Comprehensive Business Environment Analysis of Primark's Operations

This report provides a comprehensive analysis of Primark's business environment, examining its organizational structure, purpose, and stakeholder objectives. It delves into Primark's operations across various countries, highlighting its retail strategies, product offerings, and pricing policies. The report investigates Primark's approach to stakeholder management, including employees, government, suppliers, customers, and lenders, and analyzes how the company meets their objectives. It also explores Primark's corporate social responsibilities, ethical trading initiatives, and strategies for environmental sustainability. Furthermore, the report examines different economic systems, including Cuba and the UK, and their impact on businesses, along with fiscal and monetary policies, competition policies, and market structures. Finally, it assesses the significance of international trade, global factors, and EU policies on the UK business environment, offering a holistic view of Primark's operations within a complex and dynamic market.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Determine what type of organisation is Primark and its purpose.....................................1
1.2 Level at which Primark meet the objectives of its various stakeholders..........................2
1.3 Responsibilities of Primark and strategies employed to meet them.................................3
TASK 2............................................................................................................................................5
2.1 Different economy system................................................................................................5
2.2 Impact of fiscal and monetary policy...............................................................................6
2.3 Different competition policy and its impact on the activities of company.......................7
TASK 3............................................................................................................................................7
3.1 Pricing and output decisions of business in different market structures: ........................7
3.2 Shaping of organisational responses by market forces:...................................................8
3.3 The business and cultural environment role in shaping the behaviour of Primark:.......10
TASK 4..........................................................................................................................................11
4.1 Significance of international trade to UK business........................................................11
4.2 Impact of global factors on UK business......................................................................12
4.3 The impact of European union policies on UK business environment:.........................12
Conclusion.....................................................................................................................................13
REFERENCES ............................................................................................................................15

INTRODUCTION
Business environment can be influenced by external factors as well as internal also.
These can affect the enterprise directly or indirectly. Some elements are controlled by the
organisation but many of them are uncontrollable such as tax rate, inflation etc. These can also
affect the production of the company. It also covers customers, government, suppliers, cultural
etc. if business understand the environmental factors very well then it will help them to build
their reputation in the market. They can also compete their competitors and enhance their profits.
It will help them to know the market conditions. The purpose of this report is to identify the
objectives of stakeholders in Primark. They can make strategies to achieve the desired goals and
objectives (Adeoye and Elegunde, 2012). Company use various types of resources in their
production so that they can develop products and services in an effective manner. They also
analyse their competitors in the marketplace so that they can compete them. Primark decide their
pricing policy appropriately which will help them to attract more customers towards them. It is
necessary to assess the culture that will aid them in their production system. It is necessary to
determine the impact of global market so that company can make policies to eliminate it.
TASK 1
1.1 Determine what type of organisation is Primark and its purpose
Primark is a retail company and doing their business in various countries such as UK,
Spain as well as Italy also. Its headquarter in located at Dublin. This organisation is a secondary
of Associated British Foods. It produces different type of products like home wear, beauty
creations, cloths for men, women, child and stylish accessories. They have strong brand in the
market which will help them to take competitive advantage from their competitors (Agarwal,
Grassl and Pahl, 2012). Product prices of Primark is reasonable compare to other brands which
are varied in the same category. They also sell their goods by using online sites such as
Amazon.com etc.
Company provide products and services of best quality to their customers at reasonable
prices. Their main aim is to achieve more clients so that they can enhance their profits. There are
some important objectives of Primark which are described as below:
 Company provide goods to the people at lower prices and also maintain quality so that
they can afford.
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 Prices of their products and services are lower compare to their competitors which will
help them to achieve more profits.
 They sell better goods to their customers.
 The main aim or Primark is also to provide employment to the people of their country so
that they can help to reduce the poverty line of nation.
 They also provide growth and development to economy.
Primark also involved in some other functions such as:
Public sector: Company plays an essential role in this aspect. Every organisation is
influenced by the government of country where they provide their services (Al-Swidi and Al-
Hosam, 2012). It may includes health, education etc. If they fulfil their requirement which is
related to their customer then it will help them in their development.
Charity: It provides aid to those people who are needy. There contribution is too much in
this sector. There main purpose is to provide health and safety to the people. They also assist
them in their emergency situations. They give appropriate advice to people so that they can get
rid from dilemma.
Cooperative: There are many companies who do their work together to achieve the
desired goals and objectives in an effective and efficient manner. In UK, there is an organisation
named AWAZ who works for the improvement of women. Primark also has speciality in
packing as well as they provide food in each and every part of the Country.
