Business and Business Environment Analysis Report for Primark Company

This report provides a comprehensive analysis of Primark's business environment, examining its organizational structure, size, scope, and the interrelationship of its various functions. It delves into the impacts of both the macro and micro environments on Primark, utilizing PESTLE and SWOT analyses to identify strengths, weaknesses, opportunities, and threats. The report also explores the positive and negative impacts of various external factors, such as political, economic, social, technological, legal, and environmental influences. Furthermore, it highlights the role of stakeholders and their impact on the company's strategies and operations. The report concludes by summarizing the key findings and providing insights into Primark's business operations and its response to the dynamic business environment.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1 ( P1 & P2 Covered in Power Point Presentation)................................................................1
P1 Different types and purpose of organisation.....................................................................1
P2 Size, Scope and Structures of Different organisations......................................................1
P3 Interrelationship of different organisational structures and their impacts.........................1
TASK 2 ..................................................................................................................................3
P4 Explain positive and negative impact of macro environment on business operations.....3
P5 Analysis to identify the strengths and weakness of an organisation internally and externally
................................................................................................................................................5
P6 Describe how strengths and weaknesses are related with external elements....................6
Conclusion..............................................................................................................................7
References .............................................................................................................................9

INTRODUCTION
The environment in which any business operates its functions has to analyse to run a
business smoothly. These factors and forces include micro and macro which have influence
either directly or indirectly on any business. Thus, business environment keeps on changing over
period of time due to these internal and external factors which makes it dynamic in nature. It has
a direct relationship with environment as it takes inputs from outside and converts these into
finished products. The inputs include in making a product are capital, human resources, raw
materials etc. whereas finished products include goods, services and profit. Primark is an Irish
clothing and accessories company of UK which is subsidiaries of AB foods and having its
headquarter in Dublin. This report includes all factors that influences on various types of
business by explaining size, scope and goals of these companies and information about their
stakeholders using Power point presentation. It has also included the impacts of macro and micro
environment on these organisation using PESTLE and SWOT analysis and the way they
influence on its decision (Ardichvilim and et. al., 2012). An organisational chart is also given
here to show interrelationship of functions and the way they are linked to its objectives and
structure.
Task 1 ( P1 & P2 Covered in Power Point Presentation)
P1 Different types and purpose of organisation
P2 Size, Scope and Structures of Different organisations
P3 Interrelationship of different organisational structures and their impacts.
Every organisations have various opinion to run their businesses. Each company has its
own scope and structures that makes them different from others. The functions of any
organisation is depending on its various operational managements like human resource, sales and
marketing, research & development, production and finance that are taking so many actions such
as planning, structure, selection, organising and logistic (Geus, 2011). Primark is a part of
industrial sector which includes the creation of finished tangible products by using primary
sector's production (Interrelationship of organisational functions, 2016).
Marketing is said to be a bridge of relationship with the market for satisfying their
customers which is beneficial for them as well as for suppliers too. It has been proved that
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Primark has created a competitive business environment for their rivalries like H&M group,
M&S company etc. through their marketing strategies (Hull, Hutchison, and Strasser, 2011).
Finance of these companies are involved in investment of surplus funds as it is quite
related with usage of organisational resources for different operations. Through these funds
organisation are ensures if it is sufficient to meet their requirements in order to manage cash
flows. It has also noticed in so many companies that they have created a treasury fund to gets
best returns and reduces the risk from investment. These investment includes cost improvement
projects, internal projects of additional production lines, introducing new technologies to help
quality and efficiencies.
Accounting on other hand accounting in any organisation including Primark is used to
track all transactions of purchasing and selling, utilisation of business resources internally and
externally on daily purpose. It is used to measure all cash related statements including cash-in
flow and cash-out flow (Kolk, 2016).
Primark has concerned with a large Human Resource Management department to look
their employees. The activities included in HRM department is to manage all staff and their
performance to achieve good efficiency, concern about legal factors and policies also. They have
also played their role in job designing, recruitment, maintain employee laws & relations, manage
compensation, training and development programs to increase the skills of their workers. They
contribute in achieving the goal of Primark company that is to provide the best quality products
at low rates to gain their customer's loyalty (Li and et. al., 2011).
It has been observed that in Primark, any plan has been implemented by the higher levels
of managers who take ownership for their objectives. The business strategies of this company is
used to match internal capabilities and external relationship (Loshin, 2012). Thus, stakeholders
play an important role in implementing new and reliable strategies for a company, who describes
how Primark responds to its suppliers, customers, competitors and social and economical
environment within which it operates.
Primark also follows bureaucratic leadership strategy to manage their operations.
