Business Environment Report

This report provides a comprehensive analysis of the business environment, using Primark as a case study. It examines various aspects, including different types of companies and their objectives (Task 1), different economic systems, monetary and fiscal policies, and competition policies (Task 2). The report further delves into pricing and output decisions in various market structures, market forces shaping organizational responses, and the influence of business and cultural environments (Task 3). Finally, it explores the significance of international trade for UK businesses, the impact of global factors, and the effects of EU policies on UK organizations (Task 4). The report concludes by summarizing the key findings and their implications for understanding the complexities of the business environment.

Business EnvironmentTable Of Content
Business EnvironmentTable Of Content.........................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
1.1..............................................................................................................................................4
Types of company with purpose...............................................................................................4
1.2..............................................................................................................................................5
Objectives of Stakeholders to be attained by Primark..............................................................5
1.3..............................................................................................................................................6
Responsibility of Primark and strategies employed to meet.....................................................6
TASK 2............................................................................................................................................7
2.1..............................................................................................................................................7
Different Economic System......................................................................................................7
2.2..............................................................................................................................................8
Monetary and Fiscal Policy......................................................................................................8
2.3..............................................................................................................................................9
Competition Policy...................................................................................................................9
TASK 3..........................................................................................................................................10
3.1............................................................................................................................................10
Pricing and Output Decision in various Markets....................................................................10
3.2............................................................................................................................................11
Market Forces Shaping Organizational Response..................................................................11
3.3............................................................................................................................................12
Business and Cultural Environments shaping Organization...................................................12
TASK 4..........................................................................................................................................13
4.1............................................................................................................................................13
Significance of International Trade in UK business Organizations........................................13
4.2............................................................................................................................................13
Impact of Global Factors on UK business Organization........................................................13
4.3............................................................................................................................................14

Impact of EU policies on UK business Organization.............................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................15

INTRODUCTION
Business is considered as one of the most important activity in today’s scenario. It has been seen
that there are many business organization established in country and in order to established as a
successful organization, it is very important to inculcate business environment in a company. It is
refereed to combination of internal and external factors which prevailed in operating
system(Wild, Wild, and Han, 2014). There are various kinds of factors which shall be included
in business environment such as government activities, sale and purchase of goods. Trends like
social and economic which will be prevailing in a company. A key principle of a successful
organization is to bring a healthy and effective business environment which will introduce new
technology and improvements in company. The following project shall create a better
understanding on various chapters to be covered in business environment. The main aim of the
project is to develop a skillful knowledge about same.
TASK 1
1.1
Types of company with purpose
There are various kinds of company which has been established. A structure comprises with
legal frame work will define about what kind of company it is for are example there are private
companies, public companies, voluntary organization or public limited company(Moutinho,
2011).There are numerous kinds of company established in world which are governed by
different structure for an example, Primark is one of the famous company which is structured as
Public limited company. The organization deals in retailing business of Irish clothing and
incorporated in 1948. Primark Own over 290 stores all over the world of which 177 is owned by
UK. The main purpose of the organization is to provide consumer service in terms of clothing,
footwear and accessories. Primark is a public sector organization that offers superior quality
products for ts business consumers. In financial year 2015-2016 company earned net revenue
worth $ 4383.79 millions. Gross profit of the organization was $ 338.736. Total 68000
employees are working with the organization. Company offers home-wear, accessories, women's
wear, clothing and footwear products. Primark deals with wide range of product which will
include women’s wear, men’s wear, beauty Product, confectionery etc. Monopoly of this
company is to sell any item as low cost end of the market below average price.

