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Business is categorised into different forms such as private company, public company, government and many more. They have their own purposes in the form of mission, vision, goals and objectives and many more. Different takeholders are interested in the functioning of the business. Different nations having their different economic systems that helps in organisational success. Market is of different types in which different organisation performs their activities. Global factors affect the business functionality and impact them in both positive and negative measures. Primark business will be utilised in order to discuss different aspects.
Primark was launched in Ireland with the name “penny”. Penny redirect here for The American retailer J.C. Penny. Primark is operating its business in Ireland, Spain, Netherlands, and United Kingdom etc. Primark is working in retail industry and deals in clothing, house wear and Cosmetics. It is Subsidiary company of Associated British Foods and provides its services as per the demand of customers through its suppliers. Primark creates customer values, and always follow innovations and fashion- driven edge. Product specification is the main quality of Primark. The right goods to the right place at the right prices is the strategy on which Primark works .Primark offers a diverse range of products to its customers. Primark is a retail industry offers diversified range of products to its customers and beliefs in providing value to the customer’s money. Primark also follows code of conduct and legal compliances (Ezati Jivan, 2012).
Purpose of the Primark: Primark is working with the purpose of consumer satisfaction and welfare of the society.Primark is working with its Suppliers to know the consumer’s demand so that it provides goods to them as per specification. Company is working for the welfare of its workers working in different countries branches and head offices by organising educational programmes and also support them in vital issues. Company will also go for Building energy management system and take a step towards the safety of the environment (Ezati Jivan, 2012).
Company working in public sector: there are many public sector organisations working in United Kingdom Department of Environment, Food and Rural Affairs (DEFRA) is one of them the main purpose of the organisation is environment protection, food production and standardise ruler community (Ezati Jivan, 2012). Company in Charity sector: Campaign to protect Rural England (CPRF) is the charity working for saving forests and protection of environment. It also stands for the safety of England countryside.
Company works as cooperative: Dairy Farmers is one the biggest cooperatives in the Up operated by group of farmers for their mutual benefits. It is one of the largest and oldest cooperatives operating in UK (Rasha & Fady, 2013).
Objectives of Primark: Primark is working in retail industry and subsidiary of Associated British foods of UK. Primark offers wide range of products including kids clothing, women’s and men’s wear. It provides its services at the low cost below the market average price. The objectives of the Primark includes:
Primark is operating stakeholder engagement process by creating communication channel between stakeholder and company that enable stakeholders to be informed about and also influence decision making process of company (Dobrea & Maiorescu, 2015).
Responsibility of the Primark: Primark captured wide market in fashion industry. The bigger the organization the bigger the responsibilities. The aim of Primark is to make employees, suppliers and other community’s part of the success by working with them. Responsibility includes:
Primark form strategy to meet these responsibilities. Primark spread its business all over the world. As big retailer it realises its responsibility towards the environment and workers so it always ensures that products are made with respect for the worker’s right and the environment (Gray & Jones, 2016).
Primark follows good ethics and code of conducts in its business. Primark has an environmental sustainability team which work with the suppliers and their factories to implement environment sustainability programme.
As per the nature of product chemical management is required for the Primark. The company follows both EU and US legislation so that it can reduce bad impact on environment which occurs due to manufacturing of products. Primark follows Packaging waste regulations that encourage producers to become responsible towards the environment impact. Primark make the suppliers agree to follow the working standards as a part of terms and conditions of doing business (Gray & Jones, 2016).
Primark is not manufacturing its own products so with reference to the responsibility towards investors and Government Company audited its each factory with approved external auditors and internal auditors. This auditing helps the company to go insight into the working conditions labour standards of factories that supply the products of the company. Company also started a structural safety programme for the workers of all the factories where the products of company are manufactured. Primark also contribute in compensation programmes.
Apart all of this Primark also supports many local charitable trusts and also provide helps and advices on jobs and training to those persons who can work. So, the company is carrying its responsibility in an efficient manner. It follows all the ethical code of conduct and running its business with corporate social responsibility (La Rocca & Snehota, 2014).
