Business environment is considered as an effective and efficient part for the organization. It determines with the internal as well as external situation of the market which highly affects the functioning of the business. Thus, in the present time with the development of countries, it has become important for the organization to develop with an efficient market analysis so as to evaluate the actual position of the industry (McGovern, 2014).
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It is been seen that factors involved in the business environment are having high impact on the performance of the company. Further, in this report Primark PLC company is been taken for developing the analysis. It is a retail outlet which serves with many things to the customers. Moreover, in this goals and targets of the firm are been determined in a detailed manner. Further, the different policies such as monetary and fiscal for many countries are been stated efficiently. In this the structure of the company is studied for setting up with the prices and output decisions for it. At the end, it includes the EU and BREXIT problem is been stated as it is of the major issue faced in UK.
1.1 Different types of organizations availing in the market
There are large number of firms which are established to serve the products and services to the customers (Fernando, 2011). Further, they are been segregated in different sectors which are having there own aims and objectives for there companies. The following sectors are been stated in an efficient manner:
- Public sector company: In this the organizations are been established and managed by the legal authority. Further, they are the only ones which are serving with the rights to take the major decisions regarding the operations and functions of the company. Further, there main objective is to serve the people with higher satisfaction by providing them best quality products at adequate prices (Jennings, 2010). Like NHS is a public sector company which is been developed for serving greater services to the public. Key purpose of the company is to provide better services to the customers as well as helps to them in their welfare.
- Charity sector company: In this, the companies are mainly working under non-profit basis which means that there main motive is to ensure the welfare of the people and work for there betterment in the society. Like American Red cross is an organization which is been established for providing blood to the needy people. They are not taking any money from the people who take the blood rather give them best services so as to help them to greater level. There main objective is to give assistance to the people rather than earning money. American Red cross is a firm which operates in the charity sector. Further, purpose behind operating in such industry is to provide blood to the people who are needy and most requires.
- Cooperative companies: In this, there are number of people who make there mind to work together and establish a firm with a motive to earn maximum money. They need to acquire greater level in attaining the political, economical and social stability. Example of this type of company is Baywind Energy Co-operative which is UK based and operating in the energy sector. Purpose or objective of the firm is to provide wind as well as energy products to the country at the lowest rate.
Primark PLC comes under the public sector company which means that the functioning of it is in the hands of the government. They are highly responsible for making the decisions regarding the purchase and sales of the products (Gottheil, 2013). Furthermore, there main objective is to develop with customer oriented approach and serving goods as per there preferences. Primark is a public sector company and operates in the retail industry of the UK. Key products of the firm are such as clothing items, cosmetic products as well as various housewares. Objectives or purposes of the Primark Plc are to provide the better and high quality of products and items at the lowest price to the consumers.
1.2 Determining the manner in which Primark meet the objectives of stakeholders
To start up with a company, they need to acquire with large number of stakeholders which are highly involved in the proper functioning of the organization. Thus, it is very crucial to understand with the needs of them and serve them with greater satisfaction level. Moreover, they are playing major part in making the decisions for the company. Further, following are the major stakeholders which are involved in organization are:
- Employees: They are the major elements of the company as they are directly dependent on them for the completion of the work. Thus, it is very important to satisfy them to a greater level by serving them with high incentives, bonuses, adequate salary, healthy working conditions etc. This will help to meet with there personal as well as professional needs and enhance the performance level of the company (Haigh and Brubaker, 2010).
- Customers: In the present time, the industry is using customer centric approach as customers are playing an important role in the sustainability of the company. Thus, it is highly important for the firm to develop with the goods and services after evaluating with the needs and requirements of the customers. This will help to acquire large number of people towards there organization.
- Suppliers: For developing with the final goods, the company requires raw materials from different sources so it is important to maintain healthy relations with them. This will assist them in getting adequate amount of goods at proper time so as to develop the products.
- Government: It is been seen that every organization whether it is service or product providers, all are highly affected by the policies and regulations developed by the legal authority. Thus, it is important for the company to perform there activities following all the norms stated by the organization (Halbert and Ingulli, 2014).
