Analysis of Primark's Business Environment: A Comprehensive Report

This report provides a comprehensive analysis of Primark's business environment. It begins by identifying Primark's organizational type as a private company and outlines its primary purposes, including providing quality products at low prices, achieving profitability, and fulfilling corporate social responsibilities. The report then examines how Primark meets the objectives of its stakeholders, such as investors, employees, and suppliers, and discusses its responsibilities toward these groups. Furthermore, the report delves into economic systems, comparing planned, capitalist, and socialist economies and their impact on Primark's resource allocation. It also assesses the influence of fiscal and monetary policies on housing and farming firms, as well as the impact of competition policies and regulatory mechanisms in the UK on Primark's operations. The report also touches upon the significance of international trade, the impact of global factors, and the influence of European Union policies on Primark. The report emphasizes Primark's strategies to meet its responsibilities towards employees, shareholders, customers, and creditors. The report concludes by highlighting the importance of adapting to the business environment for success.

BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Identifying Primark’s organization type and its purposes.....................................................1
1.2 Ways through which Primark meets the objectives of its stakeholders................................2
1.3 Responsibilities of Primark and strategies to meet them......................................................3
TASK 2............................................................................................................................................3
2.1 Economic systems help to allocate resources of the entity...................................................3
2.2 Impact of the fiscal and monetary on housing and farming firms........................................4
2.3 Five competition policies and regulatory mechanism in UK which impact on Primark .....5
TASK 3............................................................................................................................................5
3.1 Pricing and output decisions help in determining the market structures..............................5
3.2 Way by which market forces shape the organisational responses .......................................6
3.3 Cultural and the business environment is shaping the behaviour of the Primark.................7
TASK 4 ...........................................................................................................................................8
4.1 Significance of the international trade to the Primark .........................................................8
4.2 Impact of the global factors on Primark................................................................................8
4.3 Impact of policies of European union...................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment refers to collection of internal and external factors which affects
the operations of entity. Factors included under this are clients, competitors, owners and many
more. This helps in identifying business opportunities of gaining of market share of entity. In this
report company is taken as Primark. Primark is supportive company of ABF Group. This was
launched in 1969 in Ireland. This company is dealing with retail fashion store and unlike other
stores of this entity is not manufacturing goods itself. This organisation is selling the products at
low prices for grabbing market share. This Report covers type of entity Primark is and its
purposes. Further, it covers the way by which Primark is meeting objectives of the stakeholders.
It will discuss the responsibilities of Primark and various strategies used to fulfil them. Lastly, it
coll study the economic system followed by Cuba, United Kingdom and China.
TASK 1
1.1. Identifying Primark’s organization type and its purposes
Primark is private company and these type of entities has no control of government.
Liability of the company is limited to its shares. Minimum members in entity are 2 and
maximum are 200. Paid up capital is restricted to 1 lakh. Directors of the entity is 2 and not more
than that. In case of death, bankruptcy, insolvency company keep on existing. It is compulsory
for private company to use limited after its name of business. Shares of the private company
shares are transferred by private agreement. Purpose includes:
Aim and Objectives of Primark
The main goal of entity is to provide quality products to consumers. This company is
popular because of providing products at cheap prices. This entity is offering wide variety of
products at reasonable prices and this is helpful in grabbing large market share. This organisation
is very helpful towards staff and the customers. By this entity want tpublic to think that ,this
company is very friendly and this will attract consumers to the shop from this store.
Profitability
Last year profit generated by the Primark in retail business is approximately 7.1 billion
pounds. From last eleven years of profitability position of business has growth of 5.5 billion
British pounds (Kljucnikov and et.al., 2016).
Corporate responsibility
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This company is following the CSR activities which is helping the entity to fulfil the
duties towards society. Implementing these activities in the entity help in creating good image in
front of society and market.
Public Sector
This company had most of the involvement with the government. These companies have
to raise the funds by selling shares of stock. This organisation has the number of member in the
entity is 25 and maximum 50. Shares are listed in the SEBI. These companies have the securities
which is owned by public via capital market. Ownership of the entity is shared by shareholders,
board, management and public shareholders. Purpose of public company is to conduct activities
for the welfare of employees which help in making good image in market. For example, there are
many companies which are operating in UK are London stock exchange, British petroleum and
Blueberry group PLC.
