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Business environment is the important aspect that is required to be taken into consideration so that organization can perform its working in an effective manner. So in this context various aspects are studied in detail to get the desired result. For this Business Environment global Assignment purpose Primark has to be taken into consideration so that its working in the business environment is analyses and evaluated in the better manner. Apart from that another aspect that is studied is the economy of Cuba, United Kingdom and China so that a reflection of the economic aspect of these countries is showcased. Another aspect is the competition policy of the UK is also studied with the help of tools that are used to create an effective market for the people. Competition aspects like perfect, monopoly, oligopoly and duopoly are also studied to get the idea about price decision and outcome decision of the business. All the market forces are described with diagrams to showcase its importance on the market structure. Also the factors that affect globally are analyzed in detail. Other than that international trade that has emerged as an important concept is studied in detail. BREXIT has also emerged as an important aspect that has shown a great impact on the economy of the United Kingdom. Another aspect the policies of the European Union that are evaluated so that if any changes are required in the business can be made in an effective manner for all the member country of this European Union.
PRIMARK is the subsidiary of the Associated British Food safety which has headquarters situated at Dublin, Ireland. This company is based on the business of retail clothing in various countries like Austria, Belgium, France, Spain, United Kingdom, USA and Italy. UK operation is present in England and Wales. This company only retails the product and is not involved in manufacturer of products. It also sells its product at low cost due to the effectiveness of economies of scale. It area of working is diversified as it deals in the product of new born, women wear, men’s wear, home ware, accessories, beauty products and confectionary. They work under the brand name of Penny’s.
Objectives of Primark
This is the one of the most popular organization that works with different criteria and based on different objectives. These objectives are mentioned below-
Purpose of Primark in the following category:-
In an organization there is the enormous importance of the stakeholders as they are the persons whose main objectives are the success and long term running of the organization. They are the persons whose interest cannot be skipped by the company. They can be in various area of working like directors, shareholders, suppliers, creditors, employees, customers, trade unions and many others. Each and every stakeholder has its own significance that can be helpful for the organization. Primark always tries to meet the objectives of the each and very stakeholders as if anyone is not satisfied then it would affect the working of whole company. Like Primark uses ethical trading websites to deal and perform transaction with its customers. Apart from that company always tries to make necessary changes in regards to the grievances of the customers in the proper time period to increase the level of customer satisfaction(Potts et.al, 2012). Company always tries to satisfy the shareholders need by providing dividends and tries various appropriate channels to communicate with them and solve their problems. Employee’s participation in the working has also become prime focus for the company as they are the backbone of the company and if they are not happy with the working environment then there are chances that they may not work with full potential. They even provide incentives to the employees for the purpose of increasing their motivation level. Creditors are the persons who lend money to the company in regards to the interest received to them in an appropriate amount so company always tries to use the amount in the proper manner and work to generate the profit of the organization. If they remain unhappy then funding of the organization would be reduced and company would suffer a huge loss(Schnackenberg et.al, 2016).
Each and very organization always wants to make there company work in the long run with profits. This can only be accomplished if organization takes their roles and working seriously and work effectively to accomplish their roles in different aspects of the organization. Responsibilities that are taken into consideration by the Primark are listed below-
These responsibilities can be effective if proper strategy is made by the company. Some of the initiative and strategy are mentioned below-
Cuba: Economy of Cuba is planned and run by the state due to the fall of the Soviet Union that has encouraged the self-employment and cooperatives. Apart from that government run most of the industries and tries to employ most of the labor in it. Due to its advancement in its various sectors housing, food care and free education facility fares has reduced but at the same time corruption has increased drastically. Tourism of this country has significance in the economy of the country. With the changing scenario economy of the country has also seen some drastic changes like updating of tax policy, autonomy for the citizens, adjustments in relation to the expenditure and many others. Increasing GDP has also shown as a good sign for the company as its tourism sector has evolved drastically due to its magnificent scenery and beautiful location. Country biotechnology and pharmaceutical industry is also showing a great improvement from the previous performance. Apart from that certain improvement are required in the finance sector as it is not fully developed that causes a bas impact on the economy(Cabezas, 2011).
