 Determining how the business and cultural environment help in shaping the behaviour of
Primark........................................................................................................................................8
TASK 4............................................................................................................................................9
4.1 Significance of international trade to UK businesses...........................................................9
4.2 Impact of global factors on UK.............................................................................................9
4.3 Impact of policies of EU on UK businesses........................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
To develop and grow the business in the market it is highly important for the company to
be updated with the environmental situations so that they get the assistance to work in an
efficient manner. Thus, it is been seen that internal as well as external factors have a great impact
on the functioning of the company, so it is crucial to evaluate with all the updates availing in the
present situation. Moreover, the strategies and policies of the company must be formulated as per
the current scenario of the market (Aras and Crowther, 2011). In this report the case study of
Primark is been taken which is a leading fashion store which are serving with large number of
products to the customers. Further, it will cover with the major aims and objectives availing in
different sector companies are been stated in an efficient manner. In addition to this, different
economic system are been determined which mainly includes the monetary and fiscal policy.
Moreover, the structure followed by the company which help in stating with the decision
regarding the operations are been stated efficiently. At the end, the major issue faced by UK in
international trading is been determined in the report.
TASK 1
1.1 Different types of organization availing in the market
To distribute the products in the market, there are various types of sector which are
providing with the products and services to the customers. Further, with each sector, they are
having there own goals and objectives which help to develop with the company. Primark comes
under the public sector companies which is aligned with the British food industry. Thus, it
selling with large number of products which includes clothings, confectionery, cosmetics etc.
with higher quality to the customers. Thus, it can be segregated in the following sectors:
 Charity sector- It is mainly a non-profit organisation which are been established for
ensuring the welfare of the people. Thus, they serve with the product at adequate price so
that it is highly affordable to all the sections of the society (Brinkman, Navarro and
Harper, 2014). In this sector, it mainly involves with different fields such as the education
and health sectors. Further, under this the best example to be stated is The British red
cross which is serving with greater services for the welfare of the public.
 Public sector companies- Under this, they are mainly owned and managed by the
government. It means that they are possessing with the legal rights to take all the
1

decisions regarding the welfare of the company. Further, there major aim is to provide
with greater products and services to the people so that they feel satisfied. They are not
focusing on the maximising there profit rather developing with the welfare of them is a
major motive. Under this the best example is NHS which is serving with its services in
this sector and make the public feel comfortable.
 Cooperative company- It is mainly developed with the willingness of two or more
people which are serving with the similar objective. Thus, they come together for the
formation of the company and share profits equally. There major aim or objective is to
earn maximum profits out of it and providing with wide range of products to the
customers. East England society is a suitable example under this sector.
1.2 Determining how Primark is able to acquire with the objectives of stakeholders
To run a company efficiently, there are several number of stakeholders which are
involved in it to complete the operations properly. Further, it is been seen that the stakeholder
play an important role in the functioning of the organization in an efficient manner. Thus, they
make a greater impact on the decisions which are been taken by the company. Further, Primark is
highly successful in meeting with the needs of all the people working in the company. Thus,
following are the major stakeholders which are been incorporated with the organization are:
Customers- It is considered that customers play an effective role as they are the ultimate users of
the products and services rendered by the company (Coghlan, 2012). Further, it is the foremost
responsibility of Primark to evaluate with the taste and preferences of the customers so that they
can be able to serve them with best of the products which may satisfy them to the maximum.
Moreover, they must adopt with the customer centric approach which will help to incorporate
them to the customer's objectives.
Employees- They are the backbone of the company as they are responsible for working upon the
projects and attain the objectives of the firm. Furthermore, it is important for the organization to
come up with strategies and policies which may satisfy the employees to a greater level. This
will further enhance the performance level of the company as a whole.
Suppliers- They are the external stakeholders which have a greater impact on the production
process of the company. Primark is acquiring with there products by several means so it becomes
highly important for them to develop an efficient relationships which will help them to maintain
there performance smoothly.
2