1.2 Level at which Primark meet the objectives of its various stakeholders
This company is doing their business vary effectively and efficiently so that they can
achieve their desired goals and objectives. They have various bondholders like employees,
clients, banks, government etc. The stakeholders of Primark are discussed as below:
Employees: They are part of the company and do their work appropriately so that they
can easily achieve the desired objectives (Aterido, Hallward-Driemeier and Pagés, 2011).
Workers are an integral part of the business because without them they cannot do their activities.
Primark generally outsource the products which will help them to fulfil their customers demands.
The valuable part of the company is their sales manger. They also motivate their employees so
that they can enhance their performance. Company also create some schemes which provide aid
to their workers.
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Government: It is necessary for every type of organisation to fulfil the necessary
compliances. Every country has their own rules and regulations which businessmen have to
follow. They also made policies for the company that they have to follow while they doing their
business at international as well as national level also.
Supplier: In UK, there are numerous providers who provide finished products to the
company. Primark always clear there payments in a specific time which will help them in image
building (Avramenko, 2012). While they are entering into a contract they can also having a issue
of promissory note to their supplier. They can easily redeem that note according to their choice.
Clients: If company has no customers then they never survive in the marketplace. It is
essential to provide products and services to them according to their needs and wants. It also
helps to give them proper satisfaction. Primark also maintain quality of their products so that
they can attract many new customers towards them. They provide goods to service users at
reasonable prices which will also help them to enhance their profits. Company have to maintain
the supply and demand in a proper manner.
Lenders: In this, it will include bank, financial institutions etc., they provide loans to the
company so that they can do their activities smoothly. They always pay the interest timely which
will help them to maintain their credit rating.
Promoters: The person who started the business in known as promoter. The main aim of
them is to maintain the image of the company as well as to achieve higher profits. Primark also
give high interest to their promoters which will help them in maintaining their brand.
Person in concert: In country there are also various types of people who take interest in
their business (Boons and Lüdeke-Freund, 2013). They provide good return to their bondholder
which will give them satisfaction. Primark also comply each and every law which is essential.
1.3 Responsibilities of Primark and strategies employed to meet them
It is essential for every organisation to fulfil the obligations which is related to society.
There are some essential duties which is required to accomplish by the company, are described
as below:
 They provide employment opportunities to the people of the country which will help the
economy in their growth and development. Company also give an equal chance to both
male or female.
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 It is essential for them to take care of the environment and they can take appropriate steps
to eliminate or reduce the pollution.
 They deal with their customers and suppliers with proper confidence and morale which
will help them to achieve their trust and loyalty.
 Primark support the each and every people of the nation.
 They fulfil their corporate social responsibilities which will help them to increase their
reputation in the market as well as they can compete their competitors.
 They create an effective policies for their business by using laws and regulations. They
also check that they do their activities ethically.
 Employer or manger of the company provide proper satisfaction to their employees or
workers regarding their job.
Primark make some essential plan and strategies so that they can fulfil their goals and
objectives effectively and efficiently, these are discussed as below:
Ethical trading initiative: It is essential for every type of organisation to do their business
ethically it will help them to provide growth to their company (Chandrasekar, 2011). If
organisation do illegal practices in their business then it will harm the reputation of the Primark.
Supporting local community: Organisation give support to needy people through charity. They
provide training and development to the people who are not financial stable and it will help them
in their living.
In relation to waste regulations: It is essential for the Primark to make strategies regarding the
environment so that they can keep it safe. They also manage the waste, for this purpose they
recycle materials which can be used by company again.
Avoidance of carrier bags: Organisation take initial step to avoid the use of bags which are
made by plastic. They replace it by the paper bags.
Corporate social responsibilities: It is very essential for any company to fulfil the social
responsibilities so that they can achieve the success (Commander and Svejnar, 2011). They can
make plan for this that will help them to take advantages from their competitors in the market
place.
According to above strategies it has been concluded that it is necessary for any company
to make effective plan so that they can achieve their organisational goals and objectives in an
effective manner.
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TASK 2
2.1 Different economy system
Every country has their own economy system which businesses have to follow. As all
country have their own culture and government so that company run their operational activities
according to it. Some of the countries economic system are described as below:
Economy of Cuba: It is located as a country of island and they follow the rules and regulations
which is planned by them only. They have planned economy. Industries are run by labour and
government in this nation. People generally want to do their work by and this may be known as
self employed (De Jonge, 2011). In Cuba, transportation cost is also very low comparison to
other countries. The rent of house is affordable by every type of person. Children can get free
education and the reward system is also much effective. Income is divided among all the people
equally.
