Business Environment: Primark's Objectives, Strategies, and Impact

This report provides a comprehensive analysis of Primark's business environment, examining its organizational structure, objectives, and the strategies employed to meet stakeholder expectations. It explores the different types of organizations, focusing on Primark as a private limited company and its vision, mission, and purpose. The report delves into the internal and external stakeholders, detailing their objectives and how Primark aims to satisfy them. Furthermore, it investigates the impact of economic systems, fiscal and monetary policies, and competition policies on Primark's operations. The analysis extends to international trade, global factors, and European Union policies, evaluating their significance and influence on UK businesses. The report also highlights Primark's ethical and corporate social responsibilities, including initiatives related to ethical trading, community support, and environmental regulations. Overall, the report offers valuable insights into Primark's business environment and its approach to navigating the complexities of the market.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
1.1 Type of organisations and objectives....................................................................................3
1.2 Describing an extent to which Primark meets stakeholders objectives.................................4
1.3 Explaining the responsibilities of Primark and strategies to meet stakeholders objectives. .5
TASK 2............................................................................................................................................7
2.1 Economic systems, meanings and types................................................................................7
2.2 Impact of fiscal and monetary policies on the Primark.........................................................8
2.3 Competition policies and other regulatory mechanism for Primark......................................9
TASK 3..........................................................................................................................................10
3.1 Determination of the Pricing policy and output decisions...................................................10
3.2 Market forces shapes the organizational responses.............................................................11
3.3 Business and culture environment shapes the behaviour....................................................11
TASK 4..........................................................................................................................................12
4.1 Discuss the significance of international trade to UK business organizations....................12
4.2 Analyzing the impact of global factors on UK businesses..................................................13
4.3 Evaluating the impact of European Union policies on UK corporations............................14
CONCLUSION..............................................................................................................................14

INTRODUCTION
Organisational environment consists of all the elements, components and system that
influenced the functioning of business in either positive or negative way, mainly categorized into
two, internal and external environment. The report will focus on Primark that is an Irish
company established in the year 1969 by Arthur Ryan and merchandise in clothing goods. The
aim of present assignment is to develop an in-depth understanding of different organization
along with their objectives, stakeholders and strategies employed to meet their stakeholder’s
target. Despite the internal system, in the present corporate world, firms are often engage in
worldwide operations, henceforth, it is obvious that external environment such as competitors,
consumers, national policies & legislations, technologies and many others have greatly affect the
operations of the business to a great extent. Therefore, in such regards, report will examine the
outside factors and global market faces and examine the impact of it on business functions in the
context to Primark. Furthermore, it will also examine the importance of global trading practices
that how it can bring success to the firms in different ways.
1.1 Type of organisations and objectives
Now-a-days, different types of organizations operates in the market having distinguish
objectives, mainly categorized into two, public as well as private corporations i.e. sole proprietor,
partnership & companies. Out of these, public organizations mainly aim at delivering services to
the community for the welfare & progress (Lynch and et.al., 2012). Unlike it, private firms are
profit making establishments that operates and transacts into the market so as to get maximum
profitability through their formal course of activities & functions. The three most important
types of business and their purpose of establishing are detailed below:
Primark Stores Limited: It is a private limited organization and a form of company
currently has above 290 stores worldwide. It is well known for its distinctive, unique, innovative,
fashion-drive & unbeatable value of quality clothing goods. In order to gain crowded audiences,
it pays attention to the consumer need & wants and render services accordingly to satisfy them.
Vision: It has been established after setting the aim to get highest yield to gain a leading
position in the retailing industry.