Government- They are responsible for developing with the policies and regulations for the
companies which have a direct impact on the performing level of the company. Thus, the
organization must be updated with the legislations and mould there process according to it.
1.3 Explaining the responsibilities of Primark and there strategies
It is highly important for the company to adopt with several activities which will ensure
the completion of all the responsibilities towards the stakeholders. Thus for this, they must
formulate with different policies which will ensure with the healthy environment at the
workplace. Furthermore, the following are the core responsibility which must be acquired by
Primark: Health and safety of workers- The company is having the responsibility in context to the
health and safety of the staff members at the workplace. Thus, for this they must ensure
that there are proper facilities which mainly involve with clean environment, safe
drinking water, etc. which will highly assist them in satisfying the employees (Craig and
Campbell, 2012). Ethical consideration- It is highly important to serve with the ethical and moral support
to the staff members and other stakeholders as it will help to enhance with there morale
and make them satisfied in respect to there values. In addition to this, in the organization
they must assure that all the individuals are having equal number of opportunities.
Moreover, they must also fulfil with the needs of customers to a greater level. Environmental concern- Now days people are very much concerned about the safety of
the environment and they are adopting with the ways in which they can procure with the
nature. Thus, the company is highly responsible for developing with several types of
activities which are eco-friendly and beneficial to the nature. With respect to this, the
company needs to modify with there strategies regarding the packaging and development
of the products. Stakeholders interest- To maintain the functioning of the company in an efficeint manner
it is highly responsible that they must make several measures to meet the demands of all
the stakeholders incorporated with the company. From the analysis it is been seen that
Primark is highly focusing on CSR activities which may highly assist the company to
satisfy with the needs of the individuals.
3

 Business responsibility- The major responsibility is to develop with the plans and make
several efforts which may help in acquiring with the needs and responsibilities of the
company as a whole. As they are serving with the products and services with high quality
and at adequate price which helps them to attain competitive edge in the market. They
also share with there profit with charitable trust for the upliftment of the society.
TASK 2
2.1 Economic system of different countries
From the analysis it is been clear that each and every country is having there own set of
policies and economic system so as to rule over the functioning of the economy. They are having
with the responsibility to formulate with the legislations and rules which will decide with the
distribution of products and services among different countries (Curtis and Samy, 2014). The
following are the different economic system which is been followed in several places.
In Cuba
It is one of the most efficient running economy which is following the planned economy.
This means that the major decisions regarding the industries and the about the labour forces.
Further, it is having a 80-20% ratio, which means that the 80% of the economy is been under the
control of government and only 20% is owned privately. Further, legal authority of the country is
highly responsible for serving the public with free education, programs for entertainment and
food etc.
In UK
In this country, they are mainly practising with capitalist economy in the country.
Moreover, the mix of American and European culture is been adopted there. With the proper
functioning of the economy they are able to attain the fifth position in the world. Further, in this
all firms are owned and managed privately. However, there are few sectors such as health and
education which are somewhat managed by government.
In China
In this country they practising with the socialist market economy. Further, with the help
of efficient evaluation, it has been seen that China is a leading country which makes it one of the
most efficient economy in the world. With the passing time, they are developing the strategies
with a high concern about the consumers which has made it a second largest importer of
4