Other then this there are many organization fall into different categories and those are:-
The Public sector- it can be explained as the company whose stocks are publicly traded. In this
type of company, most of the services are provided by government that is there shall be
continuous interference of government regarding activities carried out in these types of company.
For an example crown prosecution service is governed by public sector as some of its services
are governed by government. The purpose of this company is to sell its share to public(Lankes,
2011).
On the other hand The co-operative bank is a cooperative organization that works across UK. It
is a retail commercial bank that offers financial and banking services for its business clients. net
operating income of the bank in the financial year 2015 was £ 420 million. Total assets of the
organization were of worth £ 22.8 million. Total number of 8000 employees are working with
the bank and organization carry out its functions with objective to earn profit. Cooperatives are
business organizations that are owned and operated by a group of individuals with objective to
earn profit (Wheelen, and Hunger, 2011). Major purpose of cooperative organizations is to earn
profits through selling services and products.
1.2
Objectives of Stakeholders to be attained by Primark
When an organization is being established it is very important that it must comprise of
different stakeholders. It is refer to those group of people which may directly or indirectly shown
an interest towards the activities carried out in a company. For an example Primark have their
own stakeholders such as owners, customers, employee, debtors, suppliers etc. There are
different kinds of objectives set by a company for stakeholders and it is essential for a company
to meet the same. In order to do so there are many ways such as:-
Managers and Directors
Proper responsibility is to be assigned to a manager so that a high position can be Handel by a
manager. Likewise an employee, a manager also look forward for salaries, bonus and other
monetary satisfaction but on the other hand it is also important that a manager must show its
involvement in non-financial areas(Osterwalder, and Pigneur, 2010.). A manager must take care
of his assigned responsibility with regard to work.
Customer

Customers are considered as one of the most important stakeholder in a company because
a demand shall always created by a customer. Such demand is always raised in context to the
quality of product in good price. They want product as soon as possible. The role of a company
for its customer is to attain consumer satisfaction by providing good quality of goods and
services.
Suppliers
There are considered as an essential entity towards a company as they supply raw material for
production of different items.There are some suppliers which even entered into an exclusive
contract(Scheer, 2012). A company shall possess the right to terminate contract if objectives are
not attained by suppliers.
Government
It is always considered to the tax revenue generated by the company. It is the duty of
organization like Primark to generate tax revenue for government so that a city budget shall be
formed. One a revenue will be generated there shall be higher chances of getting employment.
Hence these are some of the objective of primark towards its stakeholders(Turban, Sharda, and
Delen, 2011).
1.3
Responsibility of Primark and strategies employed to meet
When an organization is being established then it raise certain responsibility towards the
work and towards its employee also. There are certain measures which a company must ensure
for an exsample safety and providing good quality of services. A proper form of marketing so
that consumer shall be aware of any product which a company is launching as there are many
company which promise to provide ads but in reality, goods are not similar to what they show in
an advertisement. Some of the responsibility primark possess towards its employee are:-
Providing safety at Work- the major responsbility of any organization towards its employee is to
prove a proper safety and health assistance so that an employee shall be able to work in good
conditions(Bryman, and Bell, 2015). There are many provision related to health and safety
established in The Health and Safety Work Act 1974. It states that it is the duty of an
organization to provide health and safety assistance to employee as well as non-employees from
risk arising out of work.

Equality among all- it is the prime duty of any organization to provide equal opportunity
to all the applicant during its recruitment process. According to the right to equality act 2012, no
person shall be discriminated on the grounds of sex, color, caste, religion etc when it comes to
opportunity or any kind of work in a company.
Providing Financial report- a company must provide an honest financial report to its
stakeholders. It is the right of every stakeholder to get a review on the statement of financial
performance and other operations, carried out by a company in an year(Kolk, and Van Tulder,
2010).
Providing good environment- organization are under an d obligation or it can be said that
they are ought to provide a good environment facility to the employee. The company must be
comfortable with employee and no further burden made on employee. A friendly environment
must be maintained by a company for better work opportunity. Primark needs to fulfil some
responsibilities for working as an organization and it is vital that management of the organization
should take initiatives for meeting their responsibilities. Major responsibilities of the enterprise
are as follows :-
Legal responsibilities :- organization needs to follow consumer legislations, employee
legislations, tax and financial legislations and health and safety legislations. It is required that all
the operational activities of the organization should be executed in legal and lawful manner.
Ethical responsibilities :- It is assertive that organization should not forget about
secondary stakeholders. Company needs to know about expectations and objectives of different
stakeholders. Firm is responsible for satisfying its stakeholders by achieving what they want.
Primark organization takes significant steps for involving stakeholders in the decision making
process. Company avoids buying goods at lower prices and selling them at higher price rates.
Other than this company takes initiatives for not damaging the environment. No unauthenticated
information is provided to people in advertisements and honest claims are made in promotional
campaigns.
Strategies adopted by entity for meeting the responsibilities :- Stakeholder analysis
techniques is used by the organization for systematically collecting data and information to
determine interest of stakeholders interest. Participative management style is used for involving
stakeholders in the decision making process of the entity.