Mission: Great quality and unique selling preposition to the consumers at economical
rates is the mission of Primark that directs its efforts towards target accomplishment.
Purpose:
 To deliver superb quality of clothing products in different designs, styles and colors to
meet public’s expectations
 To render offerings at cheaper rates to the people
 To build sustainable logistic supply chain management
 To boost sales and market share through putting best quality clothing items at reasonable
charges
 To maximize talent and skills among people through investment in training and
development
Public sector: In UK, National Health Service (NHS) is a public sector organization that
is targeted to deliver the best quality vaccination and medical treatment facilities to the final
users free of cost with an exception regards to a fixed charge for the prescriptions. It is proposed
to give best treatment to the patients to improve their health status. Thus, social welfare &
progress is the main purpose of public sector enterprises.
Charitable institutions: Oxfam International is a charity based in UK which purpose is
to serve a specific group of members or people for their progress (Harrison, 2013). This has been
established to give serve poor people who are striving for their well-being and financial issues
and sustainable livelihood, secure life & fulfillment of basic social services are its key objectives.
Voluntary organizations: It can be founded by a group of individuals who will put
efforts for the welfare of a specific union of members. VSO (Voluntary Service Organization)
targeted at delivering best knowledge and skilled & highly-trained people without any gender
disparities to the people (Shaikh, 2010). For instance, Cancer Research UK is a voluntary
organization that aims at determining the causes of cancer and develops its prevention and
diagnosis techniques to cure the patients.

1.2 Describing an extent to which Primark meets stakeholders objectives
There are many users who have some stake in the business direct or indirect, categorized
into two sub-users, internal and external users. Stakeholders are the members who affect the
functionality of the corporation, either directly or indirectly. Users that are the inner part of
business like workers & executives are called internal stakeholders, in opposed to this, external
users are the outsiders who like suppliers, investors, competitors & others. Their objectives along
with the extent to which Primark meet purpose of their users are presented below:
Employees: People play an important role in the business as they put efforts and valuable
contribution to the firm for meeting the defined business targets. Primark gives equal rights to all
the workers without any disparities, maintain safety & conduct training sessions for them
(Budhwar and Debrah, 2013).
Shareholders: They are especially interested to get adequate dividend & earning on their
capital invested. Here, company regularly communicates with the investors and invite them in
board meetings to discuss issues and reports (Solomon, 2014). Further, it delivers good dividend
and generate better return on their turnover to satisfy shareholders.
Customers: Primark aims at targeting audiences through delivering quality goods at
economical prices. They are important because without satisfying the consumers, company
cannot survive in the competitive place. Primark give best quality products run operations
ethically and consider consumer rights & interest also. Moreover, CRM implementation enables
Primark to solicits users feedback and maintain stronger relationship with them.
Suppliers: Suppliers deliver goods on credit; therefore, they need its timely payment.
Primark respond them through maintaining their working capital through an appropriate
composition of current assets and current liabilities; so that, deferral short-term liabilities like
payables can be paid on right time.
Lenders: They grant heavy loans so interested in their fund security and get timely
repayments of their capital (Chavis, Klapper and Love, 2011). Thus, Primark meet their
objectives trough managing long-term risk through designing a right capital structure and make
them outstanding money as per the scheduled payments.

Taxation authority: Her Majesty Revenues & Custom (HMRC) is the UK statutory
body authorized for tax collection. Thus, they require regular taxation reporting from the
organizations and need information about earnings after taxes to impose tax duties. They charge
duties and taxes in the case of lower payments (Kubasek, Brennan and Browne, 2016).
1.3 Explaining the responsibilities of Primark and strategies to meet its responsibilities
As discussed that Primark unfolds several responsibilities and duties towards all the
internal as well as external stakeholders, henceforth, in order to satisfy the users, it employed
following strategies that are narrated below:
Ethical Trading Initiatives: Primark became member of ETI that prove its strong
determination to succeed business values and ethical trading practices and not at others expenses.
These initiated efforts show that corporation carries out a ethical and morally responsible
business practices without harming any stakeholders.
Local community support: It also support community like charitable firms, social
development projects, individuals and families inside UK as well as Ireland (Primark’s ethical
responsibilities, 2016). It receive applications for contributions in society and try to give enough
support as much as possible covering donation, grant & other for children’s education, welfare of
disabled people, improvement in health system & give help to elderly people.
Packaging waste regulations: The main reason of these regulations is to minimize
packaging wastage to landfill works on the basis of Shared Producer Responsibilities that
promotes manufacturer to accept environmental responsibilities for the goods designed via
recovery & recycling. Moreover, Primark also took participation in Valpak’s scheme through
adhering with the principles of UK waste management & packing regulations. For such, Repak
has been authorized to recover packaging wastage on the behalf of Penneys.
Carrier Bags: Use of paper carrier bags by Primark is also an effort practiced to reduce
plastic packaging so as to maintain ecological balance.
Corporate social responsibilities: Primark follows Corporate Social Responsibilities
and corporate governance principles & guidelines designed by parent, Associate British Food