1.3 Responsibilities of Primark PLC and there strategies
The company needs to develop with there activities by proper planning. This will involve with fulfilling the needs and responsibilities of all the stakeholders in an efficient manner. Thus, this develops with the need to formulate with the policies and strategies ensuring that the demands of all the people are achieved. Further, following are the major responsibilities for Primark:
- Stakeholders interest: It is highly important for the firm that before setting up the objectives for them, they should evaluate with the interest of all the stakeholders so as to ensure there high performance. It is also seen that by serving the benefits to them will directly enhance with the efficiency of the company (Hurn, 2011).
- Ethical consideration: The company is liable to make sure that they are highly rich with there ethical and moral values at the workplace. This will help to maintain harmony among the employees and develops with the efficiency of company. They must provide with equal opportunities to the employees and treat them equally.
- Health and safety at workplace: It is necessary for the company to take several measures for ensuring the safety at the workplace so as to make people free from every type of risk. Furthermore, they must also provide with other facilities such as clean toilets, healthy drinking water, ventilation, proper lighting etc. so that employees feel highly satisfied.
- Environmental concerns: The company must develop with the policies which will ensure the betterment of the environment to a greater extent. This will include that they must use the products which do not cause any harm to the nature. Further, they must go for eco-friendly goods so that people get satisfied with it.
- Business responsibility: They must serve with highly quality products at adequate price as it will help them to meet with there business responsibility. Furthermore, they must take several measures to acquire with market share in the industry (Iqbal and Strong, 2010).
Every business organisation whether it operates in the public or another sector needs to meet with the expectations and objectives of the potential stakeholders who are key assets for the firm. Responsibilities of the Primark for customers is to provide better quality of product at the affordable prices and increase their satisfaction level. Further. Employee wants that firm provide god salary and better allowances.
Towards the shareholders or investors responsibilities of the Primark is to give better and higher return on the investment.
Moreover, in order to meet with the objective of the stakeholders the Primark needs to make different strategies which helps to increase profit of the firm. The management used to increase global presence across the world which lead to attract more number of customers are sales and profit as well. Higher the profitability ratios lead to provide good salary and better return to the employees and shareholders respectively. Apart from this it has to use different approaches such as TQM, kaizen, lean production etc. which helps to increase quality of the products and reduce cost of production as well. Hence, these all the strategies used by Primark in order to meet and achieve goals and objectives of the stakeholders.
2.1 Economic system of different countries
For every country there is different economic system which determines the regulations and legislations for the businesses. They are developing with the trading policies by evaluating the availing conditions of the country. Thus, it will determine the rules for distributing the goods and services to the different places.
In China, they are following transitional economy in the country. This means that the people living there are free to make there decisions as per there need. Further, by analysing it is been seen that China is one of the largest economy in the world. According to the transitional type of economy it changes from the planned economy. As per this the company and community is restricted in order to take business decisions. Due to increasing population with higher rate the respective kind of economy adopted by the China. (Jones and Vagliasindi, 2013).
In United kingdom, it uses mixed economy in order to increase level of the companies as well as enhance growth rate of the country. It is the combination or mixture of types of economies such as capitalist and socialist. In the UK there are some decisions are made by the company itself and in some type of decisions the government takes place. Very main reason behind using such type of economy is that the UK is developed country which require internal and external both decisions.
In Cuba, they are adopting with planned economy under which the government is ruling on the industries and labour forces. In it, around 80% of Cuba's works under government owned industries and 20% in private companies. Legal authority is having the authority for providing with different facilities such as free education, programs for entertainment and food. Furthermore, it is focusing to serve with higher foreign investment in country.
2.2 Impact of fiscal and monetary policy
In every country they follow with different set of fiscal as well as monetary policy. Furthermore, fiscal policy means that the use of money done by the legal authority and invest them to have a positive influence on the economy of the country (Joseph and et.al. 2013). Thus, this situation occurs because they need to control several factors such as unemployment rates, taxation and many others which need to managed at the proper time to ensure the betterment of the country. Further, it may have negative effect on the economy if they are not controlled properly at a proper time.
