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493 Downloads1 I Published: 29 Oct ,2019
Business environment consists of internal and external factors which influence the business objectives and operations. There are some factors which affects the business activities such as improvement in technology, government laws and activities, social and economic trend etc. In the report, Primark is considered that is the multinational subsidiary company of Associate British Group and it offers a wide range of products and services to their customers to satisfy their needs. This organisation offers diverse range of products which include women's wear, children clothing, home ware, accessories, beauty products. Furthermore, it has also discusses demands of products which directly effects the supply of the products (Aula, 2010). The products of this organisation are mainly sourced from suppliers in Europe and Asia. The market structure of the company is depends on products that what products they are providing to the customers.
Primark is very popular organisation and providing the famous fashionable products at a cheap rate . The cited organisation sells product at the reasonable rate to attract customers and to beat the competitors in the market. The purpose of this organisation is to sell the quality products which help the firm to maximize their sales and profits during the year. Another purpose is to create loyalty between the customers to retain them for a long period of time. This is the private organization that makes their own rules and regulations to hit the targets on time.
Public Sector – There are many public companies and one of the competitors of this firm is Tesco public company who deals in the business of home ware products, grocery products, electronic equipments etc. The main purpose of this organisation is to maximize sales and profits and provide a number of products to general public and to beat the market of retailer industries (Berger, Klapper and Turk-Ariss, 2009).
Charity – It is that organisation which provides education, cloth and shelter to the needy ones. There are so many organisations in UK and one of them is Save the Children. As it is an international non -government organisation and they promote and support the children rights and provide relief in developing countries. The vision of this organisation is that there are so many children and every child should get the right to survival in the world, get protection from the governments and should participate in the activities of the organisation.
Cooperative – It is that business organisation which is owned and operated by a group of people or individuals for their mutual benefits and sharing of profits. One of the cooperative organisations is Royal London Mutual
Insurance Society Limited: the aim of this company is to render different services to customers and should be aware about this organisation (Blanchard, Tolbert and Mencken, 2011). On the other side, its objective is to become the largest UK's leading customer-owned.
Primark is one of the largest retailers in Europe with more than 290 stores are there in different countries. In this organisation, there are so many stakeholders like customers, governments, employees, suppliers and shareholders. The consideration of every stakeholder is different.
Customers – Now days, the business cannot exist without the customers. The main objective of Primark is to provide high quality of products and services to the customers to satisfy their needs and wants. The cited organisation has to treat with their customers fairly, because in modern era there are so many choices for the customer to buy products and services from other organisation.
Government –Company have to follow proper rules, regulations, policies which are made by the government. By applying that, the organization can get the competitive advantage in the market. The business entity should work with the government to maintain their growth and strong position in the market (Chavis, Klapper and Love, 2011).
Employees – The cited company provides job opportunities to more than 700000 employees in different countries. The employees are important stakeholders for the organisation. In the organisation, the work standard of staff is good and there working environment is positive and healthy which encourage them time to time. The main priority of Primark is to respect the customers.
Suppliers – The suppliers of Primark are very close with the organisation and also they work closely with all the staff of factories.. The firm provide proper training and development programme to their staff so that they can understand the rights of suppliers. For fulfilling the expectations and needs, the organisation have to take some steps so that all stakeholders remain satisfy and can be retained for a long period of time (Chow and et. al., 2011).
Primark has different types of responsibilities to fulfil the needs and satisfy the customers as well as their stakeholders in order to hit the objectives of the organisation.
Responsibility towards Stakeholders – In the organisation every, stakeholder have own rights and needs to fulfil them. In order to satisfy needs and expectations the organisation has to make fruitful relationship with them to achieve the objectives on time. The cited organisation has to provide proper resources to suppliers which help them in producing the goods effectively. . Every organisation should update and refine products to satisfy needs of the customers. While providing products to the customers the staff member should behave properly with them so that staff can easily sale the products to customers without any hesitation. The organisation is also having an social responsibilities in the society. The company should invent those products and services which does not harm society.