(ABF) to satisfy all the stakeholders like suppliers, employees, shareholders and others
expectations (Granger and Schroeder, 2013).
Environmental responsibilities: Its dedicated environmental team designed a strict
chemical restriction policy for its goods complying with US and EU laws to minimize the
negative impact of textile and clothing manufacturing operations (Primark’s ethical
responsibilities, 2016).
Legal responsibilities: Consistent compliance with the rules and regulations of FTP
(Free trade policy) also is a great initiative taken to encourage ethical practices and prevent the
rights of stakeholders.
Better worker engagement: Primark maintains good working conditions & treat all the
people well and decently and paid fair remunerations for their valuable contribution made.
Moreover, training and development (T&D) provides support to the global workforce to advance
their skills & knowledge base for the personal and professional growth.
TASK 2
2.1 Economic systems, meanings and types
Definition of economic system: Economic system refers to the process through which
government allocates and distributes resources to the companies for the trading practices
(Prajogo, 2016). There are different types of economic system like command, market & mixed
economies.
Planned economic system: Cuba is a planned economy that is majorly owned,
controlled and run by a centralized authority, federal government. Thus, it has command
economy, in which, governments took active participation in the resource allocation system and
regulate the distribution considering the best of the public interest and welfare. Thus,
government control is very high over the distribution of resources to the establishments.

(source: Polak, 2013)
Mixed economic system: China has a mixed economic system comprising the
characteristics of both the capitalism as well as socialism (Donnithorne, 2013). Under such
system, statutory authorities strive to allocate resources in the best of public interest indicates
communism whilst, privately-owned enterprise also has power to take decisions for the optimum
resource allocation called socialism. In this economy, both the individual producer preferences
and government control is equal because statutory authority aims society welfare whereas
manufacturers aims at getting maximum yield.
(Source: Harrison, 2013)

Capitalists economy: UK follows capitalist economic system, in which, majority of the
industries decides to allocate resources, thus, in other words, resource allocation & distribution
decisions is primarily taken by market forces. Primark operates in grocery sector of UK, in
which, commercial establishments have full authority to take decisions without any interference
of the government (Polak, 2013). Government has no control over the allocation of resources
hence; their role is kept at minimum level and consumers & producers preferences plays crucial
role.
(Source: Polak, 2013).
2.2 Impact of fiscal and monetary policies on the Primark
Monetary policy refers to the rules and regulations made by central bank of the UK to put
effective control over the inflation. In UK, central bank, Bank of England create monetary policy
every year, in which, various rates such as cash reserve ratio & statutory liquidity ratio and
decisions regarding open-market operations (buying and selling of securities) as well. The main
target of monetary policy is to control inflation through making policies regarding enhancing or
controlling the money supply in the nation (Padmanand and et.al., 2016). With the stated
scenario, any change in monetary policy will have a significant impact over housing & farming
business in different ways. Suppose, in order to control high rate of inflation, BOE raise interest
rate, then, on the borrowed funds from bank, both type of businesses will be liable to pay a high
cost of capital as an interest payment to the bank. Thus, high financial obligations result in
maximizing expenditures and declined net returns. On the contrary to this, if interest rate goes