Moreover, by developing proper analysis it is been found that with the investment made by the government will have increase the employment opportunities and reduce the taxation rate by a greater amount. Furthermore, they take the decision for making the investment in different sectors such as in hospitality, education, health etc. Further, this policy is having a great effect on the farming and housing sector. Thus, they get positive and negative impact according to the availing situations of the market. Further, to control with the situation, government make high investment to stabilize the growth rate of the country (Lihitkar, 2013).
In contrast to this, monetary policy is an effective process which is been determined by the central bank that are liable for the control of supply chain and the rotation of the money across the market. In context to this, they are mainly targeting the inflation rates and currency determination in the country. Further, with this policy, it may not be said that the farming and housing sectors are affected by it. Moreover, from the data collected it can be analysed that with the stabilization of the prices, it will have a negative impact on the availing economy in the country. In case of housing, when the interest rates are been increased than the prices of the real house prices.
2.3 Identifying with the competition policy and regulatory mechanisms in UK
With the era of globalisation, there are large number of companies emerging in the industry for serving the goods to the customers. Further, due to this reason it enhances with the competition level among the companies. Thus, it is important for the firms to develop with unique products and marketing policies so as to attract with large number of customers towards there organization.
Moreover, the government has developed with the competition policy to curb with the abuse of monopoly and protect with the rights and policies of private as well as public sector. This policy will ensure that the rights of consumes are also taken care of properly (Alcidi and Gros, 2011). Thus, the following are the major policies in context to competition level determined by UK.
Competition Act 1998: It is determined to as one of the important reform that has made to acquiree the improvement in the trading conditions availing in UK with other countries. This act has highly helped to stabilise with trading between UK and Europe with the protection of traders from monopoly abuse.
Competition Appeal Tribunal: It comes under the section of Enterprise Act 2002 and was developed to listen the appeals and actions which were taken against the law in different sectors.
Office of Fair Trading: It is considered as an independent body which was developed to protect the people as well as competition law and has now become the economic regulator of UK.
Competition Commission: This was a body set up for investigating markets, mergers and is a non departmental organisation.
Enterprise Act 2002: This Act was an improvement and change made to the competition act. This Act led the Office of Fair Trading a body independent from the government (Dickinson, 2013).
3.1 Determining how the pricing and output decisions in different market structures
In the economy, there are several markets which are availing to serve with the goods and services to the customers. Thus, under each market they are having there own set of values and pricing strategies for there companies. Some of them are been explained in detail below:
Perfect competition is a market structure in which there are many buyer and sellers for the same good. It may only differ in there brand names or quality. Further, under this individual companies are having limited control over the pricing and in the market as every company is sustaining and leading in there own manner (Evans, Stonehouse and Campbell, 2012). Thus they have make a joint decision for setting up the prices for there goods. In this customers are having large number of choices to choose with there product so it is important for company to come up with effective marketing strategy to attract the customers. Primark PLC is included under this as there are large number of other retail outlets which are selling with same products.
Monopoly refers to the market structure in which there is single seller who is serving many people with there goods and services. It is availing with high control over the market as they are the single firm which are producing with a particular product. Thus, they may set up with the prices as per there needs and also seeing the demand for it. But it is very sensitive in nature as with the increase in the prices will highly have a negative impact on the sales volume of the company (Gibbon and Sliwa, 2012).
Duopoly is considered to be next market similar to the oligopoly. In this there are mainly two major firms which are having high influence in the market. In this, they are free to make the decisions as only two of them are there which are serving with similar products an there are large number of customers for the same. The appropriate example under this is Amazon and Apple which developed with concept of e-book.
Oligopoly is the market structure in which there are some sellers which are serving with the things which have some similarities within them. The decision for price is taken by applying various strategies. The example of computer operating system shows oligopoly feature of market where windows and apple use to dominate (Gottheil, 2013).
3.2 Determine how demand and supply shapes the organization
From the analysis made on the industry, it is been found that the market forces have a great importance in shaping with the demand and supply with serving with the goods and services to the people. In the long run, the reaction given by the companies have a higher impact on the brand image and the profit margin of companies. For evaluating with the appropriate amount of demand and supply, the organization mainly develops with the efficient research which help them to evaluate with the needs and requirements of the customers.
