Business Environment Report

This report provides a comprehensive analysis of Primark's business environment. It begins by identifying various business types and Primark's objectives in meeting stakeholder expectations (customers, employees, investors, suppliers, government). The report then delves into economic systems, the impact of fiscal and monetary policies on Primark, and the competitive policies it employs. Pricing and output decisions in different market types are examined, along with the influence of market forces on organizational purpose. The report also assesses how business and cultural environments shape Primark's behavior. Finally, it explores the importance of international trade to UK businesses, global factors influencing UK organizations, and the impact of EU policies on Primark and similar UK businesses. The report concludes with recommendations and a self-evaluation.

BUSINESS ENVIRONMENT

Table of Contents
BUSINESS ENVIRONMENT........................................................................................................1
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Identification of various kinds of business and its purposes............................................3
1.2 Description of the extent through which Primark meets the objective of different
stakeholders............................................................................................................................4
1.3 Explanation of the responsibilities of Primark towards its stakeholders..........................6
TASK 2............................................................................................................................................7
2.1 Description about the economic system and its types......................................................7
2.2 Impact of fiscal and monitory policy................................................................................8
2.3 Competitive policies used by Primark..............................................................................9
TASK 3..........................................................................................................................................10
3.1 Pricing and output decisions in different types of markets............................................10
3.2 Impact of market forces on the organisational purpose. ................................................10
3.3 Judge how the business and cultural environments shape the behaviour of a selected firm.
..............................................................................................................................................11
TASK 4..........................................................................................................................................12
4.1 Importance of international trade to business organisations of UK...............................12
4.2 Global factors which are influence to UK business organisations.................................13
4.3 Evaluate the impact of policies of the European Union on UK business organisations.13
CONCLUSION .............................................................................................................................14
Recommendation ..........................................................................................................................14
Self Evaluation ..............................................................................................................................15
REFERENCES .............................................................................................................................16

INTRODUCTION
In order to survive in the competitive market, every business organization have to analyze
its business environment(Wu, 2009). It is a mixture of internal and external components which
largely affects the business activities and function of the corporation. By conducting effective
analysis, firm can operate its business function in the country. In other word it can be said that
business environment is that composition of internal and external factors which influence firms
entire process, system and practices. It includes various kinds of stakeholders such as employees,
customer, government, investors and suppliers. In order to bring effective functioning, company
have to consider all stakeholders participation and interest. The present project defines the
various kinds of internal and external components of business environment and its impact on the
activities and function of the Primark. It is world famous subsidiary company of the ABF
(associated British food) group. It have more than 100 stores across British and Ireland and it has
become distractive for offering unbeatable value whilst never losing its innovative, fashion drive
edge. This report has addressed the fiscal and monetary policies and its impact on the housing
and farming business(Wild, Wild and Han, 2014). Furthermore, various kinds of economic
system and its importance in the economy has clearly defined in this report. The major objective
of this research is to understand the impact and importance 0of business environment on the
Primark and other retail businesses. In addition to this, in the last part of the report addressed the
significance of international trade to UK business organization.
TASK 1
1.1 Identification of various kinds of business and its purposes
Private limited company- The Primark is the world famous retail outlet which has
launched in 1969 from Dublin and Ireland. Now it has expanded its business operation in the
Europe, UK and many part of the British. Generally, a private limited company have objective is
to generate profitability by making customer satisfaction. Beside this, this types of organization
generates the profit so as they can render effective return to its shareholders and investors.
Similar to this, Primark have also objective to earn maximum profitability by deliver excellent
quality of product and services and make its customer highly satisfied (Chow T and et.al.,2012).
For this purpose, cited venture continuo’s giving its best efforts to produce excellent quality and
innovative products. Primark is dealing with consumer products such as clothes, shoes, home

