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Diploma in Business
Unit Number and Title
Unit 1 Business Environment
There exist different organizations that work for different purposes. Each and every organization goals and target are different but there common goal is growth of their organization. Some organization objective is to earn profit while others may be nonprofit one. So each organization requires different treatment and dealings. It is also important that these organization work towards achieving their motive in long run. Businesses operate in an environment shaped by the government, competitors, consumers, suppliers, and other international factors. So, it become important that how the organization reacts and faces the situation. Organization also has to consider all the ways in which they may able to sustain in business environment. There are also enormous forms and structure in regard of the organization behaviour.
PRIMARK is an Irish based retailer company whose operates in various countries like Spain, UK, Italy, USA, and Italy. Headquarter is situated at Dublin, Ireland. It is the subsidiary of Associated British Foods (ABF). Its brand name in Ireland is Pennies’. This company deals in different range of products such as kids wear, women wear, men wear, home ware, accessories, confectionary and beauty products. It has established its name and brand in the market. It also sells clothes at the lower price as compared to other brands in these categories. This company only sell the products, it do not enter the area of manufacturing instead it provide these work to developing countries of Asia like china, India, Cuba and many others (Wetherly et.al D. 2011).
Objectives of PRIMARK-
This company works on the policy of providing high quality of product at lower prices. Its main purpose is that people should be able to afford their products easily. So accordingly there are certain aims and objectives of this organization-
This organization also has its influence and involvement in various essentials like
Public sector- In the public sector the organization plays the key role. They are the important sector of economy that is influenced by the government in providing the services. There include various services provided by organization along with the government like in health, education etc. PRIMARK has a significant role in public sector.
Charity- It is an organization that is founded to provide aid and support to the needy people. PRIMARK also has its contribution in the field of charity. This company is involved in contributing to various charities, families, individuals in counties such as UK and Ireland. Charities are in relation to the children, their educations, health and safety. Many people around the world contribute in this field.
Cooperative- These are the various business organizations and fir that work mutually to achieve the same objectives. In the cooperative sector PRIMARK has made various partners and cooperative to achieve the desired result. There are various cooperatives like ASK (association of stimulating know how), AWAJ, the carbon trust, DFID and many more. These work mutually to achieve the desired goal and objectives. Like AWAZ works towards the betterment of women and their empowerment.
Stakeholders are the various personals or organizations who have common interest in the working of the organization. They are directors, shareholders, creditors, customers, suppliers, unions, employees and all the persons related with the working of the organization. Each and every stakeholder’s designation in the organization is different but there main interest is the growth and success of the organization. In company named PRIMARK who is dealing as the retail outlet in the industry of clothing, home ware, beauty products and confectionary. So for running the large business it requires to have good relations with its stakeholders. Each and every stakeholder expectations from the business differs as per their needs. Such as, Primark being an outlet received the supplied goods from the developing countries as goods are manufactured in these countries. Primark on regular time interval go through the whole criteria of working of their suppliers for assessment of their performance or any need of improvement. It also helps improving employment opportunity to these counties. Similarly, customers are the persons who buy the products sell by them. So for that purpose they have retained the policy of selling good quality of products at the lower prices. It increases their share in the market. Even customer grievances are dealt immediately and appropriately. Their main motive is customer satisfaction and all their policies are made accordingly. Other than those employees being one of the most important factors in the growth of the company. So it becomes important that they are given proper opportunity for growth and success. It provides employment to around 700,000 employees in about three continents. It includes managers of all the departments along with associates, assistant and leaders. Company has taken various initiatives for the development of employees in the organization. It also provides various incentives to its employees as per their performance in the company. Other than that shareholders who are the owners of the company require growth of the company as they have made investment in the origination. So it is important that company live up to their expectations. Apart from that company always try to fulfill all the expectation of the stakeholders in the organization (Faster; Primark", 2015) .