Economic system: Economic system is the system by which governments of the countries distribute resources and trade goods and services. There are mainly three types of economics system. Economic system includes the combination of the various institutions, agencies, entities and customers that form the economic structure of the given community.
Economic System in Cuba: Command economic system is followed by Cuba which is denominated by start run enterprises. Most of the industries run by the government because at once there was a time when due to monopolistic organisations there was unemployment and deep poverty. After economic revolution government takeover the economic system and start recovery from low GDP level.
United Kingdom: United Kingdom follows mixed economic system. It has state ownership on some companies. It follows government regulations and also does social welfare but it provides market to globally competitive business organisation. UK has fifth largest economy in the world. Due to huge foreign investments and participation of foreign business organisation. There is requirement of mix economy (Baskonus, et. al., 2015).
China: China is also following mix economic system. China has to follow this economic system because a large part of the economy is covered by public sector than the private sectors. China is the fastest trading nation in the world and plays the important role in international trade so a certain kind of government restrictions is required in allocating resources (Baskonus, et. al., 2015).
The chancellor of exchequer and the Bank of England regulating the economic system of the UK. Fiscal policy and Monetary Policy are the main tools used by the regulators of economic system. Monetary policy is related with the management of prevailing interest rates and the supply of money in circulation. The target of monetary policy is to achieve low inflation. Fiscal policy relates with government spending and taxes to influence the aggregate demand. There were expansionary fiscal policy and deflationary fiscal policy. Both monetary and fiscal policy aims in creating stable economy with low inflation and growth (Kotler, 2015).
Impact of Monetary and Fiscal Policies in Farming Business in UK: UK is most populated country that it could not fulfil its own food needs. There is also a wide variation in sizes of lands. In spite of skilled farmers and high technology there is low earning from the agriculture sector. Farmers do not have their own land and there is also shortage of let farmland. And the prices of rent are so high. The young farmers are discouraged from joining the industry due to these reasons. For bringing the betterment in this sector government provides subsidies to farmers. Annual Investment Allowance, Agriculture Property relief etc are the benefits provided in current fiscal and onetary policy. Falling in average tax rates for farmers bring big opportunities. Government provide unique taxes and reliefs to farming sector for its development (Kotler, 2015).
Impact of Monetary and Fiscal policies in Housing: In UK government could not meet the requirement of homes for the growing population. The government wants builders, investors and local councils to increase the supply of homes. Government removes unnecessary regulations, providing finance in reasonable interest rates and helping those who cannot buy the home. The property tax paid in the UK is the percentage of the rent and mortgage value. If government increases the values of the tax rates then it affects adversely to public. Property of different classes is going to be taxed with different tax rates. Under the property tax system government appraise the monetary value of each property.
Thus a positive change in monetary and fiscal policy in farming and housing sector brings positivity in the public of UK and also change the economic performance of the country (Kotler, 2015).
Competition policy of UK: Competition policy means those policies which are formulated to prevent and reduce monopoly power of businesses in the economy. There are two types of behaviours adopted by the businesses collusive behaviour and Abuse of market power. Competition policy is working to reduce these behavioural practices. Competition policies are use to improve the competitive environment so that consumers can fulfil their needs. Competition law of UK is affected by both British and European elements (Andersen, 2013). Five competition policies are helping in improving the competitive process includes:
Greenery, JhonLewis partnership, Stemcor Swire and Palmer and Harvey are some of the largest companies of UK which are affected with the competition policy norms. Due to these norms competitive environment increases and prices of the products are under the control. These provisions also remove market denomination (Dan & Andrews, 2016).
There are different types of marketing management structure presents in the economy. Freedom of entry and exit , homogeneous or differentiated goods, nature of control over supply or output , control over prices and barriers in entry are the few determinates of market structures, Pricing and output decisions are taken by the business companies operated in different competition markets such as perfect competition, monopoly competition, oligopoly competition, and duopoly competition affects the whole economy (Sioshansi, et. al., 2011).
a) Perfect competition: Perfect competition is present in homogeneous product market. Here products are identical so there are no consumer preferences. Under the perfect competition both buyers and sellers are educated and well informed about the product and prices, so the prices of commodity are beyond the control of buyer and seller. Prices are determined by the equilibrium between demand and supply in short run. Under the perfect competition sellers are price taker (Sioshansi, et. al., 2011).
