Analysis of Primark's Business Environment and Strategies

This report provides a comprehensive analysis of Primark's business environment, covering various aspects such as organizational purpose, stakeholder objectives, and corporate responsibilities. It delves into Primark's strategies to meet stakeholder expectations, including customers, employees, and financial institutions. The report also examines different economic systems, with a focus on fiscal and monetary policies, and their impact on businesses. Furthermore, it identifies key competition policies and regulatory mechanisms within the UK. The significance of international trade to UK businesses and the influence of global factors are also explored, along with an evaluation of the impact of European Union policies on UK businesses. The report incorporates illustrations to support the analysis and provide a clear understanding of the concepts discussed.

Business
Environment
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TABLE OF CONTENTS
Introduction .....................................................................................................................................3
Task 1...............................................................................................................................................3
1.1 Discuss the purpose of different organization and Primark...................................................3
1.2 describe the extent to which Primark meets objective of its stakeholders.............................3
1.3 Explain the responsibility of Primark and strategies employed to meet them.......................4
tASK 2 ...........................................................................................................................................5
2.1 Explain a type of economic system operated in a different country......................................5
2.2 The impact of fiscal and monetary policy .............................................................................6
2.3 Identify five competition policy and other regulatory mechanism .......................................7
Task 3...............................................................................................................................................8
3.1 Explain how Pricing and output decision of business is determined ....................................8
3.2 How market force (Demand and supply) shape organisational responses..........................10
3.3 How business and cultural environment shape the behaviour of Primark..........................11
TASK 4..........................................................................................................................................11
4.1 Discuss the significance of international trade to UK business...........................................11
4.2 The Impact of Global factor on UK business......................................................................12
4.3 Evaluate the impact of policies of the European Union on UK business............................13
Conclusion ....................................................................................................................................14
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Illustration Index
Illustration 1: Different type of stakeholder.....................................................................................5
Illustration 2: Type of economy system...........................................................................................7
Illustration 3: Perfectly elastic demand curve in a perfect competition.........................................11
Illustration 4: demand and supply curve........................................................................................13
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INTRODUCTION
Business environment is combination of internal and external factor that influence
activities of business enterprise. Some of external factor such political factor. Social factor, legal
factor etc. impacts companies to a great extent. The present report is based on a Primark which is
an Irish clothing retailer and one of the most renowned brands in UK. This report covers; the
extent to which Primark meets the objective of its different stakeholder is described. Along with
this, the responsibility of Primark as organization is explained. Apart from that, the significance
of international trade to the UK business is analysed in the research report.
TASK 1
1.1 Discuss the purpose of different organization and Primark
There are different type of organization which has different purpose and objectives. The
main objective of Primark Company is to serve its customer good quality products and services.
It aims at ensuring that all employee get equal opportunities and they are rewarded for the
success of the business. Mission of the Primark is to become serve its customers with quality
products and its vision is to become more trustable retailer company so that people love to work
and buy a products. On the other hand Marks and Spencer is a public company which operates in
different international market. Its mission is to create a retail environment that offers an
unbelievable value and variety and satisfaction to its customer. It vision is to remain a leading
retail organization and to improve everything. Further its objective is to provide a quality
products and service at a reasonable price to its entire customer.
1.2 describe the extent to which Primark meets objective of its stakeholders
There are different stakeholders of a Primark and the stakeholders are mentioned below as:
Customer: Customer are very important external stakeholder of Primark because the
company operates with an objective to satisfy the need and demand of all its customers.
Company need to fulfil the needs and objective of consumer by providing them a products and
services of good quality at fair price (Karadi and Gertler, 2015). For example, Primark need to
focus on changing need and demand of customers and make product on basis of the same.
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Employees: Employees are external stakeholders of company which plays very vital role
in success of the same. It is the responsibility of the organization to make sure that employee is
working in a safe environment or not. Further, the firm need to involve them in a decision
making process so that they may not dissatisfied. Primark is also required to provide them a job
security it helps in retaining them for longer period of time. For example; Primark need to take
idea from employee at the time of implementing a strategy so that they came to know company
objective and gaol.
Financial institution: Banks and financial institution are those who provide funds to
Primark Company for carrying out its smooth flow of operations and expansion (Jiménez,
Ongena and Saurina, 2014). It is a responsibility of Primark to pay the amount on time along
with interest. Further company also need to make a profit so that it can easily repay the loan
amount. For example, Primark need to take a loan from that financial institution who charges
less interest rate.
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Illustration 1: Different type of stakeholder
(Sources: Stakeholder of organzation. 2016.)