Primark being part of the society requires making contribution to it. There are certain responsibilities that are required to be fulfilled by it. They are illustrated below-
For all these responsibilities to be fulfilled, company has launched certain strategies to accomplish the goals. These are stated below-
With all the strategies and policies PRIMARK is on its way to fulfill all its responsibility towards the economy, society, and environment.(MESA-LAGO et.al ,2010)
Different country follows different economic system. As every country has different government and culture so every country follows different way in there working and running its operation. So, some counties economic system is mentioned below through which a peek can be made to their system in relation to economics.(Woods, J.E. 2015)
Economy of United Kingdom- Economy of UK plays the key role in the economy of the world. It is the second largest economy in the European Union by GDP and purchase power parity (PPP). The main factor for its success is the growth of the service sector with great efficiency. In historical term UK was the first country to be industrialized and adopt most of its policies. The major decision of leaving BREXIT leads to the fall in the value of pound that breaks the record of past 31 years. There are certain reasons for its various policies and its implementation in the system of economy. They are illustrated below-
Economy of China: China has the largest population in the world which is the main reason for its different economic system. It is one of the fastest growing economies of the world. Most of the contribution is by the manufacturing sector for its rapid growth in economy. It has second largest economy in accordance with GDP. . There are certain reasons for its various policies and its implementation in the system of economy. They are stated below-
You are required to assess the impact of fiscal and monetary policy on the following type of globel business
Farming- in UK, main contribution in economy is by service sector but then also farming has its own significance. Farming in UK is intensive and high quality machines are used in it. Around one-third of agriculture income is earned through farming.
Housing- monetary and fiscal policy of UK has a great impact on housing. In monetary policy, if there is change in interest rate then it always shows the impact on housing. So if changes are small then only housing sector would be able to cope up with that. Similarly fiscal policy has also shown great impact on the housing as due to reduction in VAT there is enhancement in social housing grant. As it has also increased the chances of affordable housing (Fragetta et.al, 2010).
You are required to identify at least five competition policy and other regulatory mechanisms in the UK and evaluate their impact on the activities of a selected organization(s).
There are certain policies made for the safeguarding the interest-
Other than that there is certain concept like state aid which also helps to safeguard the public interest at large. There is another regulation that is block exemption regulation in which only important cases are taken into account and other are sidetracked.
Organization named HP foods and Heinz has resulted merger for the growth of the company. But they were accepted by the competition commission as there were no damages to public at large. In this case both companies were competitors producing tomato ketchup. So there were issues whether it was fair trade practice or not. But by after proper investigation it was concluded that they would not have market at large. So it was accepted by competition commission of the country (Drinkwater et.al 2016).
Perfect competition- It is one of the structure of market where there are homogenous products are offered by enormous firms. So pricing and output decisions are determined in the ways specified by the economist. Price is determined by equilibrium between demand and supply. Output decision is determined when output is MR=MC that leads to profit maximization. Such as in agricultural sector in UK where many farmers produce the same crops. So decisions are made as per the equilibrium of demand and supply.
Monopoly competition- It is the market structure where there is single seller or producer and buyers are in enormous numbers. So pricing and output decisions are determined as per the ways specified. The demand curve in this competition states the downward position when average return is downward. There consist three cases when MR is greater than AR then AR rises, when MR is equal to AR then AR is equal similarly when MR is less than AR then AR moves downwards or falls.Like Jar kitchen in UK is a famous restraint outlet which creates its monopoly in the market(Baek et.al, 2015).
Oligopoly competition- It is the market structure where there are limited number of sellers but they have enormous market condition. In UK British airways falls under this category. All the major routes and ways are under its possession. Price determination under this model is through Sweezy model for non-collusive oligopoly when there are rigid prices. Output is determined as per the models prescribed by economist.
Duopoly- This type of market structure is similar to that of oligopoly. But in this structure there exist only two sellers in the market. In reality it states that two firm or organization possesses the control on the market. Companies like Carillion and Costain are indulging in rail and construction business of UK. They both control most of this business in this country. Pricing and output decision are determined by the market forces. Through the use of Cournot and Bertrand model price and output are determined effectively and efficiently (Jinji, N. 2012).
