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Unit 1 Business Environment Assignment distinction Copy
Diploma in Business
Unit Number and Title
Unit 1 Business Environment distinction Copy
There are various set of organization is set up and established for the different purpose and functions of the business man. In the first part of business environment organization behaviour and structure are considered then functions of the organization are taken into consideration. With the increasing ramification of this changing economy international trade is being deployed by organization in its internal and external set of activities for the enhancement of business. In addition to this PESTL and SWOT analysis are the most effective tools which are used business environment assignment distinction Copy for development of effective business system.Global factors of UK and European Union are the most valuable factors that put into emphasis upon while coming up with strategic planning.
1.1 Identify what type of organisation is Primark and discuss its purpose. In addition identify and discuss the purpose of one organisation within the following categories?
Background- Primark is an Irish clothing retailers operating in Australia, Belgium, France and other countries. This company has been running its business since very long time and currently Paul has been appointed to take care of all the businessactivities as a CEO in the key managerial persons. In addition to this Primark has been founded by Arthur Ryan in June 1969 in order to promote fashion industry and its customised products in France. Primark is being accustomed with the orders and directors issued by the promoter of its parent company name Associated British company (Evans, et Al, 2016).In this fast moving business environment there are various sort of business is incorporated for the effective functioning of the business. there are various types of business are incorporated by the promoters group for the smooth functioning of the business such as sole proprietorship, partnership, private company, public company NPO, NBFC, Banks and other corporate bodies.Primark is generally a private multinational company which is running its business with the help of more than thousands of employees in all over the world. There are various set of activities which are performed by organization in retail fashion industry.There are following purpose of the Primark Company in this sophisticated world in order to accomplish set objective and goals (Cheeseman, 2016).
Purpose of Primark:
- Making profit- Primark is a private company which has been running its business in order to earn more profit and satisfying clients’ needs. With the available information in its current annual report it is observed that company has earned 673 million GBP (2015) out of the turnover of 5.347 billion GBP (2015) in determined approach. In addition to this company has been outsourcing its manufacturing activities to other persons for the better product quality.
- Increasing sales- This is related with selling of products and goods in the market. Primark has been selling high volume of products and fashion clothes with a view to capture more market share. Currently company has grabbed more than 20 % market share infashion industry. In addition to this company hasturnover of 5.347 billion GBP (2015) which has depicted that company has shown effective growth in its selling format eh last year.
- Strategic alliance- This is the relation or strategic planning made by Primark with a view to make expansion of the business. it is observed that company has been indulge in several set of strategic alliance which provides a best valuable business plan for capturing more market and earning relevant profits. In addition to this Primark has been developing strategic plan to penetrate the market with its offering in timely manner.
- Managerial jobs- Primark has achieved high level of business in a short time of span and number of employees and high investment in machines and plants are the most valuable factors. Therefore Primark has created high managerial jobs for qualified persons who can take care of all the employees in effective approach.
- Avoiding unnecessary Risk- Risk is the prime concern of each and every organization. Primark has been following several risk aversion strategies in which various plans and procedure are taken into consideration for effectively handling of the business functioning of the business. In addition to this actual owner of the Primark are shareholders who invested their money in the proper functioning of the business. It is company’s prime objective to provide them risk free return on their investment.
- Sustainable brand image- Primark has been selling its products and goods in fashion industry since very long time. With the help of its annual report it is observed that company has been compliance with corporate governance and making effective legal compliance system in its business strategy.
There are other functions which are followed by Primark in determined approach given as below
Vision- It is concerned with various set of activities and plans which provides where company want to be in its near future. Primark has established its vision to enhance its business and establish more than 400 Outlets all over the world.
Mission- This is accompanied with written statement which provides course of action for the proposed goals and objective of the organization. In this Primark has established mission statement to capture more than 30 % market share in fashion industry in next 4 years.
Objectives- The main objective of Primark is to earn more profit while at the same time providing high quality products to clients in determined approach.
CSR- It stands for corporate social responsibilities. Primark has been complying with all the required rules and regulation and has been indulge in CSR activities in determined approach to promote society and stakeholders.
Co-Operative-This is the body which is established with a view to promote social activities. This business is owned and run by only associated members in determined approach. This is related with providing equal benefits to associated members with a view to promote social activities. In Today’s world there are following co- operative society could be incorporated.
- Consumer Co- Operative
- Worker Co- Operative
- Producer Co- Operative
There are following purpose of Co-Operative society which could be defined as below
- Making profit-Co-Operative society is incorporated by bunch of promoters with a view to earn profit and share it among members.