ware, women accessories, kids wear etc. Aim and objective or Primark is to provide the public
with the good quality products at the cheap rate which helps in attaining the goals and objectives.
Mission statement of the company is to provide the better quality product to the consumers
which is relatively low so that they can attain the success at the time of high competition.
Public sector organization- Public sector organization are those whose business operation
and ownership are being managed and controlled by the government of an economy. The major
objective of these organizations is to exertion for common welfare society(Ullah and Lai, 2011).
Thus, public sector firms use to offer services to society disregarding their ability to pay. For
example, national health service is a public sector corporation which is administered by the
government and offer health care and medical services to the society.
Sole proprietorship – The business entity which operates at the small scale business.
Along with this it is owned by single owner who takes the responsibility in managing the
operations of the firm.
Partnership – It is a business enterprise that is owned and controlled by the two or more
partners. Along with this it helps in managing the activities of the business entity and share all
the profits and losses.
Charity organizations- This kind of business have objective is to work for welfare of
society or any community rather than making profit and it is a non profit companies. For
example, the American red cross is a charity firm which provides bloods to various persons or
patients who required blood at the time of crisis.
1.2 Description of the extent through which Primark meets the objective of different
stakeholders
In every business organization, stakeholder is those people who have various kinds of interest
of the corporation. They are those people which directly affects by the business activities and
function so firm have to make consider while it takes any kind of action and decision regarding
business practices and function. In the similar way , Primark’s stakeholders such as customer,
employees, investors, suppliers, government also influences by the business norm, policies,
practices and function. The way in which said firm use to fulfill its responsibility towards
stakeholders are as follows-
 Customers- Primark is a company which deals with the customer products like clothes,
accessories, home ware good etc. So that customer can highly affected by the business

decision of Primark. They are those people who have interest to know about products
features, prices, offers, discounts, product customization etc. Therefore, company have
liability to share each and every decision regarding products to customer so as they can
aware about it (Botha, Kourie and Snyman, , 2014). Furthermore, customer always
wants that products and services from the corporation which are high quality and
available in the reasonable prices. In order to make customer satisfied, company have to
deliver excellent quality products in a reasonable prices. Moreover, for fashion conscious
consumers it makes innovations in clothes with latest trends.
 Employees-As it has discussed that Primark is retail outlet so in order to carry
business functioning in a smooth manner, employees play a very crucial role. Primark
have more than 700000 employees whose giving their best efforts to produce
effective goods and services(Trkman, 2010). They are highly influenced by the
decision and practices of Primark. They are interested in effective salary, bonus,
increment, promotion, effective working condition and welfare schemes. Primark
have responsibility to provide effective working condition and incentive so as they
can retain for long time in firm and encourage for high productivity and performance.
In addition to this, employees are also interested to know the business financial
condition so company has responsibility to take their participation in the business
decision making process.
 Manager – Manager of the company help in managing all the business activities so
that they can attain the success.
 Competitor – Primark having the so many competitors in the market and they have to
sell the product at the low price which help in attaining the targets.
 Suppliers- Suppliers are another major stakeholder of Primark who have interested in
taking effective order of raw material and semi finished goods. Primark can make
them satisfied by make effective order to make regular and timely payments.
 Government- Primark have responsibility to follow all rules, regulation, code of conduct,
legislation which have developed by government. By this, company can maintain good
relation with this stakeholder. In addition to this, use to fulfill these obligations by
performing fair trade practices, fair competition and also maintaining required
environment safety in all operations.