Under perfect competition seller can only supply equivalent to the demand in the market. Financial markets are the example of perfect competition.
b) Monopoly Competition: Monopoly is the situation where there is one seller or sole producer of product and large number of buyers. In monopoly competition seller has no close substitutes. In monopoly seller can change the prices for his products. Monopolist can change his prices from consumer to consumer. In monopoly market seller is the price maker (Sioshansi, et. al., 2011).
The above diagram shows difference between Market under perfect competition and Monopoly competition. Restaurants, different professions like plumbers, building firms are examples of these competitions.
c) Oligopoly competition: Oligopoly is a situation where few firms are in the competition in the market for a particular good. In this competition consumer is not fully aware about the product. Every seller has some specification in the product. Aircraft manufacturing, wireless communication, media and banking are some of the example of oligopoly market competition. There are no barriers in entry but it is difficult for new entrant to enter in the market. A sudden change in prices and outcome decisions of one business affect its rivals. In oligopoly competition enterprises are interdependent on each other so each organisation formulates its own pricing policy taking consideration in the pricing policies of the existing competitors.
d) Duopoly Competition: There are only two giant firms working under duopoly competition. In this each selling identical products having fifty percent of total market. These two firms may agree on a certain price or they can divide their market share. They can go for merge themselves into one unit and form monopoly. They can also try to differentiate their products in features. If sellers in duopoly market will produce perfect substitutes to the customers then they will engage in price competition. If goods of producer having differentiation in their product then each business company have a close watch on the pricing and output policy of rivalry firm. 1) Classical model of edge worth 2) Spatial equilibrium model 3) Stake berg’s model 4) Modern game theory model are used for determination of price and outcome decisions in duopoly competition (Choi & Hammoudeh, 2010).
Demand and supply forces in UK: Demand and Supply are the two market forces which are required to set the prices of commodities. Demand and supply is an economic model with helps in determining prices of commodity in the economy.
Demand means a desire, willingness and ability to buy a good or service. Demand refers total demand of consumers in the market. Supply means quantity of goods or service which producers are willing to sell at a possible market price. Supply can refer total output of all the producers in the market. A sudden change in demand and supply forces gives shape to the organisational responses (Harvey, et. al., 2010).
Demand and change in Demand forces: utility for a product affects the demand of commodity. Utility mean usefulness and satisfaction that is received by the consumption of good or service. Changes in demand occur due to the following reasons:
For example change in the prices of tea shift the demand curve of all the producers of Tea industry. In increase in the prices of tea demand for the tea will decrease and if there in decrease in price of tea demand of tea increases. There is a negative relationship between demand of a commodity and its prices.
(Harvey, et. al., 2010)
Prices of related and substitute goods also affect on demand. There is a positive relationship between Change in the demand of commodity and change in the prices of substitute goods.
For example: Tea and coffee are the substitute goods. When there is decrease in price of coffee, demand of tea will also decreases and if prices of coffee increases demand of tea also increases in the market. In case of complimentary goods like bread and butter there is inverse relationship between the price of one and demand of other. If the price of bread increases the demand of butter will automatically decreases.
There is a positive relationship between quantity supply of a commodity and it price. Generally producers offer more for sale at the higher prices and less at low prices of goods or services.
Change in supply of commodity also occures due to other factors like change in technology, prices of other goods, future prices and economical changes of commodity, subsidies and taxes imposed by government, change in the number of suppliers in the market.
Apart from Prices of the commodity, if there is change in other factors the supply of commodity changes.
For example if there is a change in new technology producers can produce more goods and supply more in the market this results shift of supply curve.
For example if producers of widgets go from the market the number of producers will decrease which also decreases the quantity supplied in the market.