- Partnership among members- It is established by the set of persons and determined member’s with a view to share earned profit.
- Creation of jobs-Co-Operative society provides an effective working mechanism to members in which they can perform set tasks in determined ways.
- Risk Sharing-Co-Operative is coupled with various members who share profit and risk in given approach. It results into sharing each and every one’s risk and provides support either mentally or financially.
1.2 Describe the extent to which Primark meets the objectives of its different stakeholders?
Primark has been running its business effectively with a view to earn set objective and goal in effective approach. Primark has been accompanied with various stakeholders such as employees, government, shareholders, suppliers, promoter, banks, and lenders,Persons in concert, clients and other persons who ever are having interest in the working of the organization. In order to describe the extent to which Primark meets the objectives of its stakeholders are given as below (Evans, et. Al., 2016).
- Employees-These are the persons who are making consistent efforts for the proper functioning of the organization. It is understood that employees are the key pillars of the company without which company cannot run its business. Primark has been outsourcing its manufacturing activities and getting work done from the outside of the business arena. Only sales people and managerial concern are the most valuable part of Primark. Company has been following effective motivation theories and officering Employee stock option scheme for aligning the interest of employees with that of welfare of the organization (Larkin, 2016).
- Government- Primark has been running its business all over the world therefore company has to make compliance with all the required rules and regulation issued either at domestic level or international level.
- Supplier- There are various suppliers who are providing finished goods and services to the company. Primark has been making payment to supplier at the stipulated time and has never defaulted in redeeming their promissory notes which was created at the time of entering into contract.
- Clients- Primark has been offering fashion cloths and other goods with a view to satisfy clients’ needs and demand in determined approach. It is observed that Primark has provided high quality of cloths and has following international quality check in its value chain activities. Therefore in order to satisfy prime concern of theclients Primark has been offering high quality of products and goods on consistent basis.
- Lenders- This is the banks and financial groups who are providing high amount of loans and debts to Primark for its smooth functioning. Primark has never made any default in the payment to banks and lenders. In addition to this company has been maintaning high credit rating issued by authorised international banks.
- Promoters- This are the persons who incorporated the organization. The only demand of the promoters of the organization is to earn profit and establish an effective brand image. Primark has been offering high return to its promoter throughout the time and established a valuable brand image.
- Person in concert- There are numbers of persons who are having interest in the functioning of the Primark. Primark has been offering good amount of dividend to its shareholders. In addition to this company has been complying with all the applicable laws and regulation.
1.3 Explain the responsibilities of Primark as an organisation and the strategies employed to meet them?
- Responsibilities of Primark- Primark are the highly ethical organization which has been running its business in very sophisticated approach. Organizational responsibilities an ethical behaviour of an organization while conducting and reviewing business. It can also be explained as corporate social responsibilities, sustainable business, corporate performance, Corporate citizen, responsible business functioning. Primark has several responsibilities toward its stakeholders such as shareholders, suppliers and social people whoever is having direct and indirect interest in the company.
- The main responsibilities of Primark are toward its clients in its product offering. It is assumed that company has to offer its product which should be appropriate and according to the quality of standard established in industry. Primark has set up ethical working channel in its value chain activities which has provided that company has used all the relevant means and assets to establish an effective productive system
- Ethic and law: Primark has set up effective mechanism which establishes different structure and means to distinguish ethical and legal work in the complete functioning of the organization. Many times there were observation of event of Primark that encouraging slavery, outrageously high taxes and unfair legal system. Primark has been setting equilibrium in ethical and legal working environment of business. In addition to this company has used very high profit amount to add in its product selling price and paying high amount of tax in determined approach. Primark has very less amount of employee turnover and has been rewarding employees throughout the time with a view to increase the productivity of the organization.
- Primark work culture: Primark has set up an effective organizational culture with a view to avoid the employee’s religious conflicts and problems. In addition to this various inequality and employment law cases are observed by top movementas serious issues.
- Reporting responsibilities: Primark has been compiling with the entire legal and accounting standard while making reporting with its stake holders. Furthermore company has appointed Certified public accountant to prepare its financial accounts in determined approach so that proper reporting could be made with authorised authority.
- Corporate governance: Primark has established a separate legal department with a view to establish an effective mechanism for legal compliance and following all the applicable rules and regulation.