According to this strategy, a company can decide or develop their strategy by their higher level
of managers. It has shown that Primark has selected vision, mission and goals to improve their
business performance. These business operation of the company is depending upon the
shareholders and stakeholders (Myers, 2013). The persons who have an interest in performance
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of any business are known as stakeholders while shareholders owns part of company through its
shares of stock. Since its entire business operations is influenced by macro environment, factors
and forces that makes it uncontrollable. So, the business environment is changing gradually on
the basis of trend of customer and society due to dynamic and uncontrollable features of Primark.
TASK 2
P4 Explain positive and negative impact of macro environment on business operations
Micro environment is very essential part of a business enterprise that involves external
element that are capable to make influence on operation and decisions of the company. It can be
true that elements are known as political, economical,social, legal and environmental or
technological. These all factors has power to effect Primark in both negative and positive manner
(Positive and negative impact of macro environment on business operations, 2017). PESTEL
Analysis is needed to determine these components. Effects of these elements are identify such as:
Political: As Primark is a privately owned retailer company in UK, so, Government of
UK are playing sound role in their working as if government has taken a decision for entire
manufacturing or production companies then Primark needs to adopt and apply all those
decision in to their operations as it is necessary to run their business legally (Myers, 2013).
Positive impact: Due to following government rules and regulation by Primark. That
found to be more respective and able to frame sound image in the society and no need to face up
any governmental issues which can make hurdle in the entire organisation. Ruling in accordance
with the body of government helps Primark in a positive manner as they need not to pay an extra
tax or anything which are unfavourable for firm.
Negative impact: Since this organisation is privately owned, so, if they are not applying
rules of government or not going on the path which are prescribe by them, then it has an huge
impact on their running their operations smoothly.
Economical: The economic factor is very dynamic as it has the nature of fluctuation and
it will not remain same or constant. Funding decision of government are capable to make effect
on the arrangement of finance in companies like Primark. Economical factors are all about
financial fluctuation that happened in society.
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Positive impact: Due to this economical issues like in deflation period, all tax rates are
decreases which makes benefits for all companies including Primark to take loan easily for
running their business operations smoothly.
Negative impact: Primark has contributed a lot in the country's GDP ( Gross Domestic
Product), so this company need a strong monetary fund in recession period to make their
organisation able to stand in different economical changes.
Social: This factor has relation with society, so it might affect the influence of product in
their purchasing perceptions of market, as taste and preferences of customer at their time of
buying a new product is the main priority of any business (Qaisar and Khawaja, 2012).
Positive impact: Due to this, organisation will get those tools which are able to attract
customers especially when there are number of competitors present in the same market.
Negative impact: The social changes forces all organisations as well as Primark also to
conduct further research and develop their processes for earning the trust of market.
Technological: As Primark is a retailer company, so, it need to be updated and use
advance technology in their organisation. New techniques are always help to improve
performance of any business (Rossi, Vrontis and Thrassou, 2012).
Positive impact: With advance technology like high definition cameras and advanced
software, helps the organisations like Primark to operate its Business securely. The technologies
also reduces the effect of uncertainties appeared in economic and social changes.
Negative impact: The companies like Primark forced to use these costlier technologies to
stay in trend.
Legal: This factors is directly impact on trading of any retailer company. It mainly
emphasizes on relationship of employee-employer, supplier-producer and the customer-
organisation (Schaltegger and Wagner, 2017).
Positive impact: Through this legal factor Primark will know the way to follow these
legislation in terms of tariffs, trading and insurance policies, wages and salaries, etc.
Negative impact: Due to these legal factors which are created by Government, company
need to resolve all issues like consumer protection, overuse of labour to produce more product,
etc. are all against the law. So Primark need to operates its functions legally.
Environmental: These factor is about use those thing which are not making any harm in
environment. It can be considered as part of corporate socio-economic responsibilities. The rise
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of ethics forces firms to adopt paper packaging and use of recycled materials (Scherer and
Palazzo, 2011).
Positive impact: Retailers like Primark has adopted the use of environmentally friendly
materials like organic cotton to protect it from harness.
Negative impact: Due to the polices that create to protect environmental, the use of
resources are going to be limited to avoid exploitation, which has impacted negatively on
business of any organisation including Primark company when there are number of competitors.
P5 Analysis to identify the strengths and weakness of an organisation internally and externally
There are so many internal and external factors that influence the performance of any
company. These factors are called environmental factors that create an event to change in
operations of any business, if these event occur within the company then these are called internal
environmental factors which can be controlled otherwise known as external that is beyond the
control of any company. SWOT analysis is very essential in order to define these factors. It
involve the examine of strengths, weaknesses, opportunities along with threats of the
organisation.
Internal Analysis: This analysis is used to identify the area which shows the strengthen
power that Primark used to achieve its target and to determine weaknesses where company has
gone wrong and needs to overcome.