products. It is been transited from socialist economy to the socialist market economy which
means that the investors and businessman are allowed to earn more and more profits but under
government control. Further, several changes took place in a proper manner.
2.2 Impact of fiscal and monetary policy
To run a economy in an efficient manner, the government has developed with some
policies which mainly include fiscal and monetary policy. Further the former one determines the
usage of money which is been made by the government and is been invested all over the country
which is having a higher impact on the functioning of the economy. Further, this policy is also
having greater impact on farming as well as housing. Thus, it may have positive or negative
impact as per the situation. Thus, it is been stated the nature of it can be controlled by the
government by decreasing the taxes on them. As it will increase the investments which means
that it will reduce the overall negating factors in the economy. This will further help in
stabilizing the growth of the economy to a greater extent. Furthermore, it is done by the legal
authority for controlling with large number of factors which mainly includes taxation,
unemployment rates, and other ones which assist in stabilizing the business cycles of the country
in an efficient manner (Evans, Stonehouse and Campbell, 2012). Moreover, this is been
evaluated that if they are not successful in stabling with the economy than it may have a negative
impact on the performance level of the country. Further, it can be evaluated that with the increase
in the investment done by the legal authority will assist in reducing with the unemployment rate,
tax amount etc. Moreover, they can spend money at various projects such as education,
hospitality sector and other fields.
In contrast to this, the other one is monetary policy which is considered to be an efficient
policy which is is been developed by the central bank. This policy is highly beneficial for the
control on the activities such as the supply chain and the circulation of the money in the market.
Thus, they are mainly focusing on the inflation rates and the trust factor in the currency of the
country. Furthermore, no greater evidence is been identified that any effect in the monetary
policy has on the farming as well as the housing sector. In addition to this, it is been evaluated
that by the stabilization of the prices in agricultural sector and interest rates is having negative
impact on the growth rate of the economy. Further, in case of housing sector, with an
enhancement in interest rates will ultimately results in a decline of real house prices but this can
only be beneficial when there are more investments made.
5

2.3 Identifying with the competition policy and regulatory mechanisms in UK
The development in the industrialisation has developed with the competition level in the
economy as there is an emergence of large number of companies in the industry. Thus, it has
become important for them to develop with the activities of the firm to maintain there brand
image in the market. Further, this has developed with the need for the development of
competition policy in the economy so that the customers as well as the companies do not suffer
due to this rising cause. Moreover, with the context to this UK government has developed with
several policies and regulations which will help to maintain the competition level in a proper
manner. Some of the following policies are been determined as under:
Competition Appeal Tribunal- This policy comes under the section of the Enterprise act 2002.
Thus the reason behind the development of this act was to listen about the appeals and actions
that are been taken against the law in different sectors.
Competition Act 1998- It is an important reform which helps in improving with the trading
conditions in UK with other countries. This act is mainly assisting in stabilising with the trading
between UK and Europe with the protection of traders from monopoly abuse.
Enterprise act 2002- This the the act in which there is a transformation for the improvement in
the availing with the competition act. Furthermore, with this act it has helped the Office of fair
trading to become an independent body (Gibbon and Sliwa, 2012).
Office of Fair Trading : OFT is an self independent body which was formulated with the
motive to protect the public as well as competition law and has now become the economic
regulator of UK.
TASK 3
3.1 Determining how the pricing and output decisions in different market structures
To type of market structure have a great impact on the determination of pricing as well
as the decisions regarding the production of the goods. Furthermore, it is been seen that there are
large number of markets which have there own values in making the decisions regarding the
procurement of there functioning. Thus, these decisions regarding the operations are mainly
related to acquire the knowledge about other competitors that are distributing the similar
products to the end users. Further, the following are the different types of market structure
availing in the market:
6

 Perfect competition- In this market structure, there are several number of buyers for the
particular product but at the same time there are large number of sellers which are serving
with the similar products. Thus, it led to the increase in the competition level among the
companies. Thus, in this not a single firm can decide with the pricing strategies for there
product rather they need to dependent on each other to set the prices for the goods.
However, every individual company has its limited value in the market. Primark comes
under this market structure as there are large number of retail outlets availing in the
market where they are serving with the similar products in the market.
 Monopoly- It is the market structure in which there is a single body which is serving with
the product but having wide range of customers. This develops with the ruling power of
the company in the market. Thus, it gives them the rights to set there own prices and
determine the amount of output which they need to sell in the market. However, the sales
of goods decreases with higher note with the increase in there prices, hence this market is
very price sensitive. This decreases with the competition level in the market. Under this
the railway industry is been included as they are not having any other private ownership
for it (Gottheil, 2013).
 Oligopoly- It is one of the market structure which is having large umber of sellers but
they are producing with the products with some of the changes in it, this makes them look
different from others served by different companies. In this, the decision for pricing is
been taken by adopting with several strategies. The best example under this is computer
operating system which shows with oligopoly feature of market where windows and
apple use to dominate.
 Duopoly- It is mainly similar to the oligopoly market in which there are two leading
firms which are highly dominating over the market. The effect of pricing decision as in
monopoly market as only two sellers are present in market. The best example under this
is of Amazon and Apple as they have come up with concept of e-book.
3.2 Determine how demand and supply shapes the organization
It is been determined that the different market forces such as the demand and supply
factor have a great impact in distributing with the goods to the customers. Further, the reaction
acquired by the enterprises against it is highly affect the brand image and profit margin of the
company to a greater extent. Thus by evaluating the terms related to the demand and supply of
7

