business environment..pdf

Business Environment Individual Assignment

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Acknowledgement.

First of all I would like to give my gratitude to lecturer of Mr. Hirumal sir in ICBT Sothern Campus because he is always giving me the guidance to complete this

assignment. Sometime he motivated and encourage me to make this report a good one.

Furthermore I would like to thank Mr. Shanuka sir, Mr. Deloosha sir and Miss. Himasha

because they are also coming behind me always and give guidance to do this assignment

Finally I am grateful for my parents, brothers and my dear friends for give me the support

during this tusk.


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Executive Summary.

Under this assignment, it clearly focused on different types of public and private organization

including a leading company of Primark in UK. Used this leading company as an example,

researcher clearly mentioned how economic system and its characteristic, economic factors and

international trade affected to the UK business to establish successful business within the

European contest.

In additionally, this project has also followed types of markets such as emerging market within

the European contest and also has mentioned how to effected emerging market to the UK

business analyzing the barriers and opportunities.

Finally, researcher has revealed current situation of the European Union and how it effect on the

UK business to set up Primarks operators when engaging in other countries market.


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Table Of Content.

Acknowledgement. ....................................................................................................................... IX

Executive summary. ....................................................................................................................... X

Entroduction. ................................................................................................................................... 1

Location of the companies. ............................................................................................................. 2

Task 1 .............................................................................................................................................. 3

TASK 1.1 PRIVATE AND PUBLIC ORGANIZATION. ........................................................................ 3

1.1.1-sole traders ..................................................................................................................... 4

1.1.2-partnership. .................................................................................................................... 5

1.1.3-private limited and public quoted company. .................................................................. 6

TASK 1.2- ORGANIZATION STAKEHOLDERS AND THEIR RESPONSIBILITIES. .................................... 7

1.2.1- staff members or employees. ......................................................................................... 8

1.2.2- managers. ...................................................................................................................... 8

1.2.3- suppliers. ....................................................................................................................... 8

1.2.4- customers ....................................................................................................................... 8

1.2.5- government. ................................................................................................................... 9

TASK 1.3- PURPOSE OF THE SELECTED ORGANIZATION. .............................................................. 10

Task 2 ............................................................................................................................................ 11

TASK 2.1- ECONOMIC SYSTEMS AND CHARACTERISTIC. .............................................................. 11

2.1.1- open economy. ............................................................................................................. 12

2.1.2- closed economy ........................................................................................................... 12

2.1.3- command economy. ..................................................................................................... 13

2.1.4- mixed economy ............................................................................................................ 13

TASK 2.2- FISCAL AND MONETARY POLICY. ................................................................................ 14

TASK 2.3- HOW AFFECT FISCAL AND MONETARY POLICY TO THE PRIMARK COMPANY. ............... 15

Task 4 ............................................................................................................................................ 16

TASK 4.1- PROS AND CONS OF THE PRIMARK COMPANY DUE TO INTERNATIONAL TRADE. ........... 16

4.1.1- advantages. .................................................................................................................. 16


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4.1.2- disadvantages. ............................................................................................................. 17

TASK 4.2- WHAT IS AN EMERGING MARKET................................................................................. 18

4.2.1- opportunities of the market. ........................................................................................ 19

TASK 4.3- EUROPEAN UNION AND HOW IT EFFECT UK BUSINESSES. ............................................. 20

Conclusion. ................................................................................................................................... 21

Recommendation. ......................................................................................................................... 22

References. .................................................................................................................................... 23


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List of Figures

Figure No 1: Location of the companies....2

Figure No 2. Business Organization Chart3

Figure No 3: Company Stakeholder7

Figure No 4: Economic system process.11

Figure No: 5- Emerging markets map...18


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Introduction.

Under this assignment the researcher has chosen Primark Textile Company in UK which is

widely established keeping up with the latest designing without breaking its growth and

company offer different products such as clothes, home ware, accessories, beauty products and

confectionery for all babies, kids, women and men.