1.2. Ways through which Primark meets the objectives of its stakeholders.
There are various stakeholders in the business which had the diverse need of the entity. It
is helping company in fulfilling demands of the customers. Stakeholders are persons who are
involved in company with means of their work. Stakeholders include investors, employees,
lenders, suppliers, customers, government and public etc. (Prajogo, 2016).
Investors - These are the person who take risk in investing in the company. By providing
information to investors company is fulfilling responsibilities towards them. They need
information to find the capability of entity for sake of dividend. Most decisions are taken by
Primark to please investors because they are one who are investing in entity.
Employees- Company is providing all benefits to employees like remuneration,
retirement and many more. It is one of way via Primark is meeting objectives of employees.
Company is taking care of the all the needs which they require for their development.
Suppliers and trade creditors - With help of suppliers Primark is meeting need of the
raw material. Suppliers needs information of entity for determining the amount which are owed
by them when due. Creditors of entity requires information about the company because they are
interested in company for a shorter period than lenders until they are dependent on enterprise as
major customers.
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Financial institutions- these institutions need information for knowing the position of
entity. This help them in analysing time period of paying back to the entity. This will help in
knowing the profits earned by Primark in a financial year.
1.3. Responsibilities of Primark and strategies to meet them
There are various responsibilities on Primark which needs to be fulfilled by it.
Responsibilities towards the employees, customer, shareholders and many more. This needs to
be fulfilled by the entity. For employees, entity must fulfil all the requirements which are given
by them.
Employees - Entity is fulfilling all the requirement of employees like for motivating
them various incentives are given which help the entity for achieving the goal which was already
decided. Providing them training and development so that they can enhance skill of employees.
Various strategies are made for fulfilling responsibilities towards the management.
Shareholders- Owners of the entity is makes various plans for increasing scope of
business so that company can gain good returns from this. By providing quality services to the
customers which help in meeting needs of the customers. It will be helpful in earning of profit
and their dividend (Huang-Horowitz, 2015).
Customers- By serving the quality products to customers helps in meeting their needs.
This will help Primark in attracting the customers. This help in focus on making of new products
so that customer find something new in market which are meeting the demands of customers.
Creditors - Primark has the responsibility of paying the amount of which is due by the
company. This will create good image in front of the creditors as well as the market. This will
help in making good relation with the creditors.
TASK 2
2.1. Economic systems help to allocate resources of the entity.
Economic system means system of production, resource allocation and distribution of the
goods and services. This system is one of the type of social system. In this three questions are
asked what to produce, where to produce, how to produce. There are three type of the economic
systems which are market economy, command economy and the traditional economy
(Kljucnikov and et.al., 2016).
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Planned Economy- in this type of the economy which has the investment and the
allocation of goods are according to the economic productions plans. Usually this type of the
economy is supported by the Soviet type central planning. This type of economic system is
followed by Cuba. These allocations of the resources is guided by the entity which are restricting
the entity to use resources freely.
Capitalist economy -this type of the economy has to focus on the profit of the entity and
own by the private individual. There is no interference of government. This type of economic
system is followed by the United Kingdom. Allocation of the resources in Primark is free
because there are no restrictions of the government which is making the firm to use resources
freely.
Socialist economy- this type of the economic systems has the control over the social
economies of the entities has to follow the economic theories, practices, hypothetical not and
existing social economic system. This type of economic system is followed by China. In this
allocation of the resource is based on planned manner which is decided by socialist system. In
this Primark has many restrictions to use the resources freely.
2.2. Impact of the fiscal and monetary on housing and farming firms
Fiscal policies refer to monitoring of the nation's economy has the adjust the spending
and tax. Monetary policy and fiscal policy are the made for regulating the money supply of the
nations. This will help in making nation’s economy to grow. This type of system sees availability
of finance of firm. Fiscal policies help in running the business of firm in a smooth way. It helps
Primark in observing spending of entity. This company has more advanced people who has
capability to earn profits for firm. If spending level of firm is reduce in wasting of time and help
firm in making entity to earn profits. If taxes of entity goes down which is helping the Primark in
the selling of the products in cheap price. This will help in dealing to fulfil the demands of entity
(Khan and Quaddus, 2015). Impact of fiscal policy on farming business is when the tax rate
increases in that case it affects the farming business by increase in cost of the farm inputs,
techniques which are used in this business, prices of land many more. Rules and regulations of
government affects farmers in their working.