In case of Primark, they are efficient enough in stating with the adequate amount of demand in the future market and this help them to produce with the products accordingly. They are effective in distributing with the goods at proper time to appropriate people (Haigh and Brubaker, 2010). Further, it is serving as a good sign in the increase of the profit margin of the company to a greater extent.
For example, in some stores of Primark, they are facing losses because of inappropriate calculation made about the customer’s demand. As a result of this, they are either leaving the customers with empty handed or leave their business overstocked as no one is interested in buying the stuff supplied by them. Thus it also affects the brand image of the company. Further, the relationship between market forces as well as organization’s response is important in ensuring the success of the firm and to satisfy the customers.
From the above diagram or graph of demand and supply it can be analysed that if demand changes in the market then prices are as well. On the other side price gives responses on the basis of supply in the market as well. It can be visualized from above graph that if demand increases then prices of products are also increased and vice-versa. On the other side if supply reduce then prices as well. Further, between the supply and demand there is an inverse relationship and highly impact on the prices of products and services.
3.3 Determining how the business and cultural environment help in shaping the behaviour of Primark
Business and cultural environment is having a greater influence in determining with the behaviour in the company. Further, there are mainly two major factors which have a great impact on the sustainability of the business in the market. It mainly involves economic as well as non-economic factors. Moreover, in the former refers to the different policies, systems etc. which are been taken into mind for the achievement of the goal for the company.
Furthermore, the later one there are many factors such as social, technological, legal, natural and others which need to be considered while developing with the policies of the company. Primark is having large number of outlets at various places, this develops with the need of evaluating with the economic system of that particular place and than develop with the strategies according to it (Halbert and Ingulli, 2014). Further, it is also crucial for the company to consider with the non-economic factors so as to serve the customers with the best of products and services which gives higher level of satisfaction to them at a greater extent. Thus, they need to evaluate with the latest technology which can help the organization to give higher assistance to the customers.
Moreover, it also important for Primark to make sure that the legal terms which are been determined by the legal authority of the defined place must be considered for better results. This will assist the organization to complete with there activities legally. In addition to this, it becomes the duty of the organization to make sure that they are not harming the nature in an manner.
4.1 Significance of international trade to UK businesses
In the market, there is a higher importance of international trading in the industry. This is due to the reason that in the country they cannot produce with all the goods on there own so they need to import some of the goods from other countries. Thus, it started up with the concept of international trading among different countries. Furthermore, there are various benefits of international trade which are been stated as under:
- Production cost: It is been evaluated that if the company is producing the products on large scale than it will have a direct impact on the cost price individually. Thus it will decrease with the per cost of the products which is been served to the customers. Primark is following with the same concept and taking efforts to make efficient research of the market. It develops with a report that helps in recording quantity of goods and service required to produce on the basis of needs and demands.
- Materials: It is determined that there are several goods which UK has to import from different other countries to produce with there finished products. Thus, they have to highly depend upon different places to get these materials and manufacture, or directly import ready made products. Primark is importing with large number of goods from various countries as it lacks in cotton clothes production.
- Wide scope of market: UK is efficient enough in producing with many products that can be exported to either in domestic market and international markets. Further, they are been distributing with large number of products to different countries which are out of the boundary. Thus the scope of market gets broaden and benefit directly goes to various industries established in nation.
- Economy: The development of the economy is highly depended upon profits earned by government by different means. When the trade relations of country are efficient with all nations, it will help in enhancing the profits of industries. This will give benefits to economy as well by developing sources of income and increasing living standard. The GDP of nation will grow and economic condition will be flourished.
International trade is very significant and helpful for the UK business firms in order to operate in the country very smoothly. The respective trade policy helps to the companies in order to enter in new as well as different emerging market.
Apart from this by using the international trade UK organisations are easily able to enter in the international market and increase their global presence across the globe. When the business will enter in another market then customers as well as market share will be increase of the UK business entities. Apart from this it allows various benefits to the firm by which it will be able to freely trade and exchange goods and services in easy way. Very main and key advantages of the international trade for the UK firms are that expanding the business, cover international market, increase range of products and services, enhance sales as well as profit etc.