1.3 Explain the responsibility of Primark and strategies employed to meet them
There are some responsibility of a organization and strategy employed to meet them that are as
follow
Environmental and ethical issue: Primark have some responsibility toward the
surrounding environment and ethical issue. Company needs to make product and services which
do not harm the environment. For example, Primark company is making product which are
environmental friendly and not harm the health of people
Consumer legislation; According to this, the selected business enterprise needs to make
products which are of good quality so that customer may not get harmed by it (De Klerk, Cohen
and Alagarsamy, 2013). Further, it needs to ensure that fair prices are charged against the
products delivered. For Example, Primark company is adopted fair practices such as it is
making product which are of good quality and selling them at reasonable price
Fair trade practice: Primark need to avoid unfair trade practices for increasing a price. It
needs to make sure that consumer not get cheated by its unfair trade practices. Further, they also
need to avoid activities such as discrimination among workers. For example, company adopted
legal practices such as Primark make sure that employee work at safe place without any risk.
Equal opportunities and discrimination legislation; Primark need to make sure that
equal opportunity is provided to all candidate who came for a job purpose (Auerbach and
Gorodnichenko, 2013). It should not carry out any form of discrimination at the time of
recruitment and select a candidate who is highly skilled. For example company providing equal
opportunities to its employee without making any type of discrimination.
TASK 2
2.1 Explain a type of economic system operated in a different country
Every county have their own economic system in which it set a economic function and
pricing of resources. Economic system can be termed as the process in which three major
decision are made and the decision are related to areas such as what to produce, how to produce
and for whom to produce,
There are three type of economic system in which way of allocating a resources is
different that are as follow
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Command economy: In this economy what should be produce and in what quantity is
decided by government. Further price of product is also set by government. In such type of
economy, resources are also allocated by government only because they are scared (Schularick
and Taylor, 2012). In Cuba there is command economy adopted in which land, capital and
technology are allocated by government.
What to produce: what is required to produces is determine by a government
How to produce: it is also determine by a government
For whom to produce: in this government decide for whom firm need to produce
Free market economy: In a free market economy all firms have freedom to produce as
much as they want. Price is also set by organizations and there is no interference of government
in the same. The company who operates it business in this market are free from any type of
interference of government. In United Kingdom free market economy is present (Auerbach and
Gorodnichenko, 2012) where firms are allowed to take decision regarding allocation of
resources. In this all firm decide by their own how much capital they need and what technology
need to adopt. Further price is also set by a organization itself
What to produce: company determining what they need to produce after identifying consumer
preferences.
How to produce: firm decide how to produce by seeking the profit which they can earn.
For whom to produce: it can be determine by identifying a purchasing power of consumer
Mixed economy: Mixed economy is that which a mixture of both market and economic
planning is. It is a combination of command economy. Further there is less interfere of
government and some action are taken by a company (Corsetti, Kuester and Müller, 2013). In a
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Illustration 2: Type of economy system
(Sources: Types of economy system. 2016.)

