Business Environment Analysis: Primark Company Report - HND Business

This report presents a detailed analysis of Primark's business environment, encompassing various aspects such as organizational structure, macro factors, and SWOT analysis. The report begins with an introduction to the business environment, highlighting the significance of internal and external factors that influence an organization's operations. It then delves into different types of organizations, their purposes, and legal structures, followed by an examination of the interrelationship between organizational functions, using Primark as a case study. The report further explores the positive and negative impacts of macro factors (political, social, economic, technological, legal, and environmental) on business operations. An internal and external analysis of Primark is conducted, focusing on its strengths, weaknesses, opportunities, and threats. The report concludes with a summary of key findings and insights into Primark's strategic position within its business environment.

Business and Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types of organisation, their purposes and legal structures......................................1
Covered in PPT............................................................................................................................1
P2 Size and scope of different organisation................................................................................1
Covered in PPT............................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between different organisation functions..........................................................1
TASK 3............................................................................................................................................4
P4 Positive and negative impact of macro factor on business operation.....................................4
TASK 4............................................................................................................................................6
P5 Internal and external analysis of Primark company...............................................................6
P6 Strength and weaknesses interrelating with external factors..................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment involves some internal as well as external factors which can affect
organisation and their operating system. So, it is huge responsibility of managers to keep in mind
all environmental forces while setting organisational strategies and policies. In simple words,
business environment includes those people, entities and factors which may be controllable or
uncontrollable by managers. Business owners can control micro environmental factors but they
cannot control or handle macro forces (Afifah and Tielung, 2015). This is mandatory for all
organizations to follow these factors otherwise it cannot survive in competitive market place. So,
it can be said that profitability, survival and growth of company totally depends upon its
environment in which it operates it operations.
This project report is based on, PRIMARK which is a subsidiary of AB Foods, it is
specialised in clothing and accessory items. It is located in Dublin and having many stores in all
over the world. In this report different types of organization have been evaluated along with their
purposes and legal structures. Also, interrelation between organisational functions and structures
has been demonstrated. Various positive and negative impacts of macro factors on business has
been determined. At last, interrelationship betwixt internal strengths/weaknesses and macro
environmental factors has been evaluated.
TASK 1
P1 Different types of organisation, their purposes and legal structures
Covered in PPT
P2 Size and scope of different organisation
Covered in PPT
TASK 2
P3 Relationship between different organisation functions
There are different types of organisational structure which support to entity in attaining
their goals and objectives. All functions of Primark company are interrelated with each other’s
and it is responsibility of organisation to assists them in appropriate manner. For example,
marketing department is connected with finance. This is because at the time of implementing
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new market strategies, then funds are required by marketing requirement (Amit and Zott, 2014).
Thus, finance sector is essential for marketing. On other side, function of finance is also helpful
in providing funds to HR department so that recruitment or selection of employee’s can be done
properly. Along with this incentives and salaries will also provide according to their capabilities.
Further, sales and marketing department is also interlinked with each other. For example, sales
departments will offer products and services to customers which has been identified by the
marketing manager. Moreover, prices will also set according to the income of customers so that
it become affordable for them to use that products and services. However, there are different
departments in Primark such as HR, marketing, sales, finance etc. and all are having their own
roles and responsibilities which has to be achieved by them. Division of products and services is
done according to the geographical basis where organisation can easily target new audience and
satisfy their needs. As marketing departments is having responsibility to target their objectives
and identify the needs of customers with in time period. From above it can be state that different
departments in Primark are having dissimilar function (Časas and Dambrauskaitė, 2011). So all
having own roles and responsibilities in order to attain the goals of company and to improve their
existing position more strong in competitive market.
Further, an objective of Primark is only achieved when different departments are working
in coordination. It is responsibility of HR manager to encourage employees by providing them
rewards or increase employment engagement so that they will perform their task in more
effective manner. Main objective of this firm is to become leader to retail sector while offering
wider range of goods and services to their customers (Eva and et. al., 2014). But these objectives
can be achieved when proper marketing strategies and pricing policies are set in appropriate
manner. These should be set in such a manner so that it become easy for organisation to attract
customers towards it. As Primark wants to earn large amount of profits so they should also focus
on their sales also.
Organisational structure specifies the nature of business which has been establish by
person. Whether it is large or small companies they can gain higher profit or sales by matching
needs of customers and with the structure they are following. Different organisation structure is;
functional, divisional and matrix (Evans, 2013). Primark is following divisional structure
because through this they can operate their business easily from different geographic area. As
this firm is having different outlets in several countries so it become essential for them to work
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upon this structure. While following this structure, organisation is having additional benefit
because through this they can attain growth and profitability during the year. However, in this
employees are also divided according to their capabilities and skills so that it become easy for
them to execute their task in effective manner.