Primark opened its first shop in 1969 in Dublin with the name of Penneys. But, today company

expanded in nine countries in Europe with 270 stores and they are going to open the first US

store in Boston in 2015. Under the below chart company growth can be identified clearly.

Year Open stores.

1969 First store open at Dublin in Ireland and there have 38

Store present time.

1973 In Derby first store opened and now 35 stores located there

2006 With the first store open in Spain and now 35 stores have

There.

2008 First store open in Netherland where 35 store have in the

Present time.

2009 In Germany, some store opened.

2009 Belgium also opened their shops.

2012 Open the first store in Austria.

2013 open the first store in France.

2014 Newly two stores opened in Paris.


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Location of the companies.

Head Office.

Other stores.

Figure No 1: Location of the companies.

Source: Google Map, (2014)


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Task 1

Task 1.1 Private and Public Organization.

Any business organization or modal scope and surrounding has expanded from simplicity to

complicity by dint of the competition. Under the peter ducker (2009), European countries are

looking very serious structures when those countries are trying to occupy in business. Below the

example it gives clear indicate for how organization are satisfied regarding their business

organization.

EX- ASDA Company where Mother Company is whole market established in US and ASDA is

registered in the United Kingdom as a large public company.

Accordingly, different types of private and public organization exist in the market which can

identify below the chart.

Business Organization.

Private Sector Public sector

Sole traders Gov. Departments

Partnership Gov. Corporation

Clubs and society Gov. Companies.

Figure No 2. Business Organization Chart.


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1.1.1-Sole traders

When considering about this sector where organization maintains from a sole owner ship who

can be one person or an individual has main responsibility to control all activities within the

organization. If Asian contest compare with UK contest it is clearly indicate that the number of

sole traders registered and the ability to avoid legal influence. With this situation sole proprietors

business are very famous within Asian contest with number of advantages. Those are,

1) Ability to start the business from a small capital.

2) Ability to enjoy the profits.

3) Ability to take quick decisions.

4) Less legal influence.

5) Registration is not compulsory.

6) Accounting, auditing are not compulsory.

7) Business can be closed down at any moment as the wish of the owner.

But this modal has number of disadvantages also. Those are,

1) Inadequacy of capital.

2) Inability to take correct decisions.

3) Inability to further develop the business.

4) Less ability to grow the company in quick manner.

5) Need to damage losses or to overcome losses in a individual manner or by himself.


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1.1.2-Partnership.

In this sector which is also vary famous within the Asian contest and very close to sole traders

because of the less legal attraction. But, differences of the partnership is that the organization has

ability to contain employee between tow to twenty so that it is help to collected more capital to

generate the business in better way. In addition these organizations have a agreement where

some information need to mention clearly. Those are,

1) Name of the partnership.

2) Objective of the partnership.

3) Nature of the partnership.

4) Main place of the business.

5) Manner of dissolution of partnership.

6) Method of distribution of profits.

However partnership modal also have number of disadvantages more than the advantages.

Therefore this modal is also an abandoned modal in the business environment.

Disadvantages

1) Disagreement among partners, their bankruptcy or physical disability

2) Inability to implement decisions

3) Auditing and accounting are not compulsory

4) Absence of legal personality.

Advantages

1) Ability to expand the business

2) Possibility of collection of larger capital

3) Implementing better decisions.


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1.1.3-Private Limited and Public quoted company.

These both businesses represent in Europe and Asian contest majority because those modal have

a very strong legal bond in case of bad situation. In addition, strong financial strength, decision

making process and development strategy are correctly occurred through a board of members.

When considering about private limited companies which have number of advantages such as

ability to stand as a person in front of the law, which is the main advantage very help for those

organization to identify as a most successful business modal in the market. Therefore, those

companies like to go long way within the market.

As the market mention about public organization where majority of companies are owned by the

government who takes decision itself considering about social welfare rather than profit, without

identify employees motivation and customers satisfaction, which are the main issues in this

modal.

Thorough this above scenario, today business modal are focusing on big legal bond which play

major role in the market due to the huge expansion and competition, to success the business.