There are certain ways in which market forces i.e. demand and supply shape the organizational responses. Demand is the wish and desire of the consumer to buy the particular commodity in the market when certain factors remain constant whereas, supply is the willingness of the supplier to sell the particular commodity in the market at the particular price at per unit produce. These two forces shape the organizational responses. Such as- change in the quantity demand or supply in the current price (Burrows et.al, 2012).
In the above diagram, there is change in the demand quantity when price remaining the same. As demand changes when price is changed and vice versa. There is also the effect on the supply. There is movement in the quantity when price remain constant.
In this study the change would exist in any other factors apart then price of the commodity. Price discrimination and economic prices affect the consumer and producer surplus. There is the situation when demand meets the supply which is called market equilibrium as there is no excess
Here in this diagram, P1 represent the price and Q1 refers to the quantity at which demand and supply are intersects. When they both meet then it is called market equilibrium.
Another situation where supply does not meets the demand on any price in the market. This is called market disequilibrium. This is more practical in reality as most of the time supply do not meet the demand. An illustration is shown below-
Here in this above diagram, supply does not meet demand in the situation. There is excess supply when quantity supplied exceeds quantity demand. Due to which there is market disequilibrium. So it can be concluded that market forces i.e. demand and supply possess the great impact on the responses of the organization (Wogrin et.al, 2013).
Business and cultural environment possess a great impact on the behaviour of the organization. The culture refers to the values, beliefs and all other aspects that deal with the organization. This type of culture is called organizational culture. Its culture includes the behavior of the organization and its employees working in it. This culture is made as per the objectives and goals of the organization as well as resources and the marketing management that exist in the organization. Every organization has its unique feature that cannot be compared with others. In United Kingdom organization culture has its own significance. Like in UK organization employees are more focused on their work are polite while dealing with clients as well as they do not openly criticize any person or group of persons. There exist multicultural environment in UK due to which employees existed from various parts of the world that require the organization to make necessary settlement for coordination among various employees. There existed basic business etiquette that requires to be accomplished by the employees of the organization irrespective of their cultural background. Similarly behavior of business affects the organization to the great extent as the duty and the role of managers and leaders are determined by the structure of business. Due to the diversity present in the organization managers has to deal with this problem by proper analyzing the factors and scope of it. Good managers would be able to make necessary adjustments in the working of organization so that no employees suffer any racism or any other unethical behavior or discrimination in the organization. For fulfilling this purpose most of the UK has taken major steps to deal and reduce this problem. Organization has to focus on being unbiased to its employees by taking all corrective steps to eliminate this problem. Due to this reason organization has set up ethical code of conduct so that these problems may not arise in future. One thing that requires the notice is that every year many suits are filed for employment discrimination claim. So it become necessary that this situation should not arise as it may hamper the goodwill as well as financial balance of the organization. From all the above mentioned facts and analysis it can be stated that business and environment behavior has a great impact on the organization (Shah et.al, 2012).
When trading is performed across borders in relation to capital, products and services then it is known as international trade.Organization prefers to extend their business empire across the borders for the growth and prosperity of their business and also for its sustainability. United Kingdom economy and organization success is also affected by this trade practices.For fulfilling this purpose, UK has intended to withdraw its name from the European Union (EU). This action is popularly known as BREXIT i.e. British Exit from this union. Through this UK organizations may be able to work freely by without any hindrances of European Union (EU)
International trade has a great impact on the business organization of UK. Every organization intends to extend its working area across the borders for the purpose of huge market area. A country market is the limited access for earning profit so with wider market availability which leads to the chances of earning profit. So, big companies with enormous capital prefer to extend its business empire for the prosperity of the company.There are certain benefits associated with the international trade preferred by UK business organization. Like, the products that are not produced or available in the country can be accessed by the import through international trading. Similarly country that has non availability of certain goods can import goods from the UK. Consumers are also benefited with this approach as they get vast variety of option for the goods(BOSHOFF et.al,2010). Even there is utilization of resources with full capacity. There are comparative advantages associated with the international trading for example if UK organization does not manufacture certain goods then it can be imported from other country like France. Similarly country named France does not produce certain goods then it can easily manufacture the goods from UK. Through this way both the country and its people are benefited. But in current scenario UK government has intended to withdraw its name from European Union (EU) where around 50 countries of UK are member of it. By this step UK would not be able to perform free trade with these member countries with it leave the EFTA (economic free trade association). Similarly if it unable to remain in EEA (European economic area) then there are many chances that use of mobile phone in these area may rise to a great level that would directly affect the economy of the country (Bamidele Oyedele, J. 2014).