1.3 Explanation of the responsibilities of Primark towards its stakeholders
CSR is a corporate social responsibility which is a form of corporate self regulation integrated
into the different level. In attaining the success they have to maintain the relationship with the
public. Along with this company members have to use the proper policies as well as strategies
which aid in obtaining the targets and by that they can not face any problems.
As per the above discussion it has been ascertained that there are various kinds of
stakeholders of the Primark firm and it have various roles and responsibility towards them. There
are some strategies through which cited venture can meet the responsibilities and expectation of
different stakeholders. These strategies are as follows- Keep informed- Primark have responsibility to keep informed to customer about the
product prices, features and offers so as they aware about it while they purchase.
Customer always wanted to know the accurate information about the product and
services. In order to ful fill the responsibility toward customers, company have to
informed them time to time about the products updates (Zhang and Huang, 2012). On the
other hand government also wanted to know the financial status of corporation so firm
have to keep informed government about the business activities, functions and financial
condition. Managed closely- Employees are major stakeholder for cited venture so that it have
responsibility to manage them in such manner so as they can motivate and encourage.
They wanted to know the company policies, practices and financial condition. Firm have
to take participation of personnel’s in the business decision making so as they can aware
about corporation status(Teece, 2010).
 Keep satisfy- Suppliers are another important stakeholders whose wanted to gets effective
order and payment for raw material and semi finished goods. Primark have responsibility
to make regular order and provide their payment on time. On the other hand investors are
those person who invest their capital in the business in order to get effective and fair
return. In this manner, firm has responsibility to keep them satisfy by provide fair return.

TASK 2
2.1 Description about the economic system and its types
Economic system is a combinations of diverse range of institutes, agencies, patters
decision making process, entities that comprise the economic structure of the given community.
In other word it can be said that economic system is a mean by which countries and government
distributes resources. The major objectives of this system is to control the physical resources,
labour, capital, entrepreneur and information resources (Waithaka and Ngugi, 2013). Every
country have their own economic systems and each system have major three basic question that
is what to produce, how to produce and in which quantity to produce. The various kinds of
economic system are as follows-
Command economy is that economy which is associated with the economy which is related to
the socialist. They have to do the proper resource allocation which can be done through the
central planning by the regulatory body. Land and capital is owned collectively.
Free market economy. In this economy the decision is made by the resource allocation and it is
made by the free market and the individual person are free to make their own decisions. Capitalism – In this economic system , private institutes and individuals owned and
controlled the production and allocation of resources. They have right to decide that what
to produced and in which quantity to produce and distribute. Furthermore, all activities
related to defence, policies, courts of justice are managed by government of country. Socialism- This economic system is major objective is to social benefits and personal
interest. In this system production and allocation of resources are managed and control by
state. The individual in this system have obligation to supply foods, lodging and clothing.
China adopted this economic system as it intends to become an individualized nation
with increased role of public sector enterprise (Cai and Yang, 2014). Communism- In this economic system, process of production, allocation of resources,
distribution are controlled and managed by the central states authority. Cuba adopted this
kind of economic system as it assures the effective condition of working class
population.W2ith assistance of this economic system, it can gained military and financial
support from Russia.
 Mixed economy- This system is a mixture of socialism and capitalism, under this private
firm allowed and even managed to operate a large number of industries. United kingdom

adopt the mixed economic system under this it increase their exports and cut out imports
by making their system enough able to managed it. This economic system is major
objective is to social gains and personal interest.
2.2 Impact of fiscal and monitory policy
Economic system of UK is managed and governed by combined efforts of Chancellor of
UK and Bank of England. Fiscal and monitory policy are the tools used by government of UK to
regulate respective economy in most appropriate manner. Depending upon situation prevailing
within economic environment, these tools of economic concept are applied to enable cited
economy for overcoming prevailing issues and complications. Impact of both of the policies are
different as mentioned below:
 Fiscal Policy: Efforts laid by respective government for influencing particular economy
in accordance with policies issued includes implementation of new regulations. Attempts
are made by political authority to influence economic activities taking place within
geographical boundaries of United Kingdom by changing the pattern of total government
spending or taxation rates. Application of fiscal measures have undergone decreased
government preference for resolving economic issues(Moutinho, 2011). However, during
inflationary situations government makes possible efforts to reduce the rate of inflation
by reducing overall spending in providing subsidies to farmers and also restricting
financial spending of public.
 Monitory Policy: Monitory policy includes attempts made by respective authority of
economy in influencing interest rates. Interest rates are imposed on loans to be acquired
by citizens and various companies. During inflation, government imposes higher interest
rate on loans to be obtained so that people will have to spend more for obtaining loans.
This will directly impact overall supply of money(Ruff, 2006).
 Housing; Aggregate demand thereby gets reduced automatically as people would prefer
not to invest unnecessarily in taking house loans and rather focus on saving. Inflationary
pressure thus gets reduced. On the other hand, during recession government increases
total spending by investing in public campaigns for their welfare so that aggregate
demand gets increased along with. Weakened economic conditions can be overcome by
creating more demand in market.