China mixed economy is adopted in which decision of what is required need to produce and in
what quantity is decide by a government and firm. All the capital and technology are allocated
partially by both government and company. What to produce: What is require to produce is set by a partly government and firm How to produce: It is decide partly by a government and by a company
 For whom to produce: Company and government both decide for whom to produce after
determine the purchasing power of a consumer.
2.2 The impact of fiscal and monetary policy
There are some impact of fiscal policy and monetary policy on farming and housing which is
described below
a) Farming
Impact of fiscal policy on farming:
In fiscal policy there are two factor interest rate and inflation policy. For example if
interest rate is high then farmer cannot take a loan, for the purpose of farming. This may affects
the work of farmer. In satiations where farmer needs loan for buying equipments for producing a
grain and wheat but if interest rate is high then it cannot afford it. On the other hands, if interest
is lower than it become easy for a farmer to take a loan for completing a farming activities
Impact of monetary policy on farming:
Monetary policy is a process in this supply of money is controlled by a monetary
authority. It mostly targets the inflation rate and taxation policy (Zhang and Huang, 2012).
Further it there is a high tax rate then farmer may suffer from loss because cost of equipment and
seed for a producing a grain will be increase and it become difficult for a farmer to purchase
them for carrying out its farming activities.
b.) Housings
Impact of monetary policy on Housing in UK:
In this if government charge high interest rate then price of housing will also increase and
it may decrease the demand of housing among a the consumer. It is so because it is not possible
for consumer to pay a high interest rate on loan.
Monetary policy impacts
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In monetary policy tax rate is main factor which can affect the demand and supply of housing.
For example if government started charging high tax rate then it become difficult for consumer
to buy a house while if tax rate is low then demand of housing will be increase
2.3 Identify five competition policy and other regulatory mechanism
Competition plays very important role in any market as it directly affects growth and
success of businesses. In UK competition policies are used to encourage and improve the
competitiveness process.
There are two main types of behaviour which is investigated in competition policy and the
behaviour are mentioned below as:
Collusive behaviour: This enables a company to make a high profit and in this Primark
enter into a market with a fix price or output.
Abuse of market power: If any company have more than a 40% share then that firm is
considered as a market power. Primark have more than 40% share so it is considered as a highest
market power.
There are five competition policy which are described below
Office fair trading: It is an self depended body which decide the role for making sure
that competition and different activities in a business firm can be protected (Lee and Saez,
2012). There are some objective of trading policy which is to ensure that fair trading take place
between a firm and consumers. Further, it also makes sure that fair competition and business
operation take place.
Competition act 1998: In this act there are some activities which are prohibited by firm
that are abusing of organization dominant position on a local and national level (Kitzmueller and
Shimshack, 2012.). Further, according to this Act Primark needs to deliver products and services
on fair price to its customer. The organisation has no right to expand its market and compete with
other different sector.
Enterprise act 2002: It is an act in which merger are less affected by political factor
because they are independent. In this act if competitor breaks any rule then they are not allowed
to compete in the market. There is some impact of Primark that consumer group can compliant
for a non competitive practices.
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The completion and market authority: The UK key competition regulator is to
investigate merger which restrict the competition and investigation is started in which there may
be some competitive problem.
The department of business innovation and skill: Its main objective is to increase
product and skill so that nee innovative product can be launched (Cai and Yang, 2014). Further it
also help in promoting a free and fair market for a Primark and other firms.
TASK 3
3.1 Explain how Pricing and output decision of business is determined
There are various types of market structure which pricing and output decisions
determined in different ways that are as follow
a.) Perfect competition: Perfect competition describes a market structure in which competition
is at its highest possible level. In this market structure there are large number of buyer and
sellers. Every firm produced homogeneous products and there is zero cost advertising (Carvalho,
Marques and Berg, 2012). Further, Primark can set a pricing and output decision in a perfect
competition in the basis of how much to produce, how much profit need will earn and if any loss
rather than in profit incurred is confine in this market. If Primark enter in a perfect competition
than it needs to accept the market price and sell its products on the basis of the same. Further
firm’s objective is to maximise its profit in short run. It also includes its opportunity cost of
operations in total cost of production. It has some negative impact on a Primark that is it cannot
increase the price of product and cannot split its business operation in a new geographical area.
Perfect elastic demand curve: In a perfect competition firm is willing to sell product in
large quality at market price and consumer are ready to buy. In addition to this, firm receives the
same marginal revenue which a firm can gain in a perfectly competitive market.
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 b.) Monopoly: In monopoly market there is one firm and large number of buyers. Firm
produce unique product and have no close substitutes. Further, there is no price
competition in monopoly market. If Primark operates it business in a monopoly market
then it can set any price for maximizing its profit. Therefore, profit maximising price is
limited by a demand curve for the product. In a monopoly market if there is change in a
business environment eventually break down a firm monopolistic power (Zhang and
Huang, 2012). In monopoly market, if company increase its price for earning a profit than
demand is not affected as there is only single seller and people in the market has no
option available. While on the other hand, if demand is height then company can set a
favourable price because customer have no other choice instead of buying that product at
high price.
 c.) Oligopoly: Oligopoly is market structure in which market industry is dominated by a
small number of sellers. There are few firms which operate together and cover all over a
markets. There are few example of oligopoly market that is Major airline such as British
airways and Air France operates its routes with few competitors. Price can affect the
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Illustration 3: Perfectly elastic demand curve in a perfect competition

demand of products because there are many other firms who sell same type of products
(Asghar, 2013). Seller need to charge a price but also need to provide discount and offers
for increasing a sale.
 d.) Duopoly; Duopoly is a limiting case of Oligopoly, it is so all the characteristic of a
oligopoly excluded the number of seller. Further in a duopoly market the decision made
by seller is nit independent. There are few examples of duopoly market that is Airbus and
Amazon which deals online and air services. This both firm are interdependent because
of this there is no fluctuation of price affects demand and supply.
3.2 How market force (Demand and supply) shape organisational responses
There are wide ranges of ways in which demand and supply shape organizational
responses that are as follow
Market force; There are some activities of business which get affects the demand and
supply of the products and services of Primark (Netzer, Feldmanand and Fresko, 2012). Demand
is that when a buyer is willing to buy products with an objective to satisfy need and demand.
Supply and demand: The supply and demand curve shows the interaction between a
supply of goods and services and demand for those products. The availability of the particular
product and the desires or demand for that product is because of price. When demand of any
product increases, it is necessary for Primark to increase the supply so that consumer need can
satisfied on time.
Elasticity of demand: Elasticity of demand is quality of buyer who wants to buy the
products of Primark Company. Price elasticity of demand show that the quality of demanded of
goods and services changes with any kind of changes in their prices (Netzer, Feldman and
Fresko, 2012). For example sale of Primark increment when price is decrease. If price is high the
demand of product will be decrease.
Elasticity of supply; Elasticity of supply show the responsiveness or elasticity of
quantity supplied of a good and services with a change in price. Moreover, Price elasticity show
the responsiveness of the quantity supplied with a changes in price. It is important for a firm to
show to know how fast and effectively it can respond the changing marketing condition. Further
perfect elastic occur when supply is infinite at any one price but it may be perfectly inelastic
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