- Corporate social responsibilities: Primark is world Class Company and making contribution of at least 2 % of its three year average net profit to its corporate social responsibilities. Moreover company has been making donation in several funds and NGO in order to promote arts science and other factors of this economic.
2.1 Different countries operate different economic systems to attempt to allocate resources effectively?
Economic system- It is the system which is based upon the economy’s want and need in determined time. In this system all the organization from different places make joint efforts so that clients demand and need could be accomplished in effective way. As per the particular point of view of the stakeholders of the organization production system of goods and services of the organization throughout the time is completely dependent upon the available resources and other available capital of the economy. In this fast moving world where there is scarcity of the resources is found it is hard to manage resources efficiently with a view to cater people needs and demand. Therefore it is government who attempts to the allocation of resources effectively in organizational bidders. It is economic system which is the underlying point while deciding how the scarcity of resources will be used to make effective production of foods and services in determined approach (BANICA & HAGIU, 2015).
There are several approaches of economic system has been adopted by different countries with a view to develop an effective working mechanism (Heydon, 2016).
CUBA: It is the free market economy where is less government policies and intervention are involve which influence demand and supply of the people at large. Furthermore economic system of Cuba is also accompanied with high availability of resources and less demand of product in this given market segment. Therefore price and productive environment depends upon how organization is dealing with economical polices and people demand.Economic system of the Cuba is less concerned with how to distribute resources in the production of specified goods and product but it is focusing on how to export goods to outside the world.
United Kingdome: The economy of UK has been suffering with recession since very long time which has resulted into loss in company’s GDP. There are various changes are made in the economic condition of the U.K.
- Increment in Value added tax
- NO arrangement of Non-profitassets of Bank
- High imposition of Tariff and traits
- Low interest rate
- Less government Intervention
- Primark operating
With the reduction in Government intervention and less interest rate has rendered company to make investment in its operating activities so that more production could be made in determined approach. In addition to this inflation rate of UK is also very stable that has allowed Primark to make effective use of resources for cater the need of people at large.
China: Economic system of china is very effective as there are found more raw material and more human power to covert that raw material in finished goods. China has been following mixed economic system in which public and private bodies both make effective working system for the production of required products and goods. In addition to this various blue chip companies have been indulge in production of required goods. Unlike the other countries China has been exporting highest amount of trade goods for the betterment of world. In addition to this mix economy of china has allowed government to make intervention only for the social development and economic welfare.
There are following characteristic of Mixed economy:
- In this type of economy both public and private organization makes collective efforts to cater the need to people
- It helps in controlling monopoly practices and promotes healthy competition in specified industry
- Price mechanism and price regulation are simultaneously maintained by the government regulatory bodies and organizations at large.
- Governments and other authorised bodies are more inclined toward the betterment of organization’s system (Cheeseman, 2016).
2.2 Assess the impact of fiscal and monetary policy?
Fiscal policies- It is the tool and mechanism which is used by government and other department for controlling flow of money in the economic environment.It is the tool which is deployed by government with a view to control the money in the given economy. There is seen that if government want to make growth in the economy then there will be high amount of expenditure in various government action plan. If government want to control inflation rate of economic growth then there will be less expansion plan and increment in tax rate which will lower down the company policies and framework (Geyfman, 2014).
Monetary policies- It is the government plan and tool which is used with a view to control the economy. There are various functions are performed by government in order to control Economic of the country such as issues of gilt securities, increase, decrease of rate of interest, expenditure and budget plan for the economic activities. This policy of government has huge impact on the growth and funds of economy. It provides the best effective approach to cater the people needs and demand (Gupta, 2013).
Impact of fiscal and monetary policies on farming business.
Farming business is accompanied with activities of production of foods and raw material in identified approach. monetary policies has been used by government to promote this farming business as high amount of donation in this sector by the government has resulted into low cost of production and has rendered farmers to get rid of interest burden. In addition to this farmer has been offered low interest rate loan so that they could make more production for the better development of economy. Monetary policies are being used by government to promote farming business in U.K. which has resulted into low inflation rate in determined approach.
Fiscal policies are used to cater the growth of the economy. Government has used various tools and method throughout the time with a view to develop an effective mechanism for the betterment of current economy and increasing farming business. In addition to this government has been issuing various bonds and gilt securities for the betterment of farming business.
Impact of fiscal and monetary policies on housing business.
Housing business is coupled with activities of development or building house. Monetary policies has been used by government to promote housing business by reducing the home loan interest rate and also provided a good help in the betterment of real estate business.