United Kingdom: United Kingdom economy is ranked as the ninth largest in relation to purchase power parity and fifth largest in relation to GDP in the world economy. When these two parameters are merged then it became the second largest economy of the European Union (EU). This economy is the merger of England, Scotland, Wales and Northern Ireland and is the globalized economy. Apart from that it is the sixth largest in the term of import and ninth largest in relation to the export. Many sectors haveincluded the growth of the country economy effectively and efficiently. Like tourism has make tremendous growth in the sector that enables the growth of the economy at large. Agriculture in this sector has enhanced with the rapid growth of the technology that leads to extensive agriculture with intensive technology. Many changes are made in the economic structure like tax rate has become down and many new industries are able to set up there working in this country. London is treated as the financial management center of the world as well as service sector is the most important sector that contributes a large part in the economy. Apart from government has made various planning in relation to the development of the economy to the greater extent like they have planned to take into consideration the nuclear reactor by replacing the currently used generators. It has also planned various strategies to increase the scope of energy reserves(Clarke et.al, 2015).
China: China is the fastest developing economy of the world. It ranks second in concern with nominal GDP and largest in the purchasing power parity. China is sometimes called the global hub in relation to manufacturing. It is also rank second in relation to importing of goods and has become the market for consumer with fastest growing speed. Country economy has increased but its regulatory reforms are not as equivalent to that of pace of it. Many industries have also evolved like steel, iron, textile, consumer products, telecommunication and many others. For the effective growth country has implemented various strategies one such is five year growth plan and currently thirteenth year plan is being implemented. Apart from that various strategies to develop poor regions of China has made like China western development, third front, rise of central China plan and many others in this respect. Country has to make all necessary changes to decrease the rate of inflation for better economic development of the country as fuel and many others commodity prices has increased due to diminishing rate of supply of such commodity(Mohan, 2013).
Fiscal policies are the rules and regulations formulated to accomplish the task of regulating the spending rate as well as tax rate of the country to control economy of the country. Another policy that is somehow related to the fiscal policy is monetary policy. They are often called sister strategy to that of fiscal policy. In the UK economy country is trying various strategies to revise and reconsider their economy by revising and amending many rules and regulations that are connected to the advancement of the economy. Given below are the two sectors where there is impact made by the policies that are discussed below-
Farming- There arevarious types of farming that is practiced in UK like arable, pastor, mixed farming, horticulture, viticulture and market gardening. Agricultural subsidy is provided to the farmers for the better development of this sector for the effective growth of the economy. Another tool that is used is price floors that help to determine maximum or minimum prices of the products this helps in regulation of the market. These subsidies are provided so to encourage the peanut farmers, making reserves of various crops for the famine years, apart from that showcasing diversification in the economy by this sector.
Housing- Both these policies has shown a great impact on the housing sector of the economy of the country as government is working towards the reducing the rate of housing by making amendment in the interest rate that is currently charged apart from that government is also planned and implemented reduction of value added tax that helps in reducing the charges of housing in the economy of United Kingdom(Chatziantoniou et.al, 2013).
These are the policies that are made to prevent and diminish the unfair advantages possess by seller to the consumer in the market. So government intervenes to safeguard the interest of the consumer so that no problem is faced by the consumer in the market and the abuse to monopoly situation be avoided to the great extent to run the smooth economy. There are various competition policy running in the UK they are listed below-
One such company is the Easy jet that is British company that works for providing airways facilities to the customers at affordable prices that are lower than normal flight charges charged by other airlines. It takes into consideration all the guidelines of the competition policy so that no unfair advantages are used by it. Another aspect is that it charges low fare price but do not coincide with other companies in there working. So it shows that a fair competition is preferred by this company by competition with its competitor like Ryanair.
Pricing and output decisions are determined by the forces of demand and supply in the market. Market is based on the number of buyers and sellers present in it. So accordingly pricing and output decision are determine by the different market structure that are discussed below-
Market forces are demand and supply that affect the responses of the organization in relation to various aspects. Demand is the willingness of the buyer to buy the product at the given price and at given time in relation to the goods and services provided by the buyer. Demand is affected by the number of factors like price of the goods, price of the substitute goods, taste and preferences of the buyer, income of buyer and many others. Another market force is the supply of the goods and services in the market. Supply refers to the willingness of the seller to sell the goods at particular price and at the given time in the market(Stewart, 2014). These two market forces determine the prices of the product.
In the below diagram it shows the market equilibrium:
When demands meet the supply when demand quantity and supply quantity meets then it is known as market equilibrium. In the market there will be point where demand will be equal to supply then that point is equilibrium.
Market disequilibrium is the situation when demand and supply do not meet at the given either due to excess or limited goods or services. In the given below is the diagram that shows that there is shortage in the supply of the goods that leads to market disequilibrium.