Strengths: The main strength of any company are its employees who contribute their
efforts in achieving success of a company. The retailer company like Primark has 27,000
employees in their 161 stores, which gives strength to this company to stay at a good position in
market. Primark is a part of Ethical Trading Initiative, which focuses on right of their
employees, labours, goods and production. This company also uses special technique to attract
its customers like offer its products at lower price than others. Primark has also gained its
strength through its simple, systematic and organised business structure.
Weaknesses: The main weakness of any large firm is its bureaucratic structure that limits
its ability to compete with their competitors. Primark has shown its weakness by strategic
techniques used for marketing its product in market. It doesn't use advertising campaign specially
that gives benefit to other companies or its rivalries over them. The working conditions of this
also shows its weak point. Primark also faces some issues concerning like use of child labour.
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External Analysis: It is used to find the opportunities by which a company can
strengthen its powers as well as can reduce all the threats that affected the business of Primark.
Opportunities: It shows the way by which any company can develop its strength. It
provides a chance to improve performance of any organisation to compete with their competitors
in the market and to gain their customer's loyalty. For retailer company like Primark, the rapid
change in fashion trend and accessories like sportswear give an opportunity to stay in market
with its exclusive range of products. It has opened its stores in so many countries across UK, so
it should open its stores now in Middle east part also to earn more profit (Sheng, Zhou and Li,
2011).
Threats: The major threat in front of all organisation is to follow all rules and regulations
made by Government to run their business. Threats arise when so many competitors are present
in market whose main aim is to reduce the level of a successful company. The retailer companies
like Zara, H&M and Marks & Spencers are major threats for Primark to stand at strong position
in market.
Under internal analysis, company has ensured that whether it has a proper amount of
resources like financial, plant and machinery, human resources etc. Analysis of external factors
in which a company operates include environmental factors that is used to find changes rates
during inflation and recession period, technological factors that shows changes need to replace
and also some social changes in new trend of fashion.
P6 Describe how strengths and weaknesses are related with external elements
In any business organisation, strengths and weakness are related with its macro and micro
environment. Every organisations need to analyse its factors for attaining growth and
achievement by recognizing its weaknesses. The decision power of these companies are affected
by macro factors like economic, social, political etc (Tukker and Tischner, 2017). The
interrelationship of these macro factors with companies' strength and weakness are as follows-
Political and legal factors- The rules and regulations have a strong impact on Primark,
as its main headquarter is in UK. So, to run business in an effective way, company need to
follow all rules made by government.
Economic factors- It has negatively affected the business of Primark company in its
trade and sales forecast, as the prediction of economic condition of UK is so difficult.
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Social & cultural Factors- This factors has directly impacted on demand and supply of
any product due to change in market trend. The change in fashion makes old product to go out
from market which is a major consequence for retailer company like Primark.
Environmental & Technological factors- Due to environmental factors, companies like
Primark become attracted towards ethical business that help them to reduce wastage and recycle
the waste materials. With the advancement of technology, Primark is selling its product online in
an easy and safe manner.
The strength and weakness of any business with external environment can analyse using
Porter's 5 force model also.
Threat of New Entrants: UK Government has given an opportunity to all business to
open their at low capital, but to imitate with strategies used by big companies to hold their
position in market is very difficult. So only threat for Primark is their competitors present in
market with innovative ideas, which shows its weakness at this point. The strength of Primark is
its marketing strategies and varieties of products available in market.
Power of Competitors- There are so many competitors of Primark present in market like
Zara, Mark & Spencer and Hennes & Mauritz. To compete with them, Primark offer its product
at low price to sustain in market.
Bargaining Power of Buyers- Since customers are now more concerning on price level
of any product, so their bargaining powers becomes so high because of the presence of same
products of different companies.
Threat of Substitutes- There are so many retailer companies in UK which has expanded
their businesses at a large level with variety of similar products, so it has become a major threat
for Prime. To reduce this threat, a company needs to make its brand image and gain its
customer's loyalty.
Bargaining Power of Suppliers- Generally Primark trust on smaller suppliers rather
than to rely on big suppliers. So, the bargaining powers of them does not make a threat on
Primark's business.
Conclusion
It has concluded from the above discussion that Primark can easily expand and diversify
its business in UK and across the countries. It has given a strong competition to all his rivalries
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with a strong financial power. It has provided a high range of its product including trendy wear
of men, women and kids, as well as has a large varieties of accessories like foot-ware, home
decors etc. to attract their customer's mind. It use social networking sites also to promote its
products. So Primark stands as a high quality merchandise. By examining all analysis given by
PESTEL, SWOT and Porter 5 force model, it has been observed that it has well played in market
having less threats and strong power in trading techniques. It has built various programs to
improve the standard and quality of its products which enables them to change its strategies
whenever a new trend in fashion comes or any change occur in market. Maintaining good
relation with political and legal factors, Primark has achieved its success by expanding its
business globally.
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References
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