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Task 1.2- Organization stakeholders and their responsibilities.

Stakeholders are group of people who have an interest in a business organization (Porter, 2011).

Stakeholders contribute hugely for any organization to prosper and to go long way in the market.

In this way, Primark Company which is recognized company has been following a business for

over four decades in the European market. So, the Primark has number of stakeholders who can

be identified below the chart.

Stakeholders

Internal external

Managers Customers

Staff members or employees Government

Suppliers

Trade unions

Communities.

Figure No 3: Company Stakeholder


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1.2.1- Staff members or employees.

When considering about Primark company staff members ,their main duties are to become

effective and efficient in the activities. So, nosiness need to good staff to carry out its activities in

good manner. In the past, company was humiliated from customers due to the lack of employees.

But, today 70000 of employees are working across the globe. This example clearly indicate how

employees important for the any organization.

1.2.2- Managers.

When looking at the managers of the Primark company where managers have main

responsibilities to make sure all activities in organization run smoothly and they mainly focus

customers value and employee motivation. Within the organization, there have key managers to

control their companies. They are,

Arthur Ryan (Chairman)

Paul Marchant (Chief Officer)

John Lyttle (Chief Operating Officer)

Ben (Seles Director)

Breege (HR Director)

1.2.3- Suppliers.

Suppliers duties are supply goods with cheaper cost to the company. Therefore company shall

gain the ability to become cost leader and to create competitive age within the market.

1.2.4- Customers

In customers side, they have a responsibility to inform the organization weakness for the

company because; in this way company can find out those weaknesses in right way.


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1.2.5- Government.

In this sector which is very important for the organization satisfies because of the government

taxes and other charges. Today Primark satisfies about their tax charges. Accordingly,

government responsibilities are that the tax release and other facilities give for the company to

become successful within the textile industry.

When considering above scenario it is clear that stakeholders represent an organization and their

influence more important for the Primark company to successful through engaging satisfying

stakeholders in the future.


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Task 1.3- Purpose of the selected organization.

In 2008, BBC published a program to examine poor working condition in Indian factories which

ware supplying good for Primark in that time period. With this situation company has diversified

itself stopped doing business with the Indian suppliers and Primark created a specific website to

deal with issues around the program. Accordingly, they logistic their textile and retailing fast

moving consumer goods in to the market.

In this way, company aim is that they make their employees, supplies and local and wider

communities part of their success by working with them in every way.

When looking at the purpose at Primark, they have focused a clear vision and mission and

objectives also, which are delighted their customers in a good manner.

Company mission.

When analyzing their mission statement which say to provide fashionable clothing, with a

unique, fresh and innovative style, whilst maintaining high quality products at affordable price

This statement clearly says that company is always focusing in customers side and not follows a

price war.

Company Vision.

When considering company vision statement which say as an international brand with a global

supply chain we have a responsibility to act ethically

The above situation clearly indicates mission, vision, aims and the objectives are very helped to

the company to sustain in the long run.


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Task 2

Task 2.1- Economic systems and characteristic.

Economic systems which are very important for any country, clearly exhibit the path way to

develop and monitor geographical and demographical elements within the community. When

considering about economic system process it can be clearly indicated below the chart.

Figure No 4: Economic system process.

Source: Anon, (2006)


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Under this process, economic system can be categorized into various items where it can

categories primarily tow section which are,

1) Open economy,

2) Closed economy.

And other systems can be identified as,

1) Command system,

2) Mixed system.

2.1.1- Open economy.

An open economy allows its business and individuals to trade with other countries economy

business and individuals with various product and services where consumer satisfaction is a key

element and economy offer for consumers a grater variety of goods and services, produced at

home and abroad. This system involves itself in the following activities.

It buys shares, goods, bonds ect, form other countries and sell shares, goods, bonds to

others countries.

It helps to borrows something form foreign countries and lends to foreign countries.

It helps for residents of an open economy to move or work in other countries economics.

2.1.2- closed economy.