In the above diagram it can be seen that there is the shortage in the supply of the quantity goods that leads to the market disequilibrium. So there are chances that price of the commodity will definitely fall that would leads to the equilibrium in the market structure(Snyder, 2015).
Business environment refers to all the internal and external factors that affects the business of the organization that are mentioned below in relation to Primark-
Culture is the behavior present internally or externally in the organization. Attitude and behavior of the employees affect the culture in the organization. Similarly, behavior of the outsider like customers also affects the organization drastically. Primark employees are present across the globe so company has to maintain its work culture accordingly. Similarly it also has to provide services to the customers to satisfy their needs that can increase the customers’ satisfaction that is helpful for the organization in the long run. So business and culture factors showcase the great influence in the organization that ultimately affect there working(Ho et.al, 2012).
International trade refers to the selling and buying of goods and services beyond the country’s borders. It is important way through which organization can expand its working to generate more revenue by the wider market to deal with. It is important as resources are utilized in an effective manner as well as goods that are not present in the country can be imported from the other country without any difficulty. It also initiates the competitive advantage of the company that helps in mutual benefit to both the countries. Like products that are not produced in UK can be imported from the France. Similarly, France can import goods from the UK at the lower cost that ultimately benefit both the countries at large. It also helps in the trade without barriers due to the existence of European Union(Chamberlin et.al, 2011). It also helps in the maintain share in the global market along with reduce the total dependency on the domestic market. It also increases the sales volume of the company when it goes to the globalized market. It also enhances use of emerging market of the developing country. It also overcomes the problem of fluctuation that occurs in the domestic market. But UK government has planned for BREXIT that can be beneficial for the companies of the country as it would increase the sales in the emerging market of the countries that are in the state of developing. UK is the small country with limited population due to which it requires extended market so BREXIT is preferred by the government but it would create barriers in the European market from which around half of the revenue is generated in the European Union market(Engelmann, 2014).
In the international trade there are many factors that affect the working of the organization of UK. Their impact can be analyzed by the way of PESTEL analysis. In the PESTEL analysis there are certain factors that can be analyzed on the parameters of political, economic, social, technological and legal.
All these factors affected the impact of the organization at the global level. So organization has to work as per the factors so that organization can leads to the success path with following all the rules and regulations. So these factors cannot be avoided by the organization situated at United Kingdom.
This is the union made by the 28 countries of UK to create a single market for all these countries who became its members. These member states have many advantages of being in this Union as it removes the barriers of tariff that is charged by the nonmembers’ countries. There is free movement of people, goods, services and capital without any barriers. Apart from that a monetary union is also made in which there are 19 members’ countries in which euro currency is taken into account by the member’s states. A treaty of Lisbon was made in the constitutional base on the European Union as there is the change in the structure on legal terms. In relation to the health care many changes are made to protect the health of the members of the Union. Development in scientific programed is made by the union to support this framework to do research and all other matters related to research(Klaver et.al, 2013). In the European Union there are many states that practice different religion so they practice secular religion in its working. There are 24 official and working languages present in this Union. All the important documents and legislation are being translated to all the official languages. Apart from that there are 150 regional languages that are spoken in the union so for them all the basic working and laws that are amended in this concern to protect the rights and identity of these languages people. But this union has taken a set back with the announcement of the UK to exit this particular union. This decision was to expand and diversified its marketing activities of the country to the great extent. So European Union has to make more changes in the working of this union so that a better and effective market can be made to enhance the economy of the Europe(Winkel et.al, 2016).
Business environment is the important aspect of the economy that plays the significant role in its development. Primark is the well-established organization that has contributed in the major sector for the development of its organization to the great extent. Another aspect is the responsibility that it has undertaken to accomplish its goal and with more appropriate strategy and planning. Another aspect that was discussed in it was the economy of countries that affect the economy at the global level. There are certain amendments required to be made in the economic practice of the country. Organization also prefers to use the appropriate competition policy so that no penalties are charged for any misconduct. Competition that helps to determine the price and output decision is required to be made correctly. Another aspect is the market forces that affect the market structure is required to be analyzed so that no economic crises can affect the working of the organization. Also various factors that affect the business and cultural environment must be analyzed in detail so that no problem may arise in the working of the organization. Another most important emerging aspect is the international trade that needs proper guidelines to be more effective. UK business is most affected with the announcement of BREXIT so it becomes important that correct policies be implemented to make the economy of the UK effective at globalized manner.
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