 Some of the policies are ineffective so government of this country made necessary
changes in it. They also update their tax rates timely.
Economy of United Kingdom: The GDP rate and purchasing power parity is high in this
country which will provide more growth and development to the economy. They have mixed
system in their nation. There service sector is also very effective and efficient. According to the
research it has been founded that UK was the first country in the world who industrialised firstly
and they also adopt the various policies related to it (Hall, 2011). There is an effective decision
taken by the government which leads BREXIT. As result to it the value of pound fall and breaks
the past records.
 Tax is the major issue in UK because it is collected by both government central and local.
As the time passes the rate of it increasing very faster.
 The system of economy is generally managed by the HR treasury of the nation. They
receive investments from various countries which will help to provide growth and
development to their economy.
Economy of China: The population of this country is very high and it is growing rapidly day by
day. They contribute in the manufacturing business mostly. They use socialist system in their
country. China stands on the second position according to the GDP rate. Their policies are also
effective and flexible which can be altered by government as per the needs.
 They export goods to the other country in large range.
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 China also made strategies regarding the regional development .
 The tax rate of this nation is also appropriate.
 They do their business in both sectors such as private as well as public also which will
help to fulfil the needs and wants of the customers.
2.2 Impact of fiscal and monetary policy
Fiscal policy: This is an effective method which is used by the government. The flow of money
is also controlled by the recognized authority. With the help of this government can easily
control over the money (Isik, Jones and Sidorova, 2013). If government want more growth in
their economy then they invest large amount in different action plan but id they want to control
over the inflation rate of the country they spend less in the plans. If there is an increment in the
tax rates then the policies of the company will be lower down.
Monetary policies: Government perform many functions so that they can control the economy
like increase or decrease the rate of interest, budget plan etc. This policy provide growth and
development to the country also.
There is some impact of the fiscal and monetary policies on the farming and housing policies are
as follows:
Farming business:
Monetary policy Fiscal policy
Government use this policy to promote the
business which is related to farming. They
donate large amount in it so that it will leads to
low cost of production. Farmer can also get the
loan at the lower interest rates. It will also help
to provide growth and development to the
country. By this inflation rate of the nation can
also go down.
It helps to give growth to the nation.
Government can use different methods so that
they can use if in an effective and efficient
manner. For this purpose they can also issue
various types of bonds and securities.
Housing business:
Monetary policy Fiscal policy
Government use this policy to promote or Ministry bodies can use different types of tools
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develop the housing businesses so that they can
reduce the interest rate and also help them to
improve the condition of real estate.
and techniques for the development of housing
businesses. They make policies and regulations
for this purpose.
2.3 Different competition policy and its impact on the activities of company
There are certain policies which is related to competition are described as below:
De – regulation: This is adopted by the company so that they can easily reduce the monopoly in
the market (Kaufmann, Kraay and Mastruzzi, 2011). This may include merger and acquisition
because with the help of them monopoly can be eliminated from the market.
Privatisation: This policy is generally adopted by the company so that they can develop the
economy. It also in favour of ownership transfer.
Laws of anti-competitive behaviour: according to the policy of competition it helps to present
fair deals in the marketplace. They have to follow laws and legislations to fix the price of
products and services so that they can eliminate or reduce the unethical practices from the
market.
Import tariff reduction: With the help of this company can import various products and
services at the reasonable prices. If the tax rate reduced then it will assist in growth of an
organisation.
Market liberalisation: This is an effective competition policy which is faced by the company.
When monopoly reduced or eliminated from the market then it is essential to manage it properly.
Example: In UK, there are may supermarkets which faced monopoly in the marketplace (Klapper
and Parker, 2011). As result to it many of other organisation can feel controlled such as ASDA,
Tesco etc. it is essential to deduct it so that economy can be developed easily.
TASK 3
3.1 Pricing and output decisions of business in different market structures:
The organisations trading in the market use the structure of market as to determine their
pricing and output decisions. There are many activities prevalent in current scenario. The firm
has to analyse its strengths and weakness while accessing available market opportunities and
threats. For making sure that the company is following right strategy, it is very important to
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understand the concept of different market structures. There are four types of market structure
prevalent in present scenario. These promote different pricing strategies and out put decisions: Perfect competition: This structure type is considered as a hypothetical market, where
the competition is at its peak. It is argued by the economist that this market structure will
promote the best conditions and out for customers. This type of market have large
number of sellers and buyers (Lee, Sohn and Ju, 2011). A common homogeneous product
is old by every single firm and there are no entry or exist barriers in the industry. The
companies do not have to pay extra advertisement cost as the product is common and
everyone knows about it.
