Analysis of Business Environment and Primark's Operations

This report provides a comprehensive analysis of the business environment, examining its impact on organizations, with a specific focus on Primark. It explores various types of organizations, including private limited companies, public sectors, charity organizations, and cooperatives, outlining their objectives. The report delves into stakeholder responsibilities, detailing the roles of employees, customers, suppliers, and the government, and how Primark addresses their needs. It further examines Primark's responsibilities, including employee satisfaction, consumer legislation, ethical considerations, and health and safety measures. The report also discusses different economic systems, such as command, free market, and mixed economies, and analyzes the implications of fiscal and monetary policies on businesses, particularly in the housing and farming sectors. The report concludes with a detailed overview of Primark's operations, its response to its environment, and its strategies to meet the needs of its stakeholders and the impact of economic policies.

BUSINESS ENVIRONMENT
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TABLE OF CONTENTS
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INTRODUCTION
Every business organisation is largely influenced the business environment which is
mixture of internal and external components.. In order to survive in the competitive and changing
environment, corporation is required to analyse the surrounding business environment and its
impact on the business operation. The following project report is going to provide in-depth
understanding and knowledge about business environment and its impact on the organisation.
Furthermore, various stakeholders and company's responsibility towards these stakeholders has also
been addressed in this report (Lee, and Saez, 2012). There are various kinds of stakeholders that are
customer, employees, government, suppliers, investors etc. In addition to this, impact of fiscal and
monetary policy on housing and farming business has been discussed. Moreover, various kinds of
businesses like public, charity and cooperative and their objective has been explained in the report.
In addition to this, the criteria through which business and cultural environment shape the behaviour
of Primark has also effectively defined. It is a subsidiary company of ABF which have more than
238 branches across UK. The major objective of this report is to understand global factors and their
impact on the cited venture.
TASK 1
1.1 Explanation about purposes of various kinds of organisations
Business environment can hugely affect business activities and function of the organisation
to survive in the market corporation have to conduct effective analysis of environment. This
environment consists of two parts i.e. macro and micro environment. Following are various kinds of
organisation and their purposes- Private limited company- Private sector company is the part of country's economic system
that is run by the individuals rather than government. This kind of organisation generates
profit by making the customer satisfied with various effective commodities and providing
services to them. Primark is a private limited company which was established in the year
1969 Dublin, Ireland and recently this organisation has expanded its business operation in
Europe, UK and other part of Britain. The main products of Primark are clothes, shoe, home
ware, women products, accessories etc (Novy, 2013). Cited venture vision is to become the
most popular organisation in the country by delivering excellent quality of customer
products in a reasonable price. In addition to this, Primark mission is to develop innovative
and creative product along with high quality. In addition to this, it wants to become the
world largest retail outlet corporation and earn maximum market revenue and market share.
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For this objective, cited venture have developed innovative marketing strategy and adopted
latest technology. The public sector- Public limited company is that portion of an economic system that is
controlled by national, state and local government. The major objective of the public sector
organisation is to gain maximum profitability by executing their business function in a
proper manner (Grigor'ev and Suslova, 2014) Mission of this organisation is to ensure
macroeconomic stability and regulate flow of fund. This kind of organisation maximise their
profitability in a socially standard way. Ministry of finance is a public sector organisation
which executes its function by the funds provided by government. Charity organisation- Charity organisation is a non profit company which carries out its
activities and function for the welfare of society or any community rather than making
profit. For example, American Red Cross is an organisation in UK which supplies blood to
needy people at the time of juncture.
 Cooperative- This organisation have objective is to provide effective services to people.
Some people use to make association on voluntary basis to achieve a common goal. The
cooperative wholesale society is the best example of cooperative organisation.
1.2 Describe the extent to which Primark meets the objective of various stakeholder
For every business organisation, stakeholder play crucial role through which corporation can
perform its operation in the market effectively. They are those people who are directly and
indirectly connected with the organisation and are largely influenced by the decision of business.
They are most interested to know about the business decision and actual condition of the
organisation. Company have essential responsibility to meet their expectation and always maintain
healthy relationship with them. In the context of Primark, there are various stakeholders like
customer, supplier, employees, government, investors etc. Employees- Employees are essential part of Primark who works for attaining determined
objective. If company make some changes in the business activities and practices then
personnel are highly influenced. So the company is required to participate in the business
decision making because they are interested to know organization’s policies, practices,
financial statements etc (What is Business Environment? Explain its types .2016) In addition
to this, employee’s wants effective salary package, incentive, effective working condition,
motivation rewards etc. So in order to maintain healthy relationship with human resource,
Primark should fulfil their requirement and define the objective in front of them so that they
can effectively attain desired objective in an appropriate manner.