Technology also shapes the organisational responses through the change in demand and supply. Innovation brings technology and technology brings product differentiation. If new products will manufacture and supplied to the market then it also affect the demand of the existing goods of the market. These changes in demand and supply help the organisations to formulate price strategy of their product.
Cultural environment of an organisation: Business environment includes all internal and external factors that influence a business. Environment of business is unstable, unpredictable, flexible, and volatile. Organisational culture includes collective values, beliefs, and principles of organisation of doing business. This is reflected in the structure of organisation and in the working of employees of the organisations. Culture is derived from organisation’s mission, aims and goals. Every organisation has its own culture which unique and different from others. So the culture shapes the behaviour of every organisation (Ben-Ner, et. al., 2012). Every organisation has its own culture which is influenced by the national culture of the country in which organisation works. Cultural environment of the country has impact on values, assumptions, attitude or behaviour of organisation. Change in cultural environment affects working of the workers, quality of the product, other stakeholders and decision making power of the organisations. Organisations may have strong culture or weak culture. In case of strong culture staff of the organisation behaves as per the organisational values. Strong culture is important for the service sector organisations. Strong culture helps in achieving goals of the organisation, increase employee motivation and loyalty, increase cooperation between department and divisions, and enable the organisation to become more efficient (Ben-Ner, et. al., 2012).
Weak culture is reflected where organisational values and beliefs exercised through excessive procedures and bureaucracy. Here, workers are not self motivated to follow organisational values and beliefs. Apart from strong and weak culture organisations have different type of cultures which includes: 1) Power culture shows dominating behaviour of one or small group of people within an organisation who take important decisions for the organisation.2) in role culture individuals have their particular role to perform which is already specified. They have to work as per their specified role rather than in a creative way.3) Where individuals are allowed to work in a creative way and express them is known as person culture.4) Contrast task culture is followed in those organisations where teams are formed to complete a particular task. Organisation may adopt any of the culture formats as per their mission and vision. “Google and Face book” set an example of healthy organisational culture (Ben-Ner, et. al., 2012). Many other organisations are also following fostering cultures that are aligning with their values and beliefs. For example “Adobe” earning its name in fortunes top 100 companies due to healthy organisational culture. It always supports its staff members in creative working. Employees receive patents for their ideas and bonus is also given to them for their creative ideas. These bonus and other incentives encourage employee’s loyalty towards organisation. In Adobe new products are realises through events where teammates are recognised for their working. Adobe shows that its values are well communicated in its departments. Organisations offer incentives and facilities to its staff so that they can follow the organisational culture.
Analysis of the organisational culture is necessary because it impacts on the working of the organisation. The organisation wills definitely got success in achieving its goal where it follows its culture considering the changes in the national culture (Ben-Ner, et. al., 2012).
International Trade: International trade refers to the exchange of goods, services and capital at the international level. International trade allows a great competition and competitive pricing of goods and services in the market that benefited with affordable products to the consumers. International trade helps consumer in getting those goods and services which are not otherwise be available to consumers globally. International trade provides new and potential markets, more profitable markets, increase competitiveness among organisation which results product or service betterment. International trade brought new product ideas, manufacturing innovations and new technology. International trade has great significance for the UK Business organisations. The concept of comparative advantage should be considered with reference to the international trade for UK business organisations (Krivokapic & Jasko, 2015).
Through the international trade organisations of UK have the chance to expand their business in other countries; this will increase in their profits. In the absence of international trade business organisation has limited local market of its country but international trade provides facility to have access in other countries markets and attract consumers towards their product (Krivokapic & Jasko, 2015).