Legal Responsibilities – The organisation should follow proper rules and regulation which are made for the customers and employment (Cohen and Winn, 2007). For example, for employment the cited firm have to follow proper Acts which are made by the government like Employment Minimum Wages Act, National Wages Act etc. On the other side, the company should provide equal opportunity to all employees and should do not discriminate them according to their caste, religion etc.
If they will follow proper acts then the employees, staffs, customers can feel safe by using products and services. It encourages employees to work in efficient and effective manner to give possible outcomes to the organisation. If in the organisation the employee needs training then firm should provide them proper training and development programme to increase their skills and knowledge about the products and services which are offer to the customers (Ebert and et. al., 2014).
The economic system is complex in regard to the socio-economic and institutional relationship between the customers to provide different goods and services in different countries. As economic system is the order to allocation, distribution of products and services with in allocated areas or societies. The economic system is used to control the different factors which may include the labour, capital, machines and entrepreneur. As it also encourage the labour to work in a efficient manner to give best possible outcomes. Every country has their own economic system to follow in there own country (Fernando, 2011).
Cuba – The economic system of Cuba is planned economy. In Cuba most of the industries are operated by the government. The economic system of this country is quite well in following ways:
United Kingdom – This country has a free market economic system. The government has little control over the transaction between the buyers and sellers. When any organisation is offering any products and services to customers, the transaction are based on mutual agreement on prices. But sometimes the prices of products and services are influenced by the government in the form of taxes and some regulations. The decisions regarding the to the set the prices of products and services are taken by the with the help of collective decision process.
China – It is second largest economy in the world and having the socialistic market economy. It is open market economy and stated owned sector economy. This economy is introduced by China to make huge competition in international market. This country is using different techniques to invent the new products in other countries at a reasonable price to attract large of customers and to increase their economic growth. In this country, foreign companies invest their funds so that exports of this country is more and imports are less.
Fiscal policy is regulated by the government to to collect the revenues from the public and to spend these revenues in different sectors of services (Gecevska and et. al., 2010). When the government changes its level of taxation and spendings then it influences the aggregate demand and economic activities in the economy. If there is change in government spendings and level of composition of taxation then it will directly effect the saving and investment of the economy, income distribution etc. Its the responsibility for government to adjust the taxes of general public so that there levels of spendings can be improve.
Monetary policy is that process which is regulated by the central bank to control the supply of money. Monetary policy in UK generally operates through the price at which money is lent to the customers at interest rates. The goals in monetary policy are usually to contribute in the economic growth and to maintain the stability and to maintain the unpredictable exchange rates with other currencies (Halbert and Ingulli, 2011). The different impact of the policies on housing and farming are as follows:
Housing – It is that sector in which people invest more. Many of the customers take loan from the bank to purchase the property. The bank provide the loan at lower interest rate. When interest rates are higher in house loan then it will be a critical condition for the people to take the loans from the bank. On the other side, the fiscal policy have less impact on this sector because buyer gets the exemption to pay taxes at lower rate. Most of the customers are using the exemption which are provided by the government.
Farming – The implication of fiscal and monetary policy for the farming is having positive and negative effect. The farmers grow different types of foods in a piece of land for the living. A farm is that area on which farmer cultivates different grains. The UK government provide the equipments to farmers like plant and machinery, agriculture products etc. to farm the crops. But the government provide these facilities at a high rate because they gives loan to farmer at high rate. In the contrary, the farmers have to also pay a high tax rate to banks. So both monetary policy and fiscal policy have great impact in this sector (Harrison, 2011).
Competition policy is that policy to control the competition between companies. The competition can be controlled by the organisation if they are working in the monopoly market. On the other side, those companies who are merging with one or two more companies and does not damage the market structure. The policies of competition also tries to promote the competition in local market. The aim of competition policy is to ensure that Primark company use the technological innovations which can promotes the efficiency in different markets and to safeguard & promote the interest of consumer through increase the choices of customers and provide the products at low prices (Iskanius, Page and Anbuudayasankar, 2010). There are different kinds of competition policies which are used by the UK organisation and they are described as below:
Privatisation policy – Royal mail is one of the company in competition policy who transfers its ownership. It is a postal company which is now working as a industry in UK. The company is growing consistently and some of the privatisation departments is covered by this organisation.