Figure 1: Retail enterprise organisation chart
(Source: Retail Organizational Chart, 2017)
In Primark company there are different departments and all have to perform their roles
and responsibilities accordingly (Retail Organizational Chart, 2017). So work is also divided
accordingly where it brings smoothness in work which are doing by employees. Further, all
departments are also working in coordination in order to hit the targets of company. If they are
not working in harmonisation process, then it can also become difficult for them to cope up
enterprise objectives.
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TASK 3
P4 Positive and negative impact of macro factor on business operation
Every enterprise is surrounded by an environment in which it operates its organisational
activities and practices. Macro environment or factor is the part of economy which is also
influencing company decision and on their performances also. Primark is most popular brand
which deals in clothing sector (Fajar, Budiardjo and Hasibuan, 2012). When managers of this
company is taking any decision, then they have to also analyse these factors because they are
impacting upon on their decision on regular basis. Macro factors consists with; political, social,
economic, technological, environmental and legal. However, these factors are also affected on
organisation objectives in both positive and negative manner. While analysing these factors, it
will help to managers in developing and understanding the changes which are affecting to
management. These factors are explained below along with their positive and negative impact on
Primark objectives.
Political factor – The government of country is making rules and regulations according
to the needs and requirements of companies (Business environment, 2014). But, company needs
to comply with these rules and regulations in order to protect their rights from revivals. The
objective of company is affected by the decision which is taken by government.
Positive impact
 Get some additional benefit from
government in terms of taxation or any
policies.
 Easy to deal with customer issues
regarding goods and services and
provide them legal solution to them.
Negative impact
 It affects to decision making process of
organisation and to operate in
competitive market.
 To comply with these rules and
regulations which are changing from
time-to-time.
Social factor – It is related with want of consumer ease. The buying behaviour of
customers are influencing by consumer needs and wants. There are many customers who are
purchasing goods according to their requirements (Fernie, Fernie and Moore, 2015). It is
responsibility of higher authority to set the price of goods and services according to the income
of people. Along with this, it become essential for organisation to identify needs of society where
they can easily earn large amount of profit.
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Positive impact
 They can attract those customers who
are belongs from high class family.
Through this it will easy for them to
understand their buying behaviour in
dynamic environment.
Negative impact
 Difficult to satisfy the needs of needs of
all customers at same point of time.
 Price of stuff cannot be maintained or
set according to all class of people.
Economic factor – The level of economic growth and availability of poor mortgage is
impacting on the Primark goals and objectives. There are many people whose aspire is to
purchase their own house and this can usually achieve by doing small deposits. The service of
cloths and accessories is to set according to needs of customers because there are many factors
which influence their decision.
Positive impact
 It will success as consumer look in
regard to cheaper clothing alternative.
However, if there is change in
economic condition customers will
remain loyal towards firm.
Negative impact
 There will be increment in labour cost
which is likely to raise in shareholder
welfare and work according to ethical
condition of regulations.
Technological factor – Nowadays, there is rapidly increase in technologies which has to
be also adopted by organisation (Florea, 2011). Manager of Primark company has to also provide
online services to their customers through which they can save their time as well as cost. Along
with this, using new technologies will also improve the performance of employees by providing
them training.
Positive impact
 It saves their time and cost to provide
online services to customers.
 Can keep all confidential information at
one system only along with personal id
and password.
Negative impact
 Sometime difficult to adopt new
technologies non-availability of funds.
 It became barrier for organisation to
conduct training for all employees
according to their capability and skills.
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Legal factor – Primark has to strictly comply with all rules and regulations which are
framed regarding trade, consumer or privacy. There are many outlets of this company in different
places, so they have to comply with all regulations which are made by other governments in
order to operate their business in effective manner.
Positive impact
 Whatever services which are providing
by organisation to customers, then they
are confident about that these are
protecting their rights from any
prohibited activities.
Negative impact
 The restrictions which are made by
government become barrier for Primark
to fulfil their existing goals and
objectives.
Environmental factor – With the use of new technologies there is also increment in
utilisation of resources. So in this regard, it is responsibility of manager to reduce these risk with
the optimum utilisation of resources (Klapper, Love and Randall, 2015). Positive impact of this
factor is that company can maintain their emission cap which is set by higher legislation
authorities.
TASK 4
P5 Internal and external analysis of Primark company
In modern era, it is important for organisation to analyse SWOT through which they can
make more effective decision to cope up with pre-determined goals and objectives. While
analysing this, it will be beneficial for Primark company to know about strength and weaknesses.