the products, it becomes important for the company to identify with the market conditions of the
environment and also to know about the needs and requirements of the customers. This will
make them understand about preferences which will directly assist them in developing with the
products and services in an efficient manner. Thus, it is been evaluated that Primark is highly
successful in stating with the demand of the market for the future which gives them higher
assistance to become effective enough in serving with the appropriate goods to the customers.
They are known for there correct timing to serve the products to the right person. This finally
help the firm in enhancing the profit as they are able to make adequate estimation about the
marginal cost and which directly help in supplying with wide range of products in an efficient
manner. In the case of Primark, they are facing losses because of inappropriate estimation made
regarding the demands raised by the customers. With the result of this, they are either leaving the
customers with empty handed or leave their business overstocked as no one is interested in
buying the stuff supplied by them (Haigh and Brubaker, 2010). Furthermore, it will directly have
a negative impact on the brand image of the organization. Further, it can be concluded that the
relationship between market forces as well as organization’s response is important in ensuring
the success of the firm and to satisfy the customers.
3.3 Determining how the business and cultural environment help in shaping the behaviour of
Primark
In the efficient running of the organization, there are several elements of business and
cultural environment which is having a higher impact in determining with the behaviour of the
company. Moreover, the major factors of environment are economic and non-economic factors.
Both are equally affecting the functioning of the company so it is highly important for them to
evaluate with these and than develop with the strategies regarding the company. Further, in the
economic factors it determines with the elements such as the policies and regulations stated by
the legal authority and are to be followed so as to attain positive results in the market. In contrast
to this, there are other factors such as non-economic which involves with the legal, social, natural
and others which may at some point hinders with the functioning of the company. In case of
Primark, it is important for them to identify with these elements so that they serve the products in
the most efficient manner. Furthermore, it is having large number of outlets at many countries
which determines that they must evaluate with the economic system of that place and formulate
with strategies according to it (Halbert and Ingulli, 2014). Moreover, it is also crucial for them to
8

consider with the non-economic factors so as to serve the customers with the best of products
which may satisfy them them to a greater extent. Thus, they need to update with the technology
which can help the firm to give higher assistance to the customers. Moreover, it is crucial for
Primark to ensure that the legal terms which are been stated by the government of the respective
place must be taken care of. This will help the firm to perform with the activities legally.
TASK 4
4.1 Significance of international trade to UK businesses
With the study made for the current time, it is been seen that there is a greater important
of international trading for the country as it will help to increase with its value in the market.
Further, to develop with the final goods, they require with large number of raw materials. Thus,
all of them may not be available in the country so it is important for them to for imports and
develop with there products (Conner, 2010). Furthermore, there are various benefits of
international trade which are been stated as under: Production cost: It is been evaluated that with the increase in the volume of production in
the organization, it will directly decrease the per unity cost of the product developed by
the organization. Further, Primark is efficient enough in there operations which means
that they are also adopting with the similar approach which makes them efficient enough
in there functioning as they are able to reduce with the price of products served to the
customers.
 Economy: It is been seen that with the help of large number of revenues earned by the
government help in developing with the economy to a greater extent. Thus, it is important
the country to have healthy relations with other countries as it will directly assist in
increasing the profit margin of the country (Hurn, 2011).
4.2 Impact of global factors on UK
With the development of the country, the opportunities for the companies have increased
by greater level. This means that now with the help of efficient strategies they can develop with
the profit margin and attain a competitive edge in the market. The following are the major
components involved in determining the global factors are:
9