◦ Pricing decision: In this type of market structure the firms are considered as price
taker as they fix the prices as prevalent in the common business environment.
◦ Output decisions: These decisions are taken as per the market conditions. Everyone
manufactures a amount which they can sell.
 Monopoly: This is a market structure which states that there is only one company in the
market which has full domination in the product line. This is a situation which is
prevalent when no competition exist in the market. The pricing and output decisions are
taken as per the company requirement of earning profit.
 Oligopoly: It is a market structure where few small companies have large market share.
It is very similar to monopoly but here two or more companies dominates the market.
This type of structure promotes the pricing and output decisions which are decided by the
small companies at their levels. This enables them in setting the prices at higher level and
output at lower level.
 Duopoly: This is a structure where two companies dominates the market. It is considered
as a most basic form of oligopoly market (López-Gamero, Molina-Azorín and Claver-
Cortés, 2011). But in this only two companies have full domination. If the two companies
starts deciding the pricing and output decisions together than it will be very harmful for
consumers.
3.2 Shaping of organisational responses by market forces:
The companies have to focus on developing a proper response to the market events. If the
companies fails to respond properly to the demand and supply changes in the market then it will
fail to achieve the required level of success. The organisations which fail to respond properly to
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the demand and supply changes or any events in the market are punished by the whole
environment in terms of losses. There are various factors for which the company have to prepare
a proper response. These factors are: demand, supply, consumers preference, quality, cycle time
and profitability/feasibility.
Demand and supply are the biggest factors which can impact the organisation and its
functionality. Basically demand refers to the customer desire and willingness to pay for a product
and service. And supply concept states about the quantity of product available for sale in the
market. These two determinant have to be dealt with a well defined response (Moutinho, 2011).
If Primark fails to contain the changes which are taking place then it suffer big losses.
For understanding this better a situation is taken where Primark has launched a new series
of footwear and clothing. The demand of the product is lower than the supply. This will create a
loss making situation for the company. The company has to analyse the level of demand for the
specific product like clothing and footwear. It will have to determine different types of customers
who will be targeted and then decide the output and supply. This will help the company in
maintaining a marginal gap which will avoid any loss making situation.
Above diagram states about the changes in the demand and supply of a product. It is
given that a given increase in demand of clothing and footwear of primark can be only tackled
with achieving the equilibrium point. It is a point where demand and supply match each other
and there are no gap's between them (Onetti and et. al., 2012). A company have to use proper
tools to analyse different factors which can impact the demand and supply and it has to ensure
that it is able to maintain these factors.
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3.3 The business and cultural environment role in shaping the behaviour of Primark:
The two factors which have the highest level of impact on business are existing business
and cultural environment in the country. The business environment refers to that condition which
exist in the country for doing business. It is divided into two parts, economic environment which
is made up of different economic policies, system and conditions prevalent. On the other hand,
non-economic environment consist of different natural resources, demographic conditions and
technological advancements. Primark currently is serving in around eleven countries which have
totally different environment and conditions. The company's operations are depended on the
business cultural situation of the countries. The economic environment is not consistent in all the
countries, there are nations which are still struggling with their economic conditions and have
not recovered from the recession hit of 2008. Also there is huge difference into the per-capita
income of individuals. Like Portugal and Greece have much lower per capita income than United
Kingdom now because of the financial crisis (Porter and Rivkin, 2012). The economic situation
is still not at par in some European and western countries which have to be analysed by the
company and then every single move has to be made. The company is currently following the
criteria which helps it in analysing the financial situations. Any change in the national or
international environment will lead to the updatation in the strategy of Primark.
Culture is a variable which have a direct impact on the organisation and its functioning.
Social issues are faced by the companies when they switch to new countries or regions. These
problems are related with the beliefs, views, way of living, traditions, values and ethics. For
example, there are different countries where majority of people are vegetarians hence a firm
selling non vegetarian meals will not be successful (Sena Ferreira and et. al., 2012). The cultural
issues having high interference rate in the decision making of organisations. Primark has to look
at the potential places which have the same requirements that can be fulfilled by the product
ranges that they have to offer. The company also have to look at the political and working
environment too as these are the indirect forces which impacts the cultural and business
environment.
The political environment acts as a indirect factor which have indirect influence over the
culture. For example, if the country population is shifting towards right wing or left wing then it
will have its impacts on the culture. If there is instability in the politics of a nation then it will
have certain cultural issues too. There is high possibility of company failing to attract the
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