Price based competition - Most of the companies sale the products and services at a single price to beat the competitors in the market. Sometimes Primark company sales the products and services at a low price to attract a large number of customers and maximize the profits.
Deregulation – In this policy retailer companies apply the government law to reduce the monopoly power in the market. For example, Tesco company apply the UK policies to reduce the impact of government legislation on the organisation which affects the business operations.
Anti-competitive behaviour policy - Some of the organisation of UK apply strong law and penalties against the proven cases of collusion or price mixing which is involved in the market sharing. For example, Audi company, apply strict rules in there organisation because they provide both quantity and quality work to employees (Kubasek, Brennan and Browne, 2016). Essay writing services
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Market refers to a particular place where the goods and services are sold by the organisation. The term market does not particularly refers places but also the whole area where buyers and sellers are spread in all over the world (Business-friendly environment. 2017). There are different market structure in economy which is used by the different organisation. The market structure can be determine by the nature of competition prevailing in the market. There are four types of market structure which are as follows:
1. Perfect competition market – In this market, there are so many number of buyer and seller who sale the same products and services to customers. The firms are selling homogeneous products to customers and there is no barrier on the firm to leave and exit the industry. Primark company is selling different types of products and services to customers. If this organisation follow this market structure then customers can easily shift to use other organisation products. When this firm will not able to satisfy the customers need then they will purchase the products from the other organisation because the substitutes of products are available in the market (Laumer, Eckhardt and Weitzel, 2010). In this market every organisation aim is to maximize the profits by increasing their sales. The price and output decision is determine where demand and supply curve intersect each other.
2. Monopoly market – In this market there is only one seller and large number of buyers. But the organisation faces the problem of barrier to entry or exits from this market. The products have also no close substitutes. If Primark company will work in this market structure they can earn a large amount of revenue. Because in this market structure, the organisation mains focus on the brand of products which they are selling to customer's. The cited company have full control over prices of products and they also set the prices of goods and services. The price and output decision can be determine when marginal cost is equal to the marginal revenue and marginal cost should cut the curve of marginal revenue from its below.
3. Oligopoly market - In oligopoly market there are few number of sellers are selling the homogeneous and differentiated products to customers (Loorbach and et. al., 2010). In this market, there is no barriers to entry or exits from it. There are so many competitors like Tesco, Sainsbury of Primark company. The price and output decision in this market is related with products which are taken by the organisation itself those who are dominating in the market.
4. Duopoly market – On this market there are only two sellers and both sellers are completely independent. The agreement also does not exists between them. If Primark company used this market structure then they will not able know that what products are sold by the other company and what strategy are using to attract large number of customers (Moutinho, 2011).
The objectives of the organisation are affected by the market forces. Primark company has great impact on the firm reputations and profits by following the different market structure. If the cited organisation have to understand the proper market structure that which structure is suited then the company have to do proper market research. Market forces also put pressure on the organisation to offer those products and services which satisfy the consumer needs. It can be explained from the below diagram.
From the above diagram it is explained that when the demand and supply curve intersect each other it shows that it is a equilibrium point and the organisation is supplying those products which can satisfy the customers needs. On the other side, if the supply of product is increasing then company have to reduce their prices to increase the revenue and assuming that demand is constant. The market forces of demand and supply affects the organisation targets ration that what the demand has been done by the customers and what the organisation is producing the products (Popescu, 2013). It is important for the organisation to monitor the market forces constantly to ensure that business enterprises can respond rapidly if there is any change in the market conditions. Most of the organisation conduct the research and development programme to analyse the customer needs and wants.
Business environment has grate impact on organizational behaviour. The business environment is divided into two parts i.e. internal and external environment (Demand and supply. 2017). For external environment Primark company can use political, social, technological, legal and environment factors which help the organisation to determine the culture factors. The description are as below:
Political factor – In this factor when governments are unstable in one country they made the decisions for their own benefits. The management of the organisation is influenced by this factor. This factors are the threat for international trade mechanism, tariff between UK and other countries etc. Those rules and regulations which are made by the government is also impact the demand and supply in the economy (Porter and Rivkin, 2012).