Fiscal policies are used to cater the growth of the economy. Government has used various tools and method throughout the time with a view to develop an effective working environment of housing business. Moreover government has issued several polices and regulation to make housing loans easy and less cost associated program for the people.
2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization?
Competition policies- It is the policies and statutes which are used by organization with a view to cater the competition in industry and maintain a positive level of working environment in industry. The competition of company has high level of impact on the organizational growth and profit earning capacity. The main objective of competition policy is to make sophisticated changes in the working condition of the organization and develop an effective technology in business working environment (FELDMAN & BIGGS, 2012).
- There are various polices issued throughout the time for the betterment of the organization working conditions.
- The enterprises act 2002 provides a safeguard mechanism to organization who is suffering from market abuses. In many cases private organization leads to take advantage of this strategic alliance with a view to dominate market
- The completion act 1998 was created with a view to abolish those activities which create a circumstance with a view to eliminate the competition form the market. The impact of polices in private and public company is found on their price fixing methods, using inappropriate methods to dominant the market.
- The enterprises regulation act 2013 is issued to establish a separate body or new competition and market authority (CMA). This authority establish with a view to Control Company from inappropriate activities (Mensi, et. Al., 2014).
- Set of private bodies or department for business innovation has issued several policies and regulation for controlling business activities in determined approach.
- There are other bodies too are engaged in controlling market pricing policies, terms and condition and other factors which provides a positive factors in determined approach.
3.1 Explain how pricing and output decisions of businesses is determined in the following market structures?
There are various organizations which are working in order to run their business and accomplish set of goals and objectives.The pricing or output decision of the business is generally depends on the current position of the company product in the market. The demand and supply of the product in the market plays a key role in determining the price and level of the output of the company. The market structure of and country includes the relation between the demand and supply in the targeted market and the level of competition between the companies in the market. A product may have high demand in one market and may have very low demand in the other market. The demand of the product generally depends upon the environment of the company and the need of the customer within the market. The detail discussion on this market structure and their effect on business are as follows-
- Monopoly- Monopoly is the situation where single firm has the dominance over the market. In this type of market the seller is free to determine the price of the product as the customer has no alternate choice. The new entry to this type of the market is very difficult. The company in this type of market generally concentrates on increasing the level of output to meet the customer demand.
- Perfect competition- it is the situation where there are many sellers in the market and they have no control over the price of the product. There is various this type of market focuses on delivering the product at the lowest cost to get the competitive advantage. The entry to this type of market is very easy.
- Oligopoly- In this type of the market there are few sellers in the market which determines the price of the product. The buyer and seller both have equal effect on the price of the product. The entry to this market is possible but is difficult.
- Duopoly-This market is similar to the monopoly situation where the price is determined by the seller. It basically has two sellers and the customer has to make choice between them.
3.2 Illustrate the way in which market forces (demand and supply) shape organisational responses using a range of examples (diagrams are essential)?
The market forces generally include the effect of demand and supply on the price and output of the product. The employee should understand the relation between these factors to increase the profitability of the business (Jochem& Reitz, 2014).
If the demand of the product rises than the company should increase the price of the product on the other hand if the demand of the product starts declining than the company should reduce the price of the product to attain consumer equilibrium. The simultaneous increase in price with demand will help in earning a good profit on the company product. Whereas, on the other side the decrease in price when the demand decreases will help the company in avoiding the dead stock.In addition to this company has been complying with all the required laws and regulation in determined approach and has established following methods to complete its responsibilities.
If the supply of the product increases the company should reduce the price of the product and on the other hand if there is decrease in the supply of the product the company will increase the price to earn a nominal return on its profit. If the demand declines the company should increase the price of the product to cover the loss. On the other hand if the supply increases the company will reduce its price to sell its entire product and earn appropriate profit for the business.
The competition in the market also affects the pricing and output decision of the company. If there is low competition the company can charge high price for the product on the other hand if the competition between the companies is high than the company must concentrate on reducing the price of the product.
3.3 Judge how the business and cultural environments shape the behaviour of a selected organisation?
Market structure of the business is comprised of perfect competition, Monopoly, oligopoly and other business structure in this fast moving economic.
The environment in which the company operates has a huge effect on the functioning of the business. The preference of the customer is different in each market. The demand of the product may be very high in one market on the other hand it may have very low demand in the other market. The marketing management should determine the preference of the customer before entering in the market. The forces in the market which generally affect the business are political, social, legal etc. The company should analyse the effect of these factors before deciding to enter in the market.