down then it will raise up the net profitability because firm will have to bear declined fixed
burden on borrowed capital.
Fiscal policy is a policy that is designed by the Exchequer comprising taxation
regulations & spending policies and affect corporate firms in both the ways (Biggs and Kelly,
2006). Suppose, UK taxation and custom authority HMRC (Her Majesty Revenue & Customs)
decides to levy corporation tax rate at higher rate, then definitely, housing business will be
accountable and responsible to bear exceeded burden of taxations and make high payments, this
in turn, minimizes net yield or vice-versa (Kubasek, Brennan and Browne, 2016). Before Brexit,
UK organizations was not accountable to pay tariff charges for the movement of goods to the
other nations. While, as a result of Brexit, now UK companies such as Primark is accountable to
pay tariff charges to the custom authorities for moving goods to other UK countries. However,
agricultural & farming are not liable to pay taxes, therefore, they will not greatly affected with
such policies. On the other hand, if government wishes to put more spending for the welfare and
progress of the community, then it will give benefits to both the corporations and individuals.
For instance, if statutory bodies introduce several policies and spend more on the public on
education, employment policies, infrastructure development, hospitality and others, then it will
maximize total demand because more disposable income will be available to the people. Thus, it
can be said that housing business units will get benefits
Impact of fiscal & monetary policy on farming industries
Higher the interest rate will impact farmers adversely as they will be unable to take
excessive borrowings through loan due to higher rate of interest which will affect the agricultural
industrial production in an adverse manner. On the other side, tax relief on agricultural functions
helps them as they are charged at reduced taxation rates on the total return generated from
farming operations. Further, promoting the agricultural production by allocating more funds in
the governmental budget assists the farmers favourably i.e. delivery of high quality seeds,
equipment for farming & others.
Impact of fiscal & monetary policy on housing industries
Too high interest rates charged by the government on the borrowings negatively affect
the housing industries, as for the constructions purpose, they borrow funds from the banks on

which they have to pay higher interest burdens. Similarly, if government charges high taxes, then
their tax burden will be increase resulting less return while excessive spending decisions for the
infrastructural support has a positive impact.
2.3 Competition policies and other regulatory mechanism for Primark
Competition Act, 1998: For the fair running of the business operations the competitive
policies are being adapted. With the help of this policy, the element of competition tends to
enhance in the industry. Additionally, the major advantage of this policy is that it helps a
consumer to get the goods and services at lower rates. The major objective of this policy is to
enhance the competitiveness in the concerned industry. This allows a consumer to get varied
products in an effectual manner. Due to increased competitiveness in the industry, all the firm
tries to enhance the quality of their products and decrease the cost. This helps an organization to
attract consumers by offers the best to them. However, the impact of this policy on Primark will
be positive. The motive of this organization is to satisfy the needs and demands of its customers.
For the same, the firm keeps on improving its services and products. With the adoption of this
policy, the stated firm will offer innovative products to its consumers (Ahmad and et.al., 2010).
In context to this, the major aim of the stated policy is to enhance competition in the market.
With the help of this policy, a market becomes a better place for the customers and the
organization as well. The advantage of this policy is to achieve the sustainability level in order to
grow the economy effectively.
Additionally, these policies will help in analysing whether the organizations are working
effectively or not. On contrary to this, for the better management of the company operations
health and safety issues are required to be adapted. These laws will provide safety and security to
the employees of Primark at workplace. This will result in raising the competitiveness of the firm
at global level (Biggs and Kelly, 2006).
Enterprise Act 2002: This regulatory framework focuses on protection and prevention of
individuals rights and also has modernised the previous insolvency regime. In accordance with
this, regulatory has power to investigate the market conditions, and in case of any violation of the
principles and legal provisions, the liable person will be obliged. Primark has to consider their
clients interest while distributing, marketing and rendering any services to them, otherwise, they
can take legal actions for any restrictive act.
Competition Commission: This body has founded that whether merger helps to