Global growth- This has highly given assistance to the companies for there expansion as they
can go for international trading with several countries. Further, this will directly have a positive
impact in availing the profit and enhancing with the goodwill of the firm.
Impact of Government- It is been analysed that there are various types of regulations and
legislations which are been stated by UK which gives the guidelines regarding trading done
internationally. Further, they are also responsible for the regular monitoring of the trade practices
which may have a negative impact on the country (Iqbal and Strong, 2010).
Further, if UK will go for BREXIT, than they will not be able to go for trading all across
the world. This is due to the fact that with the separation from EU they are not able to avail with
the advantages of provided by them.
4.3 Impact of policies of EU on UK businesses
From the study it is been evaluated that EU is availing with greater power in there hand
to control over the places which are been included in there boundary area. Further they are been
responsible for determining with the rules and regulations in context to doing trading among the
countries. They have determined that they can go for free trading among them without any type
of taxation. Further, they have to follow all the policies which are been stated by them.
Moreover, it has a great influence on businesses of UK by spending and taxation law, spending
and directive and also providing with subsidies for supporting the companies (Keillor, 2013).
This will help them to enhance with the job opportunities for the people. He has been provided
with rights that all the EU countries can trade between themselves without any kind of barrier.
The major impact of the EU policy is that it can assist in improving the income and profitability
of the business in the UK. It also affects to the operation of the businesses in the UK as monetary
policies impact money supply and there by affect interest rates, cash reserve ratio requirement of
banks and perform the role of being a regular for inflation. The EU competition policy ensures
that the market competition remains free and that companies work to provide the best product to
the customer at the best prices. The EU policy support to the organisation in the UK s they can
grow and develop their business in the positive manner. Customer of these UK business are also
greatly gained the effective services.
10

CONCLUSION
From the above report, it can be stated that to develop and grow in the market it is
important for Primark to go for evaluation of the environment which help them to develop with
the strategies efficiently. Further, different sectors have there own set of objectives. Furthermore,
UK is facing a greater consequence of BREXIT. Moreover, the type of market structure will
determine the decisions made by them regarding the pricing and output.
11

REFERENCES
Journals and Books
Aras, G. and Crowther, D., 2011. Governance in the Business Environment. Emerald Group
Publishing Limited.
Brinkman, J., Navarro, I. and Harper, D., 2014. Unlocking the Business Environment. Routledge.
Coghlan, A., 2012. Facilitating reef tourism management through an innovative importance-
performance analysis method. Tourism Management. 33(4). pp.767-775.
Craig, T. and Campbell, D., 2012. Organisations and the Business Environment. Routledge.
Curtis, L. and Samy, M., 2014. Investigating whether UK business schools need to be more
business-like in order to survive in today's dynamic environment. International Journal of
Educational Management. 28(6). pp.728 – 750
Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic management for travel and
tourism. Taylor & Francis.
Gibbon, J. and Sliwa, M., 2012. Critical perspectives on Fair Trade: an introduction. Critical
perspectives on international business. 8(4). pp.272 – 276
Gottheil, F., 2013. Principles of economics. Cenage learning publication.
Haigh, M. M. and Brubaker, P., 2010. Examining how image restoration strategy impacts
perceptions of corporate social responsibility, organization-public relationships, and
source credibility. Corporate Communications: An International Journal. 15(4). pp.453–
468.
Halbert, T., and Ingulli, E., 2014. Law and Ethics in the Business Environment. Cengage
Learning.
Hurn, B. J., 2011. Simulation training methods to develop cultural awareness. Industrial and
Commercial Training. 43(4). pp.199 – 205.
Iqbal, A. and Strong, S., 2010. The effect of corporate governance on earnings management
around UK rights issues. International Journal of Managerial Finance. 6(3). pp.168-189.
Keillor, D. B., 2013. Understanding the Global Market: Navigating the International Business
Environment: Navigating the International Business Environment. ABC-CLIO.
Online
Conner, C., 2010. Challenges in business environment. [Online]. Accessed through <
http://www.forbes.com/sites/cherylsnappconner/2013/03/04/the-8-great-challenges-every-
business-faces-and-how-to-master-them-all>. [Accessed on 8th February 2017].