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 Customer- It is another important stakeholder of Primark who are interested in purchasing
high quality product and services in the reasonable prices and also they require effective
satisfaction in an affordable price. For this, Primark have responsibility to develop effective
quality product and services and deliver effective customer satisfaction. In addition to this,
customer also want updates related to product and services so company needed to provide
relevant information about product at regular basis.
Illustration 1: Stakeholder
Source:Novy, 2013.
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 Supplier- Suppliers are those people who deliver raw material and semi finished goods to
company for further production and manufacturing. They want effective order and payment
on time for the raw materials. It is necessary for the company to agree on the terms and
condition of suppliers and fulfil their needs for meeting the objective of them.
Government- Government is the most essential stakeholder for Primark who develop rules,
regulation, code of conduction and legislations related to business activities and functions. They are
mainly concern about taxation policy on the basis of national income, licensing and for protection
of customer welfare (Novy, 2013). Primark have the responsibility to meet expectation of
government by paying fair taxes on the timely basis. .
1.3 Explanation of the responsibilities of primark
The responsibility of the Primark and strategies engaged to meet them are as follows- Keep satisfy employees- Employees are major part of Primark who develop high quality of
product and services for attaining organisation objective. Cited venture have responsibility
to meet the expectation of personnel by provide effective working environment, salary
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package, incentives, motivational rewards and effective working practices. It is
responsibility for business enterprise to develop such policies and strategies through which
its human resources can highly motivate and satisfy by company norms and condition. Consumer legislation- As per the consumer right act, company have responsibility to render
the right product and services to customers which can meet their expectation. Company
should not cheat to customer by provide wrong and bad quality of product and services. So
primark have responsibility to develop high quality of product and services according to
customer requirement and meet their expectation. Ethical responsibility- As per this type of responsibility, Primark should be ethical while it
take decision related to product and services, employees and customer. It must consider on
the equality, fairnesses and impartiality. It should respect to individuals and treat all of them
in a equal manner. In addition to this, company can also take interest in the public welfare if
it can (Chor and Manova,2012) Health and safety legislation- Primark is also responsible to maintain safety and security at
workplace so any employees can not be injured or harmed. It should conduct training
programs for employees so as they can learn the criteria of working at workplace and make
aware about the safety.
 Environment and ethical issue- It is major responsibility of Primark toward environment
and society. At the time of production and manufacturing, company should take care about
society and environment and there should not any kind of harm to environment from
wastage. Thus, company should recycle or destroyed the wastage.
TASK 2
2.1 Explanation about various economic system
Economic system is a system under which government distributes resources and trade goods
and services. The major objective of this system is to control major five kinds of components that is
information, physical resources, labour, capital and entrepreneur. In other words it can be said that
those institution in the country which allocate the resources in the organisation by directly and
indirectly is known as country economic system. There are three type of economic system which
are as follows-
 Command economy- Command economy is system which is largely controlled and directed
by the government of country. In this system, only government decide that what kind of
product should produce, in which quantity to produce and how to produce. In addition to
this, the prices of product and services also decided by the government. Cuba have
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command economy system under high government is responsible to control and monitor on
entire business activities and functions. The decision regarding labour, land, technology,
capital are taken by the government.
Illustration 2: Economic
system Free market economy- In this economic system, corporations are free to take decision
regarding business activities and function because there is no interference of government.
The prices of goods and services are set according to the demand and supply in the market.
The production of product and services are determined by consumer's preferences. United
kingdom is adopted free economy under which organisation decides its own price according
to demand of customer.
 Mixed economy- Mixed economy is a combination of free market economy and command
economy. There is very little interference of government in the decision of production and
delivery of product and services. The decision regarding production and delivery of product
and services are determined by government and customer taste and preference. In the china
there is mixed economy system under which price of product and services are decided by
government and producer (Turner and Zolin, 2012) In addition to this capital technology are
also allocated partially by government and company.