TASK 2
2.1
Different Economic System
A relation which is being maintained between a consumer of a goods and a producer is
governed by economic system. It is considered as complex institutional as well as socio-
economic relation between a producer and a consumer. There are different kinds of economic
system to be followed in a country for various business organization. Some are:-
Mixed economy :- In this type of economic system government and private organizations
takes decisions for making allocation of resources. Discussions about what to produce, how to
produce and in what quantity are to be produced are decided by private and public organizations
that are working in the state. It is a combination of command, market and traditional economic
system and law of demand and supply determine the price of products. Government has less
power for making allocation of resources (Black, Clemmensen, and Skov, 2010). Centralized
planning is allowed in the free economic system and demand and supply are two forces that
determine price of the commodities in market. In UK mixed economic system is followed and
less role is played by government for making allocation of resources.
Planned Economy- a proper planning shall be conducted for the supply and demand of a product.
The input in a planned economy is directly based upon allocation.b it will include distribution,
pricing of any product, decision on investment to be made by company. Cuba is country which
follow planned economy. By the application of such economy, Cuba is able to achieve its
objectives attaining consumer demand. State will be able to build high level of industry in a
underdeveloped economy with the application of planned economy. In this kind of economy all
the decisions are taken by government regarding resources(Chabowski, Mena,and Gonzalez-
Padron, 2011).
Traditional Economy- it is original economic system in which proper customs and
traditions are to be followed. Such customs an beliefs shall help in shaping goods and services.
One of the example of traditional planning is tea plantation to be carried out in South India.
Open Market Economy- the market which will work in the frame of rules and regulation
government by government. In such market, scope of competition and absence and presence of
local custom and culture will prevail on trade. Decisions are taken by firm itself for resources.

Economy of China is governed by Open Market Economy in which an individual or an
organization can carry out the activity of trade by free selling of charges and Taxes.
2.2
Monetary and Fiscal Policy
For enabling growth and for establishing stability in the organization dealing with
business, it is very important to apply such policies because it will bring low unemployment rate,
balance of payment etc. The two main policies which are governed in business environment are
Fiscal policy and Monetary policy
Fiscal Policy- it can be explained as the revenue which is generated by the government out of
Taxes which will influence economy(Teece, 2010). The main purpose of initiating fiscal policy
is to influence aggregate demand in an economy. Fiscal policy create a great impact on housing
and Farming sector. With the application of same, both sector will be able to establish a price
stability. There will also be full employment in housing sector as well as on farming. One of the
major impact of both the policies is seen in economic growth of Housing and farming
corporations. But during the time of recession such policy create a good impact on different
sectors as government can either increase purchase or reduce taxes. But if the taxes get reduced
then it will create worse effect on the economy of a country.
Monetary Policy- when the monetary value of any country shall get controlled by any monetary
authority, comes under monetary policy. For an example each country has central bank, currency
bank which will create a control over supply of money. An economic growth shall always be
distributed under monetary policy. Impact of such policy on both the sector that is housing and
farming will be good as the interest rate shall be on desired level.when a change is attained in
interest rate it will create enormous impact on the supply of product in a market. If the rates will
be low people are expected to spent more money as a result demand shall increase and economy
will be recovered(Meskendahl, 2010).
2.3
Competition Policy
The term competition can be understand as the activity in with two or more then two entity are
engaged to gain or win something by defeating another entity or establishing superiority.