Monetary policy is made by central bank which involves supply of money management
and interest rate for achieving the objectives like liquidity, growth, consumption, inflation. Tight
monetary policy refers to restraint in money supply by credit control instruments for reducing
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excess money supply. Easy monetary policy has to raise the economy by increasing money
supply via credit control instruments. This policy is implemented by central government for
achieving the demand of income and employment. If money supply is increased in economy,
then there will lot of money in hands of people and they will buy more goods from Primark.
When there is excess supply of money then economy impacts on housing business are; prices of
land as well as houses increases which will make the customer to lose control over the money.
Sales of houses increases which will maximise profitability of business.
2.3. Competition policies and regulatory mechanism in UK which influences Primark
In UK rules are strict as compared to the other countries which help the firm in doing
business in a better way. By fulfilling demands of customer, it will be helpful for firm in meeting
the demands of customers. This can be possible by introduction of innovation in product which
aid firm in earning of profits (Epifanova and et.al., 2015.). By customers' satisfaction helps in
gaining larger amount of market share. By using of the latest technology which will help in
improving the efficiency of the customers and help in moving ahead from competitors. By
providing the wide range of products which will attract the customer in number. By offering
quality of products, helps firm to increase retention of clients. Loyalty of the customer helps in
gaining the popularity of firm. By increasing of competitors maximise the risk because all the of
them are selling products at lower price. If any of the firm has occur the losses then in that case
there is option of merger and acquisition. This can help in avoiding of competitors. By trading
ethically creates a good image of company in front of society. It will be one of the ways by
which Primark is selling its products in the effective market.
Mechanism help in making the regulating the market like PRA and FCA. These are the
bank regulators which provide the money for expansion and starting the business and many more
which is helping the entity to smooth running of business. It will be helpful for Primark in
arranging of the funds by these regulatory authorities.
TASK 3
3.1. Pricing and output decisions help in determining the market structures
Market structures refers to nature and degree of competition of goods and services
(Grosanu and et.al., 2015). In this many firms are selling the products at low prices which
increases the competition in market. There are many market structures which are prevailing in
the market some of them are:
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Perfect Competition- In this type of market structure all the products are same which are
sold at uniform prices. This type of market there are large number of buyers and sellers. In
sellers and buyers has information about the product. In this type of market composition there is
a lot of competition on the basis of price and quality. Primark does not come under the perfect
competition and this market structure is hypothetical one which does not exist in real world.
Monopoly- In this type of market structure there is only single seller and buyers has to
purchase the products from there due no options left. Pricing is set by their own and consumer
has to purchase the products at prices which are set by them. Most of the companies make the
group and set the prices for consumers which suits them. Primark does not come under this type
of market structure. Entity has lot of competitors which does not fit the company in this type of
market (Huang-Horowitz, 2015).
Oligopoly- In this type of market structure there are few sellers and buyers in market
which sell the same products. Prices are also decided according to the level of consumers.
Primark come under this type of market structure because there are few competitors of this
company which are Marks and Spencer, Select, Lesara, Mother care, New look etc. If one
company is selling products at low prices it affects other companies as well.
Duopoly- In this type of market structure there are two companies which has most of
market structure. In this there are few competitors in market and which is one of the form of
oligopoly. It’s impacts on market is similar to the monopoly market.
3.2. Ways by which market forces shape the organisational responses
There are various ways by which market forces which are shaping organisational
responses like for earning of more profits in any of situations makes the organisation to change
in policies which helps the firms in many ways like:
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Demand and Supply- Market conditions are not stable in any of the point. It is rapidly
changing which affects the demand and supply. So this company has to monitor changes which
are prevailing in market and make the policies accordingly. This helps the employees to deal
with any market situations, for dealing with these market situation that helps an entity in making
changes in its policies and strategies. Primark is dealing with these changes of market situations
to gain experience (Grosanu and et.al., 2015).
Customer opinion- First and foremost work of entity is to observe the buying habits
which helps in fulfilling demands of consumer. If company has not made changes accordingly
then it will move out from the competition. Firm has to make changes according to the business
environment (Epifanova and et.al., 2015.). For example, Kotak cameras which was very famous
at earlier times were not adopting changes which were necessary for survival of business due to
which company has lost its identity .It is one of the ways by which entity can develop its
business but, this entity has never implemented changes that’s why this is out of market. Primark
is regularly taking customer feedback which helps in meeting the demands. This will help in
gaining the customer satisfaction of Primark.