2.2 Implication of fiscal and monetary policy
Monetary policy is related to the interest rate and its affect on the money supply. It is a
process under which central bank or currency board controls the supply of money, often targeting an
inflation rate or interest rate to ensure price stability and generate the trust in the currency. On the
other hand fiscal policy related to the government changing tax rate and levels of government
spending to affect aggregate demand in the economy. In other word it can be said that monetary
policy helps in the growth of economy and assist in lower unemployment. Monetary policy is
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process under which central bank maintain situation of liquidity to create economic growth. This
kind of policy have major objective is to manage the inflation situation in the country and overcome
the unemployment. The major benefit of monetary policy is that it assist in generating revenue of
the economy because government charges high interest rate. In the country if revenue of the
government increase then it time of inflation company can easily survive. In a simple term it can be
said that monetary policy is a process under which supply of money is controlled by the monetary
authority. Monetary policy is highly influenced the business of farming because if government
charges high tax for raising their revenue then it affects the farmers they earn low income they
cannot afford high quality of seeds and farming equipments which affects their income. Farmer not
earn this much that they give high tax to governments. On the other hand monetary policy also
largely affect the housing business because if government charges tax rate then it will increase the
pricing of housing because customer have to pay high tax rate.
Fiscal policy is related to governmental taxation policy under which government generate
revenue through collection of taxation. It is a policy under which government spending and taxation
that affected the economy. The major objective of fiscal policy is to maintain and attain full
employment and stabilise the price level and stabilise the growth rate of the economy. The fiscal
policy stimulate the growth at the time of recession and also helps in regulating government
spending and taxation (Turner and Zolin, 2010). The decision related to goods and services made at
local, national and federal government level is controlled by the fiscal policy. This policy largely
affect the housing business because when the interest rate is high then government charge high rate
on loan so it will influence the housing because they have to pay high rate of interest rate. This
policy also affect on the farming business because when farmer takes the loan for seed and land
then they have to pay tax for that loan. If government charges high tax rate for the loan then farmer
can not afford that price.
2.3 Explanation of various competition policy
Competition policy are used to encourage and improve the competitive process and ensure
consumers feel the benefit of that process. It is used to promote the competition and improve
efficiency of working (Asghar, 2013). The competition policy is developed by the government in
order to protect and secure the company, customer and employees. Following are some major
competitive policy which can influence the working of Primark-
 Competition act 1998- As per this act, various functions are prohibited by the government at
national and local level. Company can not increase the prices of products and can not splits
its activities in other geographical area.
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 The office of fair trading- It is very essential competition policy which assit company from
the illegal activities and unfair competition. The main aim of this policy is to conduct fair
trading to make effective market for company as well as customers.
 Competition commission- It assesses that merger will reduce the competition or not. After
investigating it is recommended that merger is prohibited, it goes ahead. The commission
will decide that after merger competition is maintained or not.
TASK 3
3.1 Explanation about the various market structures
Market structure determine importance of pricing and its output decision which aids for
understanding buyer behaviour. In the market structure there is also competition, extent of product
differentiation and ease of entry into and exit from the market. There are major four types of market
structure which are as follows-
 Perfect competition- In such kind of market structure there are large number of buyers and
seller. Company does not have choice to charge the price of product and services according
to their own basis. For example, ASDA , TESCO ETC.
 Oligopoly- In such kind of market structure various sellers who have no control over the
prices. There are independence of corporations and that are affected by how other
organisation set price and output. For example DIGI telecom.
 Monopoly-In this, there is a single seller who is responsible for control over supply and
price. For example train service are example of monopoly (Grigor'ev and Suslova, 2014).
The minor difficulty of monopoly market structure is that companies with monopoly power
can rigid higher prices than in a competitive market.
 Dulopoly- In this structure, two organisation control all over the market for a product and
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services. With help of this marketing structure company can serve better to their client
because of their specification.
3.2 Illustrate the way of market force
Demand is defined as willingness of buyers to pay for a product and services price. It will aid in
assessing the amount which a particular consumers wants towards purchasing flasks. On the other
and supply is explained as total amount of specific goods that is available for customers. The
demand and supply of product and services are largely affect the profitability and market share of
the organisation. These terms directly affect price of product and services. The demand have direct
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relationship with supply. If in the market prices of product and services increase then customer
demand will decrease. On the other hand if prices decrease then demand of product and services
will increase.
3.3 Implication of cultural environment
Culture plays a very crucial role in the every business organisation as it represent company's
environment, employees beliefs, way of working, their interest etc. Culture largely affect the
performance of employees as well as organisation. The primark is a retail outlet of customer good,
footwear, beauty products, accessories etc. The entire operation of business is largely depends upon
the employee's performance so it is very important to effective make over of culture in the
organisation because culture directly affect personnels activities and efficiency.
Impact of cultural environment on the Primark
Culture of the organisation largely affect the process of business and working of employees
performance. Traditions and cultures existing of a particular location influence the working of the
organisation. Employees have to follow the rules and regulation which are followed by the society.
Primark have to consider the different demand of customer in the various geographical area.