As there are many competitors of this company who is also providing same kind of services. The
manager of Primark has to considered this internal factor because sometimes these issues are
affecting to business decision making process (Misra and Puri, 2011). Apart from this with the
help of strength and opportunities company can make their existing position more strong in
market. Strength and weaknesses deals with internal factors and; threats and opportunities are
dealing with external factors.
Strength - This company had achieved the incredible victory in last couple of years and
this has been done due to value proposition of low price of goods and services. Further, this
company had overtaken Arcadia group in order to lead in clothing and footwear retailer sector in
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UK. Apart from this, this firm is operating their business from different countries so that they can
easily target new customers. With the help of this, company can also accomplish an ease of
availability from their customers. Besides this, management is also focusing on their morale in
order to boost their employees and make strong connection with them.
Weaknesses - Main weaknesses of this company is unethical of consumer perception
which is reflecting upon on their sales and profit (Mura and Buleca, 2014). Another is, this
company is too much relying upon UK market because more than half of company turnover is
generated through it. Further, they are outsourcing apparels so it can also become inconsistency
in quality of cloths.
Opportunities – This company must focus in Europe market in opening more outlets in
some of the cities like Vienna, Madrid etc. Through this it become opportunity for them to lead
in competitive market. Adopt different strategies of advertisement in order to attract more
customers and beat their revivals. Further provide high quality of cloths to those people who are
very conscious about fashion.
Threats – Main competitor of this firm is Zara and H&M who is dealing in same kind of
products and services. Besides this, if there is suddenly change in economic condition of country,
then it directly impact on the financial position of company. Further, mentioned company needs
to considered some external forces to describe their marketing strategy and is facing high
competition in market which is offering cheap products also (Onetti and et. al., 2012).
P6 Strength and weaknesses interrelating with external factors
In modern era, it is essential for organisation to analyse both these factors i.e. internal
(SWOT) and external (PESTLE). To retain in market or to become leader in this sector, Primark
has to adopt new and attractive marketing strategies in order to hit their objectives also. As it also
gives an opportunity to organisation to resolve their existing issues also which are facing
employees as well as customer in appropriate manner. Well the strength of this firm is that
company had attained marvellous success and this due to low price of goods and services. As
this comes under social factor because through this they are satisfying the yearnings.
To interlink SWOT and PESTLE with each other enterprise can find out strategic option
to deal with their issues. Whatever strength of company is there should take advantage so that
they can avoid threats which are facing by them (Ovchinnikova and et. al., 2015). But it also
supports to organisation in strictly following rules and regulations which are implemented by
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government. Indirectly it will help to Primark to open more outlets in other country by strictly
complying with these acts and norms. Through this firm can also get additional benefit from that.
Another is, financial position of Primark is strong so it comes under economic factor. For
example, if there is little change in economic condition or any inflation or deflation rate, then it
impact upon the company position because company is fully dependent upon the economy.
Micro environment consists with such factors which can influence demand and supply of
customers. On other side macro factors include aggregate demand and supply, national income
etc. The management of Primark need to analyse their weakness and threats on regular basis so
that these can be convert into opportunities and strength. Manager has to take decision on the
basis of these which will be helpful in increasing customer base, boosting employee’s morale. As
this company is trying to achieving competitive advantage by their competitors (Romero, 2012).
So for this company has to use new and latest technologies which encourage to customers and
business in online shopping. Along with this, enterprise should also comply with code of ethics
and responsibilities in order to build good reputation in front of their customers.
Further, manager should look upon resources which are using by organisation in order to
produce goods and services. In simple words, they should protect environment and do not carry
out those business which is affecting to their business in bad manner. Company should have
enough capacity to match with current demand of customers with their needs and ease with
policies which make easy understand for their employees. Through this it will be helpful for
organisation to retain them for a long period of time (Samad, 2013). While board of directors of
Primark and other authorities should look upon their plans and strategies in order to minimise
threats and weaknesses and build more strong position in market. In last, employees should also
involve in decision making process because through this decision can be taken in more effective
ways.
CONCLUSION
From above report it can be concluded from above that it become significant for
organisation to conduct SWOT and PESTLE analysis through which they can operate their
business function in effective manner. Further, it will also help them in adopting different tools
and techniques which assists them in improving their existing position in competitive market.
Besides this, to operate business in competitive market, firstly it is important for them to identify
their scope so according to that they can carry their business. Apart from this divisional structure
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is useful for Primark company because there are different stores which are available in other
countries will easy for them to operate in effective manner. In last, mentioned company should
adopt those marketing strategies where they can increase the brand awareness about their
products and services.
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