Closed economy which does not have a any sort with other countries economic relation but it

restricts to itself only. This system mainly focuses consumers services where main idea is to

control foreign exchange within the economy. Therefore, this involves itself in the following

activities.

Close economy not export goods and services to the foreign countries and not import

goods and services from the foreign countries.

It not helps to borrows form foreign countries and lends to foreign countries.


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When analyzing the characteristics of the above systems government involvement is less because

private companies dominate the market.

2.1.3- command economy system.

This system where the government rather than the free market determines what product should

be produce, how many product need to produce, with the commanded prices and for whom to

produce these product. Here most of the resources are owned by the government and this is key

feature for any communist society. China, Cuba and North Korea are examples for this system.

2.1.4- Mixed economy system.

This system contains characteristics of capitalism and socialism and system also allows levels of

private economic freedom but also allows for government to influence in economic activities.

This system main aim is socialism more efficient than capitalism.

Through the above economic system which clearly gives an idea about how business and

economy remain, established towards with satisfied life style of stakeholders within the society.


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Task 2.2- Fiscal and Monetary Policy.

Fiscal and Monetary policy clearly mentioned that the strategies which are very crucial to

maintain the business are been adopted with country economy in order to get strength. Through

the strong monetary system which is enable to show or highlight the any countrys economy as a

dominant economy within the world.

With the strong monetary policy it helps to control economic recession. Not only that, it helps to

control interest rate which can create an effect on whether the business are suitable to start or not

under the country economy situation. But, under the poor monetary policy declining of export

might be also the negative area within the economy. This situation is not suitable for any country

to maintain their economy.

When considering about strong fiscal policies which are also very important to business or

economy to flourish. In this way, all country which can increase suitable business, foreign

exchanges within imports, shall create also a strong and sustainable economic environment

within each of their countries.

Under above information, it is clear that fiscal and monetary policies are more important for the

develop countrys economy.


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Task 2.3- How affect fiscal and monetary policy to the Primark Company.

When considering about the Primark Company which established in different countries and

newly Primark is going to establish new store in US, which is the first time that they establish

store in US, has to consider its external environment where economic policy can be created

threat and opportunities for the company.

With this situation if the US government decides to increase taxes and to create barriers to entry

in to their market it shall become a huge threat to the Primark to start its new store in US. In

addition, US taxes, life styles and good prices are very high so that Primark has to consider about

those elements before the start its store in US.

Other thing, if the US government decide to give tax release as well as accommodation facility it

shall also very help to open opportunities for the Primark to increase their market shares and

develop its business within the US region.

Through above informations which are clearly mentioned fiscal and monetary policy mainly

effect to the Primark Company to develop its business within the world.


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Task 4

Task 4.1- Pros and Cons of the Primark Company due to International Trade.

Primark Company is going to start a new store in US recently. With this plan the company has to

face various positive and negative aspects. When UK market compare with the US market it has

a huge gap under the macro environment influence. In consequence of this macro environment

influence Primark Company has number of advantages form US market.

4.1.1- Advantages.

Technological Aspects.

In this way company can easily implement its system within the US market because US market

technological side is more advanced than the UK technological side. There for Primark can

easily implement its store within short time and it is more help to expand its business within the

US.

Social and cultural.

This one also will create one advantage for the company because they can very smoothly

promote their advertising methods within US market. When considering about the US peoples

behavior patterns, social pattern and culture are very similar to the UK peoples. But, if both of

countries peoples behavior patterns compare with srilankan social and culture pattern, it has

huge difference. So, under the company new plan US social and culture will create a advantage

for the Primark company.

Strong supply changes.

When the company open in the US market, company can supply its service with less cost during

the introduction period through adopting the porter value chain which is created a competitive

edge within the new market, can gain the ability to enhance customer values and the brand

equity.


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Specially, Primark will face to hard situation when they enter into the US market. Therefore,

company has to take action to overcome this hard situation and face to the difficult challenges.

Primark has number of challenges from macro environment.

4.1.2- Disadvantages.

Political challenge.

