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Unit 1 Business Environment global Assignment
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.
1.1 Identify what type of organization is Primark and discuss its purpose.
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-
- To provide product at affordable prices without compromising the quality of the product.
- To make a healthy environment for the working of the staff.
- To treat all the customers in the friendly manner.
- To solve the grievances of the aggrieved customers and staff on time.
- To increase the economy of many developing countries by creating employment opportunity for these people.
Purpose of Primark in the following category:-
- The public sector-Services provided by this sector company are related to governmental services. And those companies that do not provide these services are the private sector company. Services provided in this concern are benefited to society at large rather than on individual. Primark is also establishing itself in this sector as it is working in providing services to the society rather than to an individual(Dach et.al, 2014).
- Charity-Primark is connected with many charitable trusts, institution and many other needed organizations that require support from the company for various matters. Apart from that it is also attached with Job Centre Plus who required various advices relating to the job and any other financial matters. Due to its involvement in charity many organization or individual always tries to seek help from it.
- Cooperative-These are the organizations that are mutually joined to achieve the same goal from the corporation so that better and effective goals are achieved within time limit. Many such cooperatives are associated with Primark like carbon trust, ASK, AWAJ, AKUT, better mill initiative and many others. Primark work with these organizations to increase its working area and market for effective growth (Conti, 2014).
1.2 Describe the extent to which Primark meets the objectives of its different stakeholders.
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).
1.3 Explain the responsibilities of Primark as an organization and the strategies employed to meet them.
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-
- Company has to safeguard the interest of the society.
- Company is also required to make advances without hampering the environment.
- Initiate different measures to safeguard the interest of whole society and environment.
- Practice the best aspects in relation to the corporate social responsibility.
- To work with integrity and ethical and moral value.
These responsibilities can be effective if proper strategy is made by the company. Some of the initiative and strategy are mentioned below-
- Corporate social responsibility- This has become one of the most important tasks of the organization to comply and work with all the social and legal norms of the business. This is the subsidiary of ASF so the terms and conditions mentioned in the ASF are followed by the company to comply with this role.
- Environment- For the purpose of safeguarding the environment company has initiated the use of paper bags instead of plastic bags so that proper measures are taken to safeguard the interest of the environment. Apart from that company has also taken measures to control waste by performing task of regulating waste.
- Ethical trading- This is the initiative through which company would work on its own and tries to improve its performance irrespective of the competitors by applying fair means of trading rather than wrong means in it.
- Local community support-Company is trying to increase its participation in the charity and other related organization to safeguard the interest of the individual and the society at large. Due to its increasing working in this field many people are coming forward with their base of taking charity from the company. Apart from that company has also joined hands with job plus association to provide and guide in relation to the job opportunity for the people(Mayers et.al, 2013).
2.1 Explain how economic systems attempt to allocate resources effectively.
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).
2.2 Assess the impact of fiscal and monetary policy on business organizations and their activities.
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).
2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization.
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-
- Abuse of dominant position- It is the situation when the large and powerful business tries to show dominance on the small and weak businesses are called abuse to dominant position. So competition law has prescribed that no business can use this position to run its business by using any unfair means and mediums.
- Mergers- Another aspect used by the business is to combine with other business either horizontally or vertically so that a large area of market and business is created by the business to dominant market. So to avoid this medium government has tried various measures to support other business and avoid the monopoly in the market. So merger can only be made if it does not exceed the limit of the merger.
- Agreements to restrict competition- Many times agreement is created by the business by cartels or any other medium so that competition is avoided by the business by setting up of various rules and regulations. This type of agreement is illegal as it hampers the ineptest of the consumer so by the competition policy this is regulated to the great extent.
- State aid to business- Financial support is given to the business by the European Union so that competition may be present in the economy with effective working in the market. Fair and effective competition is promoted by the Union as it benefited the consumer at last. Apart from that it also provides financial help to the small and medium scale business to increase its scope of working for the effective and efficient completion in the market.