minimize competition level or not, and after the evaluation, the statutory body will made the
decision.
Office of Fair Trading: It is an independent regulatory body which has various divisions
like Ofcam, Ofwat and Ofgem which aims at improving fair dealing and trading to promote fair
competition and prohibit restricted practices. As per this, Primark has to conduct work ethically
without any scam, scandal, unfair and cartels business operations.
Competition and Market Authority: It is the key competitive regulator in UK which
plays a major role in investigating merger that restricts the competition. It also investigate the
market problems, like competitive challenges and others.
TASK 3
3.1 Determination of the Pricing policy and output decisions
Market structure can be defined as characteristics of the market like competition level,
number of buyers and sellers, pricing decisions and others. There are various kinds of markets
are exists whose operations and pricing policies are different. Majorly, the pricing and output
decision are based on the type of market in the economy. There are three types of markets exist
in the economy such as competition, monopoly, oligopoly and duopoly. The explained markets
are mentioned underneath:
Perfect competition: Perfect competition is one where ample figure of purchasers and
sellers are merchandising consistent commodity. In this marketplace due to the existence of
various player the evaluation decision cannot be controlled by an individual seller. In addition to
this, the firms in this market have relative share in the industry (Botha, Kourie and Snyman,
2014). In case of perfect competition, the buyer and sellers are large in number and sells
homogeneous products. In thus market the monopoly of the product is totally absent the market
prices is beyond control the services users. In this market structure, prices are decided at the
intersection or equilibrium point of demand and supply of overall industry at which firm offer
their supplies, both goods and services to the consumers.
Monopoly: In this market, there are large numbers of buyers but a single seller. Here, the
pricing decision for a product is taken by the firm itself because of its monopoly in the market. In
addition to this, the firm who has a monopoly in the market is generally the price maker

(Chaney, 2014). The price of a product is being charge as per their profitability. Example of the
same is electricity department and railways of an economy. In this, individual sellers decides the
prices however to sell more quantity of goods, the entity has to decrease the prices and thereby
maximize the total sales value.
Duopoly: This is the market where the market is being dominated by the two suppliers.
In this market, the competition is between the two firms. Here, the price taking decision is also
taken by the two firms. In this case, the competition exists between the few firms where the price
decisions are made among these companies. Example is Coca- Cola. In this, highly concentrated
prices are decided because, if one seller will charge high prices in comparison to the other, than
its sales will be affected adversely, while less prices results in less yield.
Oligopoly: This is the market where a few firms are present in the market. As a result,
the competition is between those firms only. It leads to affect the innovation and competitiveness
in the industry. In addition to this, the price charged by these firms is comparatively high in other
markets (Harrison, 2013).
3.2 Market forces shapes the organizational responses
The demand and supply of the product and service relationship is being defined by the
market forces. On contrary to this, organizational response can be explained as the behaviour of
a firm in the different market situation. However, it is seen that the market research is being
conducted by the successful companies for making the analysis of the products and services
offered by them. In addition to this, the response of the organization to the customers plays an
essential role in the image creation of the company (De Loecker and Goldberg, 2014). As a
result, the direction of Primark supports to examine the status of the marketplace request of their
products and try to supplying them. The motive of this company is to expand and grow in the
economies where it does not operate. In order to attain this motive, the management of the cited
firm needs to keep tracing the position of the competitors and the conditions of that economy.
This will provide an insight to the company to formulate effective plans and strategies in an
effectual manner. In order to match up the demand and supply of the company it is important to
make proper analysis (Lynch and et.al., 2012).
In Primark if the demand of products increase then the sales of the organization will tend
to enhance. The overall impact of the same will be on the increasing the company productivity.

On contrary to this, if the demands of the company products decrease then the profit earning
capacity of the organization will get affected.
(Source: Botha, Kourie and Snyman, 2014)
As per the graph, it can be seen that at the intersection point of supply and demand, price
are decided. In the price and demand, there is negative relationship exists, still, it is greatly based
on the elasticity also. Highly elastic demand brings substantial increase in demand at a little bit
fall in prices or vice-versa.
(Source: Lynch and et.al., 2012)