This factor can be created a threat to begin the operation for Primark Company due to the strong

political system of US. Sometime this will be a barrier to overcome their stability.

Economic challenges.

In this sector Primark has to consider about US taxes which can be affected their selling prices

due to the exchange process. In addition inflation level also can be influenced to their business.

Industry Rivalry.

The main disadvantages is that the company shall face to the huge completion within US market

due to the company capital and brand equity because US has number of famous competitors.


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Task 4.2- What is an emerging market.

Emerging market is a new market structure originating form globalization, open standards and

deregulation which are changing the balance of economic power form the sellers to the buyers

(Business Dictionary, 2014).In this way current trend is that African countries and south Asian

countries identified as emerging market. Accordingly, Brazil, China, India, Mexico and Turkey

are the main emerging markets which are characterized by a young population and a growing

middle class.

Figure No: 5- Emerging markets map.

Source: Cavusgil, Gary & John, (2007)


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4.2.1- Opportunities of the market.

1) One of main opportunity is that the organizations have ability to become successful when

organizations are investing in emerging market.

2) Other one is, when organizations are investing in emerging market it help for

organization with tax releases, political supports and worm welcome.

3) Organization can get technical impact, skills and competency also.

4) Significantly organization can reduce their decision risk.

5) It is help to create a new opportunities from future scenario.

6) Market prefers centralized communication system, corruption and bureaucracy.

With these opportunities or benefits sometime emerging market business havent their upmost

performance because of the mismanage economy, which is the main barriers for the business can

convert into strength of the business. Through this above scenario it is clearly mentioned what is

the important of emerging market for the business.


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Task 4.3- European Union and how it effect UK businesses.

Economic policies mainly affect European countries or EU, which is clearly mention that the

current European countries face to the various issues under the economic policies.

When consider about those economic policies,

Managing, improving and invention in the road network.

Improving high streets and town centers,

Boosting private sector employment,

Help to the tourism industry to grow,

Creating new tax system, which are the current economic policies within the EU.

Those policies and previous policies also created a huge effect to the UK business in various

patterns.

With the fall in the value of the pound European manufacturing sector has hugely affected

recently. Accordingly, mobile industry and government industry declined during the last five

years due to the lowest value of the pound. This clearly mentions that previous economy policies

created a negative impact for the business. Other thing, banking industry also faced to the huge

loses. Accordingly UKs major banks such as Lioyds TSD and German Central bank remained in

a dire financial situation and need to build up their capital to protect themselves against another

financial crash.

On other hand, European still has number of things to do through continuing to create jobs and

grow the business. But, problem is that elderly population within the Europe work force

increased so that government always tries to create more educated workforce to grow the jobs

market. However, employment percentage has increased in UK and recently it has dropped

certain level.

Under above information EU has to develop their economy policies to grow the economy in

better way.


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Conclusion.

Under this assignment, it is clearly mention fiscal and monetary policies are very important to

become a successful any economy within the world. Accordingly, any organization needs to

consider market condition, economy policies and international policies in order to gain

successful manner in long run. Finally, researcher clearly mentioned about this situation adopting

the Primark Company in UK.


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Recommendation.

Primark Company has number of negative impact form the external market. So, researcher

recommended that those negative impacts and positive impacts are very help to the company so

that company has to use both things to analyses market condition and also the international

environment by using 7S modal.


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References.

Anon, (2006). Introduction to Management. Sri Lanka: Department Of Business Administration.

Business Dictionary,(2014), Emerging market.[online] Available

at [Accessed 4th

of July

2014]

Cavusgil, Gary and john,(2007), International business.1st edition[pdf] prentice hall. Available

at

[Accessed 16th

of July 2014]

Google Image,2013..Map of the company location.[online]Available at:<

https://www.google.com/maps/search/primark+store+in+uk/@55.3617609,-

3.4433238,5z/data=!3m1!4b1> [Accessed 15th of July 2014]

Primark,(2014),information of the company.[online] Available at<

http://www.primark.com/en/whats-new> [Accessed 26th

of June 2014]


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