 Farming; During recession, government decreases rate on loans to be acquired for
housing, so that people get attracted for taking more loans and thus aggregate demand
gets increased. Farmers are appreciated to obtain loans for carrying out farming activities
to boost up overall economy.
2.3 Competitive policies used by Primark
Competition commission act was a non departmental public body which is responsible
for the investigating mergers, markets and the other enquiries which is related to the regulated
industries under the competition law in UK. This act helps to merge companies in one to make
better services in their industry. Royal mail can be a example for this which is now a leading
organisation in this sector. This policies has replaced by the Monopolies and Mergers
commission act on the date of 1 April 1999. The cited organization is facing a strong competition
within industrial environment of manufacturing garments and other basic products required by
customers for daily life routine. It has to consider level of competition and its impact for
designing appropriate policies and marketing plans. Various regulatory mechanisms and
competitive policies are issued by government to influence competition in appropriate manner.
Some of these regulatory mechanisms are mentioned below:
 De-Regulation: Appreciation of competition is beneficial for economy as well as customers.
Protection of interest of customers can be attained by reducing restrictions or strict
regulation on business activities carried by cited firm so that number of suppliers will strive
hard to produce quality products to attract more customers.
 Privatization: Unlike recent years, Primark is now operating on its own as an independent
company. Initially, strict regulations imposed such large scale companies to operate within
government supervision. However, privatization enabled the cited firm to operate on its own.
 Strict laws on competition: Being a part of European Union, the cited company is
protected against unfair trade practices of competitors(Monks and Minow, 2008).
 Price based competition: This type of pricing policy is implied so that each of the company
operating within similar industry, sells out its products on similar pricing policies. There is a
very little scope of difference among there price thereby increasing competition. Primark
extended the quality criteria to overcome competition.
 Service based competition: Companies following such policy focus on providing better after
sales services so that they can attain competitive advantage against other rivals.

TASK 3
3.1 Pricing and output decisions in different types of markets
Each and every market is having their some elements which makes a direct impact on the
pricing and output decisions. Here is some markets types;
Perfect competition; This is a type of market which is having a various buyers and sellers for a
particular product and service. This type of market can be found in the grocery and merchandise
products. Prices and output decisions are depends on the competitive companies. All companies
are having competition to give their product in minimum prices to attract customers. Primark and
Asda can be a perfect example for this market(Klapper, Lewin and Delgado, 2011).
Monopoly; One company lead on the market and they are having big scope of customers, this is
called as monopoly market. The production company can make their decisions on prices and
they can make mores profits with increasing prices. They can make variance in their production
to maximise their profits by making shortage in the market. Intel is having monopoly in their
market and it is a perfect example for this.
Oligopoly; This a type of market which is having limited production companies to make
products and services in the same. Few companies dominate on the market and they are having
limited scope to make their services. Pricing decisions are taken by the mutual understandings of
these firms to share equal profits. Mostly these companies are making lower output to make
profits and retain their market position. British airways and Air France can be example for this,
they are making their services on the same route.
Duopoly; Mainly two companies dominate on the market and they are having their mutual
understanding to gain profits. These types of companies are making higher class and costly
products which have limited buyers. In this market segments, buyers and sellers are having tgie r
focus on quality not on the pricing(Kelliher and Reinl, 2009). Mostly these companies are
making their production when they are having some orders from their clients.
3.2 Impact of market forces on the organisational purpose.
Demand curve is the graph which is depicting the relationship between the price of the
certain commodity and the amount of that consumers are willing and able to purchase at the
given price. Supply is the economic concept which describe the total amount of the specific
goods and services that is available to the consumers. Supply and demand can be stated as the