In this fast moving and high competition industry there are two core competencies which should be developed by each and every organization for the proper sustainability. Cost leadership and product differentiation are the most effective strategies which are used by organization
4.1 Discuss the significance of international trade to UK business organisations?
Business is comprised of several complex set of activities in which various functions are performed in orderly manner to accomplished set of goals. In this report it is observed that there are various set of corporate bodies which could be taken by an entrepreneur for the setting his own business.International trade is becoming very effective throughout the time with a view to make world economically open. International trade has been becoming huge and now several countries are making regional block in order to promote international trade and reducing tariff and traits. There are several international trade blocks such as EU, NAFTA, and AFTA and furthermore (FELDMAN & BIGGS, 2012).
- Body context: International trade in consisted with exchange of goods and services all over the world. U.K. has been making several internationaltransactions with other countries for the effective economic growth and otherbenefits which are given as below (Jochem, & Reitz, 2014).International trade has made effectively sustain the economic strength of the country and has been helping high international brand image.
- Arrangement of foreign reserve-International trade has helped U.K. to gather foreignreserve which strengthens countries economic value in determined approach.
- Effective economic growth- Positive balance of trade of the U.K. throw-out the time has resulted into high effective growth and provided the best suitable course of action for the development of the international image of country.
- International brand image- Establishment of regional trading block with other sophisticated county helps U.Kin creation of effective international brand image.
- Availability of technology-The international trade has made possible for U.K. to create brotherhood in its economical relation with other countries. This will not only provides the new technology but also helps in brain drain of the most talented people in the development of country.
- Assistance from several bodies-World trade organization, International development bank and other bodies have assisted U.K. to make effectively maintained its international policies and frameworks in effective manner.
4.2 Analyse the impact of global factors on UK business organisations?
Organization is comprised of several set of stakeholders such as employees, shareholders, promoters and persons working in concert. Therefore it is observed that organizational behaviour and structure are dependent factors upon vision, mission and set objectives. The Fiscal and monetary policies are the key concern which is observed by top management in preparing of strategic and tactical planning of the business
- Global factors- These are the international factors which affect the economic conditions of the U.K. in significant manner. U.K. and other countries cannot control over such factors and has to develop its international policies and frameworks as per these factors in determined approach.
- International policies- U.K. business organization are comprised of several set of activities and they make their business policies by considering all the international and national policies. WTO, IMF, IDB and other authoriser’s policies are used by business organization to come up with international business strategies.
- Globalised economy- It is related with other countries policies and other regulation with a view to promote international trade. The economic factor which are generally affecting the organization UK are global economic crises, high fluctuation in stock market ,cost advantage possessed by emerging superpower.
- International technology uses- throughout the time with the ramification of changes several organizations have been using upgraded technologies and tools for the better development of its business process system. U.K. business organization in order to increase its quality standard to international level use upgraded technology in determined approach.
- Legal factors- Globalised world has provided several hurdles and opportunism throughout the time. U.K. business organization making international trade has to comply with other countries rules and regulation as well. In addition to this other international rules and statutes set up by WTO, IDB and other international department authority should be managed in determined approach.
4.3 Evaluate the impact of policies of the European Union on UK business organizations?
E.U. is accompanied with 28 countries that are located primarily in Europe. This is the regional block incorporated with a view to promote international trade at specified terms and conditions. With the changes in the EU due to the exit of Britain has resulted into very much loss to other counties such as U.K., U.S., France and other countries. There are so many policies and regulation which is issued internationally with a view to promote and control international trade in E.U.
There are some of the policies which are issued by EU which affect the organization in U.K. Tariff and trades-organization form U.K. has been importing raw material form other members at zero tariff rate but as the zero tariff and traits of the regional block has resulted into loss of revenue at large.
- Employment policies- EU has established all the policies and framework in the favour of employees. The focus is to promote an international working environment in all of the organization so that international work culture could be maintained. This results into high expenditure toward employee management activities and gradually ends up with high cost of production.
- Taxation polices- This is related with high level of business activities and provides various set of taxation plans. EU has set up a common tax rate for the corporate bodies in order to establish harmonised taxation policies to all EU members.
In the end it would said that each and every organization should observe all the legal and ethical policies in the working environment. International trade has increased very much for the betterment of the organizational working system. There are various international policies and regulation has been issued by legal authorities on international level which needs to be followed by all the organization for the effective development of international trade.
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