Interpretation: As per the graph, it is visualized that upper shift in demand curve at a
given price of Primark’s product bring positive change in the market demand which in turn drive
larger sales and return or vice-versa.
(Source: Ahmad and et.al., 2010)
Interpretation: As per the law of supply, Primark will be ready to offer high quantum of
goods at higher prices or vice-versa. Looking to the graph presented above, it is seen that at a
given price, right side shift in supply curve maximize the quantity of supply to get better
turnover or vice-versa.
It seems essential for the firm to consider both the supply & demand variables along with
the elasticity to respond effectively to the market changes.
3.3 Business and culture environment shapes the behaviour
The business concerns have majorly affected by the business and culture environment. It
is seen that there are mainly two types of environment exists such as non-economic and
economic factors. Although, economic factors can be described as those factors which are related
with the economy, but it also includes factors such as regulations and policies of the company as
well. On contrary to this, the non-economic factors consist of the demographic, technological
and other factors (Jaakkola and et.al., 2016). It is seen that, the cited firm operates at global level
where the conditions of each and every economy is different. Some economies are stable and
other may face the condition of rescission. However, it’s the responsibility of this company to
analyse the economic conditions of those countries where they operates. For an example, the

capita income of India and UK economy is different form each other. As a result, it is necessary
for the cited firm to evaluate both the economic and non-economic factors for the successful
company operations. This will remain useful for the firm to attain its predetermined goals and
objectives in an effectual manner (Tayur, Ganeshan and Magazine, 2012).
Primark have the multi- cultural organization where the firm allows employees with
different religion and races. Besides this, the cited organization has team culture where people
work in a team. In addition to this, the culture of the cited firm is fast in terms of services and
customers are valued. Therefore, workplace flexibility, no discrimination policy and cultural
diversity has been employed by it for managing diversity at the workplace in an effective
manner.
Business environment can be analyzed with the help of PESTLE framework conducted
below:
Political: High value added tax (VAT) bring difficulties for the Primark in
setting cheaper prices for their supplies of clothing goods. It results in higher
prices for the commodities supplied to the consumers and affect business
turnover and return adversely. Apart from this, Post-brexit brought a lot of
uncertainties for the Primark, however, some firms get benefits due to weaken
pound against dollar and euro. Moreover, ABF noted that vote to left EU will
have an adverse impact towards its net profitability.
Economical: As a result of Brexit, pound is really struggling due to declined value against
dollar and Euro, which in turn, brought pressure to the corporate
establishments like Primark as it threatened to run operations successfully.
Moreover, separation of UK from EU also results in excessive financial issues
for the Primark as well as other clothing retailers like M&S due to market
uncertainties (EU refendum, 2016). In addition to this, inflation rate also
influenced firm, because high inflation rose up suppliers charges as a result,
Primark will have to pay price at inflated rates. On the other side, as per the
law of demand, customers demand may be decrease as they will not be willing
to buy products at high prices, result in declined turnover.
Social: In UK, rising people demand bring significant growth in Primark’s customer

base, which in turn, maximize turnover and profitability. Moreover, sudden
change in people’s preferences and attitude bring it necessity for the firm to
address the demand consistently to deliver services as per the user
expectations. Further, people’s preferences, attitude, changing economic status
also have a strong influence over the sales and profitability.
Legal: Recently, introduction of workplace pension legislation impose it legal
compulsion on the business to contribute at 3% to personnel’s pension as a
result, expenditures goes up and profitability dropped down (López-Hoffman
and et.al., 2014). Apart from this, it is also necessary to follow rules like
taxation, health and safety, customer rights, fair trade, competition and other
regulatory mechanism.
Environmental: Sustainable environmental practices, paper bag packing, ethical trading
initiatives & use of recycled material enable Primark to maintain ecological
integrity. Further, it also joined Valpak’s scheme to minimize wastage and
follows sustainability programs to reduce chemical use in factories and
improve organic material like cotton.
Technological: E-commerce, emergence of online commerce through Amazon, Boohoo &
others provide assistance to the firm to expand operations overseas, result in
growing customer demand, sales and profitability.
TASK 4
4.1 Discuss the significance of international trade to UK business organizations
Globalization made it easier for the corporate sector companies to expand their operations
and merchandising operations overseas into different boundaries across nation, called foreign or
international trade. It will bring number of benefits for the retailer Primark that are narrated here
as under:
 Foreign trading practices will enable Primark to deliver goods and services across their
domestic borders. With the scenario, UK-refendum from EU allow firm to expand their
operations in other nations to develop a well reputations and corporate image in the
competitive marketplace (Feenstra, 2015).