There are various global factors that affect the business organization in UK. These factors may be high rate of multiculturalism in these organizations, increasing intensity of international trade and many other enormous factors that affect the trade of the organization at international level. Due to the impact of these factors on the organization it becomes imperative to analyze its effect. For the analysis, PESTEL theory is taken into account (Klessmann et.al, 2011).
From all the factors mentioned above, analysis can be performed to ascertain the impact of global factors on the organization in UK (Spain/United Kingdom, 2016).
All the member countries in the European Union (EU) form the largest market of the world. Through this union agreement, there exists the free trade among all the members of the association. There are certain benefits associated with this union as all the trade are performed without the involvement of selling tax as well as there is abolishment of various fiscal policies in the trade practices. Through this business can run without any hurdles that existed before it. Even they are benefited as these countries does not required to comply with the laws and regulations but others nonmembers countries required to comply with all the procedures, rules and regulations. It saves the time and cost effectively which increases the margin in profit as well as help in the growth of organization on the long run. Various policies in this regard are being made like European Union competition policy that focuses on companies to work on hard and provide customers best product with best suited price. This enables the free trading in the market with sufficient profit margin. Through this policy small and medium scale business can run without any hindrances but this policy sometimes restricts the scope of large organization for the purpose of expansion of their business. There are other such policies like trade policy in which trading can be performed easily and efficiently but it binds the member countries to trade in the restricted part of the world. Due to which UK has not able to access the emerging markets of the world like of India and China. EU has reduced the scope of various organizations to work globally. Due to these reasons government of UK has intended to withdraw its name from the union. This process is popularly known as BREXIT. With the involvement of this method organization of UK would be able to expand its business in the emerging markets of the world. It will increase the political and economic stability. Apart from that UK has pound as their currency which is different from all others European members as they run euro in their market. So by BREXIT this problem is eliminated on large scale. As there would be free market so products can be imported from the sources where it is cheap and affordable. So through this benefit can be ascertained by poor people. As there would be no interference of EU so many basic industries such as steel are taken into account for the prosperous future of the country.
There are certain advantages and certain disadvantages of EU and BREXIT but with proper theories and implementation BREXIT may help the UK business organization to flourish and make certain able growth without any hindrances and complications (Bretix, 2016).
BREXIT i.e. British exit from the European Union would implement certain implications and complications but with proper and significant methodologies and theories hurdles can be overcome and a new scenario for the countries organization may be formed. This concept can turn the future of the UK to the new level.
Through all the discussion and reports it can be concluded that business environment may differ from organization to organization. Even with the change in policies and regulation criteria of business working also changes. Primark an Irish based company has adopted a good market strategy for the growth and success of the organization. With little bit more effort by the organization in its strategy can lead the company to never ending success path. In the United Kingdom many changes and alteration has occurred or are about to occurred over a period of time so it become important that these changes be accepted by the organization and its employees more effectively and efficiently. Fiscal and monetary policies in the UK in regards to farming and housing have also shown a great importance. It can be said that these policies possess great impact on these sectors. It is also needed to be considered that the changes that occur due to the forces of market i.e. demand and supply should be studied by analyst so that proper planning and implementation can be made to the organization. Apart from that BREXIT is going to play the role in tuning the face of economy of United Kingdom.
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