market forces which is having a high pressure on the organisation. These market forces are
having a direct impact on the production and they have to make adjustments in the production to
retain their prices and market position. Every company is having their own market to sale out
their products and services. Market is having different situation and it have to be managed by the
company. In festive season, peoples and customers wants to buy new products so the market is
having high buying situation(Kelliher and Bernadette Henderson, 2006). This is a type of golden
chance when a company can get maximum profit by making adjustment in their production line
to increase their production according to the demand. But some time it is having lower face when
demands are going down so company have to make lower production to adjust the situation and
to retain their prices. Some of competitors are having a policy to destruct the market so some
times they are making more production with lower cost, it is a time when the company have to
manage their market position via managing their quality in their products. For an example,
Primark is having a lot of products to sale and they have to manage sale each of product, if they
are having lower sale in some products, they have to make some discount on it and make lower
production to regain the position of that particular product.
3.3 Judge how the business and cultural environments shape the behaviour of a selected firm.
A firms are highly impacted by the various factors of business as well as cultural
environment. These factors are mainly categories into two are internal and external environment
factors. The internal factor in which the employee change behaviour, strategies, process and
organisational structures. Whereas, the external environment factors in which its includes
demographic, technological, social, political and legal aspects etc(Kang and Han, 2008).
Therefore, in the context of Primark are develop their business in various countries in which they
have to deal with the different types of customers by maintaining their culture and understand the
behaviour. It has been seen that various policies are formulated by the government in each and
every country affect the business due difference in each countries rule and regulations. Some
country used socialist economy and another used mixed and capitalist economy they affect the
Primark business when they are operated. However, it becomes a responsibility of the firm to
evaluate these economic factors impact on its business. It adversely impact the economic
conditions of the UK such as per capita income of its countries and purchasing power of the
buyer of various different countries. Beside this, various external factor such as change in the
attitude of consumers, latest technological impact the firm and also legal aspects affect the

primark business also. Therefore, So, it becomes a responsibility of the organisation to maintain
these factors internal and external in an effective manner for the smooth running of operations.
This will help them to shape the organisational structures by analyse them with the culture and
business environment.
TASK 4
4.1 Importance of international trade to business organisations of UK
Process of purchasing and selling cross the boarder of particular nation or doing products
and services transactions from one nation to another nation, known as an international trade. It
plays an integral role in each and every business entity of each country. With help of the
international trade the company is easily able to buy or sell goods and services in another
country(Johnson, Lenartowicz and Apud, 2006). It helps to the UK companies up to greater
extent in order to make business profitable as well as achieve its goals and objectives. The trade
policies are formulated by regulatory body which is beneficial for the UK enterprises. With help
of the policy the organisations are able to earn international currency as well as various cultures,
values and strategies of another countries. By this the company can make firm more beneficial in
the industry where it operates. Further, another significance of the international trade for UK
companies is that they are able to increase more number of consumers (Importance of
International Trade, 2017). It helps to achieve economies of scale, it is a parameter where total
cost of production get decreases against to increase output level. When customers increases then
production level is as well which lead to decrease cost of the production and enhance profit of
the firm as well.
Furthermore, there are another importance of the international trade are such it can create
effective reputation in the international market. It helps to different organisations of every sector
because it allows every type of business in international market. From this the firm can gain
competitive advantage from its rivalry firms after providing better goods and services as lower
price. Apart from this as per the international trade policy the UK business organisations are
easily able to purchase and sell the goods and services which lead to achieve company's aims and
objectives smoothly. Hence, it can be said that there are international trade is very important for
the enterprises of UK country.