 Now-a-days, high production cost is a great matter of concern in the corporate world,
thus, international trade allows firms to acquire cheaper material, skilled labor and
technical know-how at less cost, which in turn, enable Primark to charge economical
rates for the clothing items.
 Expansion overseas in many countries allows Primark to attract high-yielding consumers
towards the business, results in greater turnover and return as well. It also raise market
share of the firm to a maximum extent (McGovern, 2016).
 As UK left EU in 2016, thus, company will be able to import material like organic cotton
& others from nations where it is available at cheaper rates like India. It will maximize its
cost competitiveness and results in larger return. However, at the same time, it must be
noted that after refendum, firm will be accountable to pay import duties & taxes to the
other EU nations on the transactions (Botha, Kourie and Snyman, 2014).
 Improved sales, return, market share & consumer base raise up competitive position of
the establishment, as a result, Primark will be able to compete successfully with the
rivalry organizations like Zara, M&S, H&M & many others (Chaney, 2014).
 In addition to this, global trading or trading operations in different markets allows
Primark to earn foreign exchange currencies through exporting their designed clothing
products to the other nations overseas in the world. It enable firm to take benefit of
existing market opportunities and strengthen competitiveness.
4.2 Analyzing the impact of global factors on UK businesses
In the today’s life, almost each and every business unit operates at multi-national level
because they transacts in many countries around the globe. In order to assess the impact of global
forces, mangers and top-executives has to carry out an external analysis and PESTLE analysis is
considered the most appropriate tool to examine and evaluate outside market forces.
Political: High value added tax (VAT) bring difficulties for the Primark in setting
cheaper prices for their supplies of clothing goods. It results in higher prices for the commodities
supplied to the consumers and affect business turnover and return adversely. Apart from this,
Post-brexit brought a lot of uncertainties for the Primark, however, some firms get benefits due
to weaken pound against dollar and euro. Moreover, ABF noted that vote to left EU will have an
adverse impact towards its net profitability.

Economical: As a result of Brexit, pound is really struggling due to declined value
against dollar and Euro, which in turn, brought pressure to the corporate establishments like
Primark as it threatened to run operations successfully. Moreover, separation of UK from EU
also results in excessive financial issues for the Primark as well as other clothing retailers like
M&S due to market uncertainties (PESTLE analysis of Primark, 2016). In addition to this,
inflation rate also influenced firm, because high inflation rose up suppliers charges as a result,
Primark will have to pay price at inflated rates. On the other side, as per the law of demand,
customers demand may be decrease as they will not be willing to buy products at high prices,
result in declined turnover.
Social: In UK, rising people demand bring significant growth in Primark’s customer
base, which in turn, maximize turnover and profitability. Moreover, sudden change in people’s
preferences and attitude bring it necessity for the firm to address the demand consistently to
deliver services as per the user expectations. Further, people’s preferences, attitude, changing
economic status also have a strong influence over the sales and profitability.
Legal: Recently, introduction of workplace pension legislation impose it legal
compulsion on the business to contribute at 3% to personnel’s pension as a result, expenditures
goes up and profitability dropped down (López-Hoffman and et.al., 2014). Apart from this, it is
also necessary to follow rules like taxation, health and safety, customer rights, fair trade,
competition and other regulatory mechanism.
Environmental: Sustainable environmental practices, paper bag packing, ethical trading
initiatives & use of recycled material enable Primark to maintain ecological integrity. Further, it
also joined Valpak’s scheme to minimize wastage and follows sustainability programs to reduce
chemical use in factories and improve organic material like cotton.
Technological: E-commerce, emergence of online commerce through Amazon, Boohoo
& others provide assistance to the firm to expand operations overseas, result in growing
customer demand, sales and profitability.
Recently, UK has been departed from the EU membership in June 2016, it brought many
changes in the corporate world and Primark has been affected too with the same. Before the
departure, Primark was unable to trade with the other nations that are not the members of