Social factor – The social factor include the values, traditions, beliefs etc. of customers and employees. Primark company is trying to understood the needs and wants of customers to provide the best quality of products and services which is suited for customers. So that it can improve the lifestyle of people.
Economic factor – There are some economic factors which affect the business objectives as if there is change in the inflation rate, wages rate or interest rate. If there is any change in the income of customers then it will directly impact on the demand and supply of the products.
Legal factor – The laws and regulations which are made by the government has influence on the business organisation. Primark company have to considered those rules and regulations which are made by the government.
Technological factor – The cited organisation have to adopt new technologies to improve the quality of services. The factors which affect the operations of business are level of global technology infrastructure, regular change in the innovation of communication technologies etc. It will become easy for he company to provide the goods and services to customers easily.
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In the modern era, the competition among businesses in the supermarket industry of UK has become highly intense (Pulver, 2012). This has resulted in creating several kinds of obstacles in overall growth and success of companies such as Primark. Furthermore, the brand needs to seek for adopting strategies such as international trade in order to carry out smooth flow of operations in the long run. It can be asserted that there is wide range of benefits associated with carrying out international trade.
For example trade practices at international level can results in enhancing the rate of growth and development of the selected business enterprise. International trade is significant because it will help Primark to find out new customers base and enhance its overall market share in the international market (Siewiorek and et. al., 2012). However, it can be critically argued that at the time of carrying out international practices, the selected business will need to take care of international laws and regulations. International trade related practices can help the company to gain competitive advantage over key players in the market. Thus, it can be stated that Primark can start carrying out its business practices in international market and become more effective in long run. The brand still has an potential opportunity to expand its business practices in other international markets of the world (Wild, Wild and Han, 2014).
It can be stated that there are wide range of global factors which needs to be taken into considerations by businesses such as Primark in order to carry out smooth flow of all operations and activities. For example changes in economic situations at international level can affect volume of sales and profits of the selected business enterprise to a great extent. A situation of economic downturn can results in lowering down sales of Primark as people's purchasing power tends to decrease in such kind of situations.
On the other side of this, it can be also expressed that factors such as technology can also impact business practices of Primark to a great extent. In the modern era, the brand is required to adopt modern and upgraded technology at regular intervals in order to carry out smooth flow of all operations and activities (Solomon, 2014). The negative impact of technological factors is that it can increases the overall cost of operations for the businesses. At the same time, the use of advanced technology can positively affect the business by making its overall operations more effective and competent. Till now the concept of globalization has affected the selected retailer in positive manner. It can be asserted that because of factors such as globalization, the brand is able to find out more potential opportunities in context of growth and development. Apart from this, it has also supported in finding out new customers, carrying out innovations and areas such as new product development (Sørensen, 2012).
The organisation of UK is mostly influenced by the European Union policies. After joining the European Union, the business of UK have to maintain their all rules and regulations according to them. In this policy, all the companies of UK can exchange their products with other countries of EU without any barriers. But there are some policies which impact the UK business organisation which are as follows:
International policies – The government of EU make the restriction on organisation to increase their exports and decrease the imports. So in this way it help the organisation to promote their products and services in different countries and to lead in the competitive market (Welford, 2013).
Taxation Policy – The organisation become valuable when they make contribution in in paying the taxes. Government also help those companies who are paying the high taxes, to raise the profits from those communities.
Employment policy – In this policy, the government encourage the companies to increase their business efficiency so that they can increase the employment opportunities. It the business efficiency is increased then it will easy for the company to attain its objectives on time (What is Business Environment? Explain its types. 2016).
After summing up the report it can be conclude that it is very important for every organisation to understand business environment. For proper understanding of the business environment the organisation is monitoring on the social, political, environment, legal and technology factors. Moreover, the assignment also explained that which market structure is best for Primark to satisfy the consumer needs and wants and to maximize the profits. The demand and supply of the products and services also effects the objectives of the business. The competition price policy also analyse weather the organisation is able to sale the products at reasonable price or not. The company can conduct the SWOT analyse to determine its strength, weaknesses, opportunities and threats and to gain the competitive advantages in the market.
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