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Illustration 1: Demand and supply
(Source - Reacting to Market Force, 2003)

Technology - By introducing the latest technology in company which is available in
market helps in moving ahead of competitors. Company uses various technologies which is
available in market according to changing of business environment. Earlier all the companies
relied on the manual work but with the introduction of the technology made the work easier.
Primark is using the latest technology which is helping in making product more attractive. It is
one of the ways by which entity is doing the work in time effective way.
3.3. Cultural and the business environments shaping the behaviour of Primark
Cultural and business environment affects the entity. By doing PEST analysis company
can make changes in entity accordingly.
Political Factors- This factor involves changes in government laws which affects entity .
UK laws are strict but helps in regulating the business in a smooth way. UK laws help Primark in
working in the disciplined environment. If any of the law changes which are related to retail
industry affects the environment cited entity (Congleton and et.al., 2015).
Economic Factors- This factor includes the interest rate, saving rate, inflation rate,
employment rate and many more. It is affecting the business of entity. If changes in laws related
to the tax rate which are impacting on raising prices of items which are sold by the entity. This
affects the sales of Primark.
Social Factors- This factor includes the age, gender, attitude of people, buying capacity
of consumer and many more. This is helping entity to determine habits and taste of consumer
which will help in fulfilling consumer demands. Primark is doing business in UK so entity must
observe habits of consumers and gain consumer satisfaction.
Technological Factors- This factor includes use of latest technology by the business
which help in operating business in an efficient manner. With the use of new technology helps in
innovation in product which will attract customers. Primark is using latest technology which is
helping the entity in improving product so that sales can increase.
TASK 4
4.1. Significance of the international trade to Primark
International trade refers to selling of goods to outside countries. This helps in making
image of entity in international market. It is one of the way by which cited company gain
popularity and earn profit by selling products in international market.
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Broadens the horizon and market- If Primark is selling product in domestic market and
never sold products in international market then company is decreasing the ability of employees.
If company is selling the product in international helping to increase the sales of entity, trade
with more countries and gain popularity in market. It has increased the customer figures and
sales (Botha, Kourie and Snyman 2014).
Production cost - For trading in other countries most companies has to lower cost of
production. This is helping company to save cost like Primark is also doing same because entity
is not manufacturing goods itself.
Material - Most of raw material exported from other countries and without doing
international trade it can' be possible for using raw material. Like UK is exporting the pearls,
gems, precious metals, machinery, mineral fuels and many more.
4.2. Impact of the global factors on Primark
Global factors of business which is affecting business of Primark. These global factors
help in operating business. Some factors which are impacting the business are:
Employment - Businesses running globally creates the opportunities of employment. It is
one of ways by which entity is reducing the unemployment from a region. Cited company is
doing the business globally which creates more employment opportunities (Bah and Fang 2015).
Taxes- Taxes affect any business in adverse way which directly affects sales of entity.
This factor directly impacts on the profit of business. If taxes are lowered by government in that
case it is helping entity to lower prices of goods which will attract customers. It is helping the
entity to increase sales which will result in profitability position.
Competitors - In business if competitors increase which makes the risky position. This
affects the performance of entity. There are many competitors of Primark.
4.3 Impact of policies of European union
Impact of European Union on UK business and factors which are affected by the EU:
Environmental policies - Rules of UK are strict regarding the regulations of
environment. Environment Law 1975 is implemented by UK. which helps in creating the good
image in front of society. Government is promoting effective business which helps in creating
jobs.
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Taxation policies- With taxes only business are supported by the society. Many a time's
government was helped by the entity in doing the business like roads, development of projects
which is necessary in development of the nations (Armeanu Istudor and Lache 2015).
International policies- There are many policies of business which are promoting the
sales and import of goods by other countries.
CONCLUSION
Business Environment consists of internal and external factors which is impacting the
businesses. From this report it is concluded that impact of the global factors on Primark are
positive. It had also discussed that economic system which are helping in allocating of resources
effectively. It has also studied the responsibilities of Primark and development of strategies for
meeting them.
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