Competition is the common concept in business environment as there are many organization
which are established to fulfill same purpose so in order to attain profits out of business
activities, it is very important that competition must prevail. For establishing fair competition,
there are many policies which are initiated to ensure that efficiency will be promoted in
competition(Trkman, 2010). It will make markets work better then previous. It also aim towards
enhancing competitiveness in market. Some of the policies related to competition in market are:-
Anti Competitive agreement Policy- according to competition act, no business
organization is allowed to form any agreement with other entity which will give an adverse
effect on the competition prevailing in market that is when a contract or an agreement is being
signed between two entities then they have to make sure that such agreement is not making any
negative impact on the competition prevailing in market.
Establishing dominant Position- another competitive policy in order to enhance competitiveness
in market, no company is allowed to establish dominant position in the market that is a company
is established in such a position that i will restrict competition in the given market. But if such
position is being used in a wrong manner then it will be denoted as abuse on dominant
position(Mishra, and Suar, 2010). Provision of abuse in a dominant position is also given in
competition act which is considered as illegal activity.
Antitrust and Cartel Policy - another important policy with regard to competition in a
market is, no business organization is allowed to establish cartels that is they are not allowed to
fix price of a particular product. Fixing price will create adverse effect on the competition
prevailing in market.
TASK 3
3.1
Pricing and Output Decision in various Markets
Market structure is defined as the characteristics prevailing in a particular market
depending upon the product raises and the demand of that particular product. The organization
which is being carried out in a market and the characteristics of a particular market shall define
its structure. There are different kind of marketing structure for an example:
Perfect competition Market- there are large number of buyers and sellers present in this market.
A price of a particular product will be in knowledge of consumers as well as producers. There

are similar kinds of product produced in a perfect competition market and such product will be
differentiated on the basis of any trademark or copyright(Moe, and Trusov, 2011). There is no
barriers on the entry or exit of firm in perfect competition which is why every participant of
perfect competition market is a price taker. In this type of market, buyers make such trade which
will increase its utility in terms of economic. Primark is a perfect example of Perfect competition
market
Monopoly Market- when, in a market there is only one supplier of a particular product or
commodity. When a company enter into monopoly market, it will increase its profit
maximization. The company in this market are generally price makers that is in a monopoly
market, a price shall always be decided by the company depending upon the quantity and quality
of a product. Restrictions are imposed in such market. Not every organization can easily enter in
monopoly market as there is only one seller of the good by whom every output is
produced(Tang, and Musa, 2011). The whole market is governed by just one company. Price
discrimination is also maintained in monopoly market. A monopolist can charge high and create
less elasticity or vise verse. BMW is the biggest example of Monopoly market
Oligopoly Market- small number of seller can establish dominance in a market. There
will be very few sellers present in this type of market but those few seller possess the ability to
maximize profit. They are also called price takers and thus possess the ability to set price. The
barriers of this market is very high of which one major barrier is government licensing, patent,
economic scale. Oligopolies can make long run profits.
Duopoly market- it is also a kind of oligopoly in which imperfect competition prevail.
There are only two firms involved in the production of any homogeneous product.the price
determination will be same as oligopoly.
3.2
Market Forces Shaping Organizational Response
Market forces such as supply and demand gives impact on the organizational response and due to
that diverse business activities gets hampered. Demand is defined as requirement of a specific
service or product in market. On the supply is defined as products and services that are offered
by the enterprise in market. Demand and supply are two major factors and market forces that
shapes the organizational response(Zott, Amit, and Massa, 2011). Supply represent how much

market can offer and supply relationship is defined as correlation between price and quantity of
good that is being supplied in market. Price of products and services gets affected due to demand
and supply of product in market.
(SOURCE- Teece, 2010)
Law off demand states that keeping all the factors remains equal, higher will be the price of
good, less demand for product will be available in market. It defines that if price of the products
in increased than demand for it will reduce in market. For example if there will be less demand
for products in market than due to it organization activities will be hampered. Organizational will
be forced to reduce the supply of products and it will give negative impact on the sales activities
and financial performance of the enterprise. In addition to that market forces gives impact on the
organizational response and if demand for products will increase in market than it is required that
more products and services should be supplied for meeting the demand that has been created in
market area. Supply and demand are two significant market forces that impacts overall
operational activities that are being performed in the entity. In addition to that price is an element
that gives impact on sales and of products. If price of a specific product or service will be
enhanced than due to that consumers will give fewer preferences for purchasing the product.
3.3
Business and Cultural Environments shaping Organization.
It is very important for any or the organization to inculcate cultural as well as business
behavior in an organization. It will create a great impact on the company as it will help in
Illustration 1: Demand and supply
curve