European Union, however, from the separation, it brought opportunity to the Primark to expand
their operations overseas, especially outside EU. However, on the contrary side, its negative
impact is that before Brexit, Primark was not obliged to pay any import tariffs for the
transactions with the other EU nations. While, as the result of post-brexit, it bring cost burden as
now it has to pay tax duties (Impact of brexit on global organizations, 2016). At the same time, it
also bring uncertainties in the regulatory environment for the firm, as after Brexit, UK can create
its own trade policies and regulations by which Primark and other corporate bodies will be
adhere in their operations. In addition to this, for the international trade, changes in foreign
exchange rate, technologies others have a significant impact on the operations. Like, if Forex
goes up, then for the import, it has to bear high cost burden or vice-versa.
4.3 Evaluate the impact of European Union policies on UK corporations
There are several EU policies and regulations that all the UK establishments like
Primark, M&S, Zara and others needs to adhere with while carrying out their regular course of
merchandising operations. For instance, as per EU minimum wages act, Primark can be forced to
pay workers at least to a minimum rate set in the law, otherwise, it can be legally punished.
Further, in order to protect workers against discriminatory practices, it is liable to follow equality
act and provides equal rights to their employees (Ahmad and et.al., 2010). However, on the other
hand, to protect consumer rights, it has to comply with the consumer rights policies, ethical
trading principles & others, so that, their rights can be prevented. Despite this, as discussed
before, competition policy & fair trade legislation also needs to be followed to prevent anti-
competitive behavior. Apart from this, as per taxation laws, commercial establishments have to
pay tax duties that will be levied on earnings before taxation as per applicable rates.
Common Agricultural Policy (CAP) is a EU policy applied in the agricultural sector and
implements various rules, regulations and system such as agricultural subsidy and others. As per
the policy, farmers have to follow environmental compliance & humanitarian impacts as well
while executing their farming functions. Apart from this, Department of Education is
accountable to made policies and regulations regarding children’s education, apprenticeship for
the further higher education and wider skills acquisition on an equality basis (Budhwar and
Debrah, 2013).

Taxation policy: Under this, Primark is liable to pay the taxes to the government as per
the charged rates so as to ensure fair competition in the economy and run operations in a fair
manner. Rise or fall in the taxation rates affects the pricing decisions, which in turn, affects the
buying decisions of the users.
Health policy: This policy aims at maximizing the health & wellbeing of the
stakeholders. Under the Health and Safety at workplace, it is legal compulsion to the
corporations to maintain adequate arrangements keeping in view their safety point for their
personnel.
EU Standards: In this, Primark’s products and services are marked with the standard of
quality in order to assure that the offerings of the business are safe & qualitative.
Inflation policy: This policy aim at controlling the sudden rise in the prices offered by
Primark. Inflation results in reducing the buying power of the consumers. In UK, Bank of
England (BOE) makes changes in the interest rate in order to control the monetary flow in the
economy and thereby control the inflation.
CONCLUSION
From the entire report, it has been founded that in the competitive and uncertain market,
assessment of external as well as internal business conditions enable Primark’s managers to
detect areas and keep track of their environmental forces which might have an adverse impact in
the future years. As a result, right policies and smarter decisions can be take on right time to
eliminate and minimize risk of corporate failure through responding to the environmental
changes in an appropriate manner. The report assessed that decisions made through keeping in
view the globally and rapidly changing external environment makes it easier for the business to
make appropriate decisions to attain targeted goals. Furthermore, Post-brexit will influence UK
based establishments in both the ways, although it will allow Primark and other organizations to
expand operations into newer geographic segments and countries that will drive high sales &
profitability, while on the other hand, it will impose more tariff burdens to the firms. Thus, it can
be advised to the firms to evaluate and examine their external market forces before making
decisions and setting plans, policies for success.

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