- Cooperation with other countries- It also provide support in relation to the all the laws that are applicable in the European Union. It is done for better working of the competition law so that harmony is created among country and no unfair means are used by the business in any country to accomplish its task(Chaney, 2013).
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.
3.1Explain how market structures determine the pricing and output decisions of businesses.
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-
- Perfect competition- It is the situation in the market when there number of buyers and sellers equivalent and no trace of monopoly is present. Price and output is not determined as per each individual buyer or seller. This competition is favorable for the customers as seller tries to sell its product at lower prices to meet the demand of the market and able to anchor themselves in the market for the long run. Farming produce can serve as an example of this competition in the market(Wogrin et.al, 2013).
- Monopoly competition- It is the market situation where there are many buyers and few sellers. Here price is determine without any danger of competition as sellers are very few so prices are determined by them only. Customers do not encompass the choice as they have no substitutes or options. So price is fairly determined by the firm and the sellers. In regards to the output decisions it become important for the seller to meet the demand of the customers by producing or providing output in adequate form and supply. So output decision in this respect is made accordingly. Example of the monopoly is the United States Postal Services (USPS).
- Oligopoly competition- It is the market situation in which there are few number of seller and enormous number of buyers these seller dominant the market with their ability and situation to the great extent to create situation in its favor. Prices are determined by these sellers that do not differ but there advertising and other criteria may differ effectively. Decisions related to the output are determine as per the demand present in the market in relation to the products sell by them so output decision are made accordingly. Like automobile industry is oligopoly in market.
- Duopoly competition-It is the market situation where mostly two companies cover the whole or substantial part of the market. It is similar to monopoly but its pricing and other criteria differ. Apple and Amazon are the form of duopoly that dominant e-book market. Price is determined by them as per the situation of the market. Similarly output is determined by them by the demand present in the economy(Wako et.al, 2015).
3.2 Illustrate the way in which market forces shape organizational responses using a range of examples.
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).
3.3 Judge how the business and cultural environments shape the behaviour of a selected organization.
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-
- Technical- Technological advancement has resulted in the better working in terms of production and retailer. As all the workings are computerized like it has also opened a websites to deal with the customers in an effective manner.
- Political- UK government support the working of the company due to the employment provided by this company. Company works as per the guidelines of the government.
- Legal- All the laws and regulations are followed as the law stated in the country as each company has its own set of laws so it become important that all the laws are fully complied by the company in that region such as Primark does in the company in which it runs its operations.
- Environmental- Progress cannot be done by degrading the environment. So company has to run its operation by safeguarding the environment. Primark has initiated this by using paper bags instead of plastic bags in its working.
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).
4.1 Discuss the significance of international trade to UK business organizations.
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).
4.2 Analyze the impact of global factors on UK business organizations.
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.
- Political-Factors that affect may be international danger of terrorism,tariff rates chargedamong different countries in respect to the UK companies, stability present at the global level in respect to politics and the media freedom in presenting information all constituted to the factors that affect international trade.
- Economical- These factors may be economic crises that occur globally, cheap resources at the developing countries, increasing rate of outsourcing that has emerged in the economy and the policies made by the World Trade Bank as well as World Trade Organization.
- Social- The factors may be value of the family in different countries, immigration and migration rate has increased apart from that patterns of the family is also changing. All these factors affect the organization globally.
- Technological- Adapting the correct technology at the correct time affect the working of the organization, advancement of new technology as well as innovation associated with it. Apart from that technology at the global level has also increased.
- Ecological- All the environmental factors like increasing rate of pollution in the air and water. Apart from that global warming also affect the organization working. Company also has to initiate many ways to reduce the impact of pollution by the operation of business conducted by them. Organization has to made separate funds for the environmental factors that can safeguard the environment to the great extent.
- Legal- Legal globalization has also emerged as the important factors that are required to be taken into consideration by the organization. Various business law and regulations are made to protect the data at the global level; many amendments are made at health and safety law. Also there is cross cultural employment that has changed drastically that leads to work culture laws and regulations(Fernandez et.al, 2014).
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.
4.3 Evaluate the impact of policies of the European Union on UK business organizations.
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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