In foreign business markets organisation faces more competition than its local market. The international competition brought new and innovative products for the consumers in the cheapest way. Foreign country also provides better business opportunities to the international trade organisation. Business organisations can also find new international investors and business partners. Cross boarder joint ventures will also take place. Export of technology from one country to other will take place Organisation can adopt new technology which is invented by other countries when these technologies are exported by one country to others. International trade helps to that business which could not create new high quality technology.UK business organisations can utilize the natural resources of those countries which have a huge amount of fuels, minerals, and many other resources. So, international trade fulfils the requirement of natural resources. Resources which are less used by local producers can be used by international producers. In return of the resources they can have more income for the government. International trade is efficiently allocating the natural and human resources and increase their better utilization. Different countries people have their own taste and preferences with reference to the good and services. International trade helps to understand these new trends and developed new products with unique features. International trade brought efficiency in production; countries are trying to adopt better methods of production to keep the cost down in order to remain competitive. International trade provide consumers goods and services globally (O’Connor, 2010). International trade facilitates countries to exchange goods or services with the use of money this will increase flow of money and increase foreign reserves of countries. Nation which has strong international trade becomes more prosperous and developed in the world’s economy. International trade helps in generating more employment opportunities through the opening of new industries for the fulfilment of demand of consumers of different countries. International trade facilitates country to consume those things which cannot be produced in its local boundaries. International trade brings stability in the fluctuated prices of goods. Thus International trade is significant for the business organisation (O’Connor, 2010).
Global factors of international trades not only affects UK business organisations but also other countries economy with which UK have trade relations. Global factors are only effects to those business organisations which want to do their business globally. Globalisation of the economy means buying, selling and distributing the products and services in most countries of the world. In globalisation similar products are not produced by all the producers they produces products in cooperation of each other and sale it in all countries. Globalisation makes sale of good very easier (Ali, 2013). There are many global factors presented in economic world which affects international trades between countries:-
Impact of the policies of European Union on UK Business Organisation: European Union is a political and economical partnership between 28 European countries. EU works for improvement in economic conditions of member countries and avoiding war with each other. EU allows free flow of goods and services between member countries and become a single market. Brexit means UK leaves the European Union. It is the decision of people of Britain that Britain has to leave EU through referendum voting process. The main reason of Brexit is that Britain remains backward in some issues due the restrictions imposed by EU.Britain blaims that EU made strict rules and regulations related with trade which is not benefited to UK’s economy. When the voting was conducted 58% of total voting was in the favour that Britain should leave the EU for its betterment. This voting has major impact on economy of UK. The value of the pound was down. UK lost its top AAA credit rating. The cost of the government loan was higher. Prices of the Stocks were down. It may bring other drastic changes in the economy of UK. Business policy of European Union governs the free movement of goods, services, people and capital among the member countries to achieve the objective of the single market. When any risky situation arises related with public, health, environment or consumer protection then EU restricts the supply of these elements.So, there is a great opportunity to do business in EU and when UK will not remains its member it cannot take advantage of this business policy. Food security for the population, climate change and management of natural resources keeping the rural economy alive these all are the part of agriculture policy of EU. UK will have to draw its own agriculture policy. Only a little population comes under agriculture sector and UK imports food product from other countries to fulfil its requirements. UK’s Tax policy also changes because taxation regimes are provided by the EU to its member country. UK is a developed nation it imports and export goods and services on the concept of competitive advantage, so to set new international link with other countries. UK will have to prepare new policies. EU member countries are strictly following rules and regulations of labour law .UK must change its policies regarding labour laws (McCullough, 2012).
UK leaves EU because UK has to invoke an agreement name article 50 of the Lisbon treaty which wants two sides to agree on the terms of split. The Laws of EU are applicable on UK until UK ceases its membership. UK will continue abide by Treaties and agreements of EU but it could not take part in decision making. The citizens of UK working with EU after leaving EU, UK impose restriction on those who have working in EU and then the citizens will change their employment (McCullough, 2012). For the individuals who are working with EU UK will have to make policies for them and save their rights. UK receives more benefits as a member of EU because it makes around 40% of international trade of its total trade with EU countries .
In the end it is concluded that organisation is having different purposes which get attained with the help of their effective strategies. Stakeholders having list of employees, management, government, stakeholders and many more. Economic system is utilised for allocation of resources in effective manner, and market is of different types such as perfect competition, monopoly, monopolistic competition, oligopoly and duopoly. Global factors influence the functioning of the business organisation. EU policies effectively put impact over the business organisations performing in EU.
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