4.2 Impact of global factors on UK
By evaluating from the market it is been stated that with the development in the economy, it has enhanced with the number of opportunities for the companies. Thus, they can develop with the business and earn high profits to attain a greater market share. There are several global factors which on a greater level and have a impact on the functioning of the business:
- Global growth: This factor is highly evaluated as this will assist the companies to expand with there businesses by doing international trading with other countries. This is having a positive impact on getting the profit and developing with there goodwill in the market (Halbert and Ingulli, 2014).
- Impact of government: For going for international trading, there are several types of regulations and legislations which are been stated by the UK government. Thus, they maintain a regular check on the companies which are going for trading with other countries. This is due to the reason as to evaluate that the international trading is not having any negative impact on the country.
It is been seen that UK is adopting with BREXIT, this is a negative sign for the country as they will not be able to go for trading among EU countries easily as it is becoming independent country.
Furthermore, there are various types of factors affects to the business environment whether they are internal or external elements. In context to this different global elements which are highly affects to the business organisations of UK are such as taxation policies of world economy, increasing presence of the firm at the world level etc. apart from this the BREXIT influences to the overall UK market as well as every industries in negative manner.
When the Britain was exited from the European union then retail industry and oil and gas industry of the UK affects and prices of shares of the firms are decreased by high declining rate. In terms of the global factors when the business expand in international market then opportunities to earn more profit will be increase and then growth rate of the firm as well in the industry where it operates.
4.3 Impact of policies of EU on UK businesses
EU is having a greater level of power in all the countries which are included under it. They are having the authority to develop with the rules and regulations for trading. Further, all the countries are having the rights to go for free trading among the countries. There is no tax or any other regulation which can hinder them for international trading. Moreover, it has a higher influence on the companies of UK by spending and taxation law, spending and directive and also providing with subsidies for supporting the companies (Aras and Crowther, 2011).
This will assist them in enhance with the job opportunities for the people. hey have been provided with rights that all the EU countries can trade between themselves without any kind of barrier. If the companies are having license they can easily import or export their goods to different countries. National authorities are responsible for monitoring the activities of the business organizations.
Further, the directives are been implemented in the national legislation effectively.
European Union is an organisation which provides different types of facilities to the UK business organisations and provide various growth opportunities as well. EU allows companies in order to trade and exchange goods and services without any taxation charges. When the companies of UK export and import products and services from another country then the EU not takes any types of tax and tariffs. Apart from this the European Union is a free trade area who offers to the UK business organisations in order to do business without any obstacles. Hence, it can be analysed that the policies of European Union are affects to the UK enterprises in positive manner.
From the above report, it can be articulated that every firm needs to evaluate with the environment factors availing in the market to grow the business to a greater extent. Thus, Primary must identify with the factors which are highly having there impact on the functioning of the company's activities. Further, the privately owned as well as public owned sectors are been determined and there objectives to be fulfilled. Moreover, with the analysis of this, it has been found that each organizational structure has its own set of targets and goals which are to be achieved by them. Market forces have a higher impact on the decisions taken by the company in respect to the pricing as well as the development of the output. Furthermore, in the end the policies regarding the international trading is been stated. Thus, the term BREXIT and its impact on UK gives the clear view of the trading system in it.
You may also like to read:
- Alcidi, D. and Gros, D., 2011. Great recession versus great depression: monetary, fiscal and banking policies. Journal of Economic Studies.
- Dickinson, G., 2013. SMEs and the business reality of Estonia's tax regulation environment.,International Journal of Law and Management.
- Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic management for travel and tourism. Taylor & Francis.
- Fernando, A.C., 2011. Business Environment. Pearson Education India.
- Gibbon, J. and Sliwa, M., 2012. Critical perspectives on Fair Trade: an introduction. Critical perspectives on international business.
- Gottheil, F., 2013. Principles of economics. Cenage learning publication.
- Haigh, M. M. and Brubaker, P., 2010. Examining how image restoration strategy impacts perceptions of corporate social responsibility, organization-public relationships, and source credibility.