Primark has operated at various location and different countries so at various country there are own
culture and customer life style (Waithaka and Ngugi, 2013) Company have to understand the needs
and demand of customer and according to life style it will produce product and services. In addition
to this various country have their own political regulation and rules which directly affect the
internal working environment of business so company have to consider this aspect at various
country.
In the general term culture refers to the value, beliefs, actions, interaction of employees and
their performance. Only culture is a attribute which define the organisation working and
environment. Primark cultural environment and business largely shape the behaviour of entire
enterprise. There are various kinds of culture such as person, power, task, behaviour etc. Primark
can adopt person culture under which management of business identify the needs and requirement
of personnel and make efforts to fulfil them (TEbert and et.al., 2014). In this manner, Primark
management understand the importance of employees and treat with them as a valuable asset.
Through this practices, employees are high;y motivate and encourage for effective performance. In
addition to this, in this culture of organisation, employees take initiative for higher performance
because their requirement are effectively fulfil by the management. Thus, it can be said that
organisation culture largely shape the performance of business. If business culture is managed and
maintain by the management then their employees can effectively fulfil their responsibility. So it
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can be said that culture of the organisation shape the behaviour of business.
TASK 4
4.1 Significance of international trade
International trade refers to the activity and process under which company engage selling and
buying activities of product and services with other country. In this manner, various goods and
services are exchange between the countries and it often called cross boarder transaction. The major
advantage of the international trade is that with help of this transaction among two or more then two
country , their relationship can make effective and improve (Cai and Yang, 2014). It assists in
enhancing economic growth because it increase growth sale. With the help of this trade, country can
generate revenue and gain opportunity for use of latest and advanced technology.
Implication of Brixit
In the march 2016 UK is get separated from EU is known as Brixit. International trade is
useful for maximise utilisation of resource and consumer also get variety of products. In addition to
that UK is recently septate from EU market and its instantly impact on the EU others member. In
contrary, after BREXIT UK have to pay tariff charges so its adversely effects the fabricate of
products.
4.2 Implication of global factors
Business environment is consist with internal and external component which largely influence
business performance of Primark and other organisation in the UK. The organisation which is
dealing at global level then it must analyse and assess element of business environment. With
assistance of effective analysis of business environment, company can survive and sustain in the
competitive market and at global market. Following are some element in the planetary market- Political- This is the major factor in the international market which can largely affect the
performance and operation of business organisation. In this includes governmental rules,
regulation, taxation policies, legislation, code of conduct etc. While any organisation operate
its business at international level then it has to follow the rules and regulation of the
government of that particular country (Zhang and Huang, 2012). For example, trade policy
and tariff rate affect the import and export of goods and services in the organisation. On the
other hand taxation policy also affect the product and services prices as well as profitability
of company. Economical- This is another major component in the international market which includes
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interest rate, inflation, recession, pricing policies etc. While organisation operate its business
activities in the international market then it have to set its prices of product according to
economic condition of county. It also affects the wage rate, interest rate etc. Social and cultural- In this component customer preferences, taste, culture, life style ,
occupation, education level includes. While organisation operate its business in the
international market then it have to analyse customer demand and requirement related to
product and services and according to their desire it have to produce commodity. It is very
important to analyse market research so as firm can understand the customer life style,
demand, occupation etc (Botha, Kourie and Snyman, 2014 ). Technological- In every department and function of company, technology play a very
crucial role. While company operate its business in the global level, then it adopts the latest
technology according to the country. This largely influence business activities and function
at global market. Environmental- In this includes environmental resources like weather, climate, air, water,
fuel etc. In different country, company have to take consideration on these resources while it
organise business activities.
 Legal- It includes employment law, customer at, business norms and legislation which every
organisation have to follow. Government has made this legislation in order to protect
business, customer and employees.
4.3 Evaluation of the implication of policies of EU
Following are implication of EU policies in UK organisation
 Policies are help for monitoring decisions and it is a systematic activity set by the board of
government that within a EU members.
 EU always promote to their members for enlargement in business and also aid in every
conditions.
 EU inform same regulation to their state members and all these rules must applied by the
countries. If any corporation who is a member of EU must take permission for opening
concern (Chow and et.al.,2012).
 EU main police have cover investment in business, taxation laws, spending and directive,
supporting business activities.
 UK was a previous part of the EU and they have to apply all rules and regulation of the
country.
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CONCLUSION
From this project report it has been concluded that Primark have largely affect by the
internal and external components. In order to survive in the competitive market, company have to
conduct effective analysis of market so as it can acquire customer preferences and taste about
product and services. In addition to this company have largely affected by the fiscal and monetary
policy.
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