BM461 Global Business Environment Coursework 2

This report discusses the global business environment and the sectors that will prosper or struggle in the next 12 months. It also covers legal structures and measuring competition in the market. The report includes a table of contents, introduction, main body with two tasks, and a conclusion with references. The subject is BM461 Global Business Environment Coursework 2.

Global Business Environment

Table of Contents
INTRODUCTION.....................................................................................................................................3
MAIN BODY...........................................................................................................................................3
TASK 1: Business sectors will prosper over the next 12 months and which will struggle..................3
TASK 2: Email writing.........................................................................................................................4
a) Pros and cons of legal structure................................................................................................4
b) Measuring the competition in the market.................................................................................6
CONCLUSION.........................................................................................................................................7
REFERENCES..........................................................................................................................................8

INTRODUCTION
Global business environment can be defined as the surrounding of various countries
which affect the working of the business. There are two types of global environment which
iis external and internal factors. External factors refer to those forces in which business has
no control over it and affect indirectly to the working. Internal factors are those business
forces which directly affect the company and the organisation has control over it. External
factors include political, social, legal, technological, economic factors. These forces are need
to be analysed properly so that uncertainty can be avoided and business can perform in
effective and efficient manner (Hamilton and Webster, 2018).
MAIN BODY
TASK 1: Business sectors will prosper over the next 12 months and which will struggle
BUSINESS SECTOR WHICH WILL PROSPER
 E Retail sector: Retail sector will be prospering over the 12 month because they are the
organisation which provides daily need groceries to the consumer. So with the hit of
pandemic there working does not stop as they provide day to day products to the buyers.
Tesco, Wal-Mart, Morrison are some of the company which will see a boost in their market
sector, due to shifting their working through making online delivery. So this sector will see a
positive and cheerful growth in the upcoming month. In one of the report published by IBIS
says that in 2021 the revenue generated by the sector is $189.9 Billion. It is also predicted
that in the next 12 month there will be rise in their revenue by 1.7 % and the revenue will
reach to $ 207.1 billion (Kokodey, Gnezdova and Lomachenko, 2018).
 Health care sector: This sector is all time a main part of ever country. In the recent time with
the hit of the pandemic Covid 19 this unit has gain more importance. The demand for mask,
sanitizers and the medicines has boom, in fact the diet and wellness item’s supply is also
enhanced. Company HCA will be flourish in the overcoming 12 month. Even service
provides in the healthcare sector that is yoga classes, medication all are done through
telecommunication. The current revenue of the sector is $ 55.9 billion. As the demand is
rising for the medicine so it is expected that the within 12 month the company revenue will
enhanced by 6.1% that is up to $ 62 billion (Nicola and et. al, 2020).

 Digital sector: Before the crisis sector has limited scope as the people feel to work in older
way. But when the pandemic rise the sector has gain more importance as all the people shift
towards digital platform. In the past i year more people uses digital platform for various
purpose like work commitments, schooling, and entertainment. This sector will see an
unpredictable growth within the 12 month. The company Infosys will see a commendable
share in the upcoming year. The company is gaining more market share day by day
(Tashanova and et. al, 2020).
BUSINESS SECTOR WHICH WILL SUFFER
 Tourism sector: In the past 2 year this sector has suffer a lot due to Covid 19. The market
share of the company is not rising as well as the revenue generation of the company was low.
Company like Hays travels, British airways and TUI group will be suffer a lot in the
overcoming 12 month because the virus does not stop and many countries has put ban on the
foreign tourist. In the earlier year the revenue generated by them is 237,6 billion but in the
present the revenue generated is only 89.6 billion and this will also take time for the sector to
raise their level within the 12 months (Standing, 2021).
 Hospitality sector: When the pandemic hit the company many resorts and hotel shut down.
Hospitality industry suffers a lot as all the activities are closed. This sector still suffer because
the revenue generated by them is still low and it need time for the sector to flourish again.
Many companies like Ritz hotel, Marriot will still suffer in the upcoming 12 month and then
will generate higher revenues (Schell, 2021).
TASK 2: Email writing
Hey James,
a) Pros and cons of legal structure
To start any business the first step is to decide what type of legal structure the enterprise
will have. There are three type of legal structure that is sole proprietorship, partnership and
the company. Each has different legal and tax obligation and the type of business structure
depends upon the goals and objectives. Let’s discuss the pros and cons of each structure
(Ivanovic and et. al, 2019).
 Sole trader: The person who runs the business alone and is liable to pay the personal
income tax for the amount earned by running the business. There is different entity of
the enterprise.

Advantages and disadvantages of sole traders are:
Advantages Disadvantages
Easy to set this business Unlimited liability
No need to register the business Raising capital from banks are difficult
Tax return of the business are paid as
personal income tax.
No tax benefits are given
Complete control on the business Lack of continuity
Owner personal assets are liable to pay tax. Limited management skills
 Partnership: This type of legal structure is form when there are two or more than two
partners in the business who decided to run the business (Sony, 2020).
Pros and cons of this legal structure are:
Pros Cons
More capital acquisition Unlimited liability
Tax benefits as profit get share so tax will
be paid less
Profits are shared
Loss are divided Need to sign an agreement
Quick decision making No transparency
 Company: It is a legal entity which is formed by the group of people.
Advantages Disadvantages
Limited liability Lack of security
Perpetual Existence Profits distributed are taxable
More professional and management skills
and knowledge
Lack of personal interest by the individuals
Risk are reduced Need to have legal entity
From the above case of being the mobile import who can run the business by their own and
the control power is in the hand of them, the best legal structure that will be good from them

is being a Sole proprietorship. This will be best for them as there is no other person in this
and can also save them to pay the extra tax as their personal income that will be earn will be
used to pay the tax of the business (Slaats, Debois and Back, 2021).
b) Measuring the competition in the market
Market structure: It is the term which is used to define your business with the other
business entity within the same industry. The businesses are differentiated on the basis of the
degree, nature, size and the competition rising on the market for the goods and services.
According to the given situation of the mobile importer the market structure can be measured
using the five force porter’s model. According to porters there are five factors which can be
used by the business to measures the competition in the market of the given business
industry. These factors can be used so that they can determine on how attractiveness they are.
 Bargaining power of suppliers: Suppliers are those person who provide the raw
material to the business. The company are affected by the number of providers
prevailing in the market. In the above case of Mobile if there is few supplier in the
Taiwan and china who provide cheap mobile phone then the bargaining power of the
suppliers will be high as enterprise need to depend upon them and if the suppliers is
high then bargaining power will be less because the companies has more option to
buy the material at cheaper cost and they can easily switch from one supplier to
another (Wellner and Lakotta, 2020).
 Bargaining power of the buyer: The ability of the buyer to negotiate the price also
one of the major way through which market condition can be get. If there is small
number of buyer who will purchase cheaper phones then they have more power to
bargain, but if larger number of consumer are available then the bargaining power is
low as companies has large audience in the market.
 Threats of new entrance: The Company’s power to gain more market is also depend
upon the new entrance. As the mobile industry require more capital to invest so the
threats of new entrants in such case is low and the person who is in the market has
good market share (Juliana and Nyoman, 2019).
 Threats of substitute: Substitute products are those goods and service which can be
used in place of another. In the above situation the threats of substitute is high as the
smart phones can easily be replaced from tablets (Isabelle and et. al, 2020).

 Competence among the rivalry: The number of competitor in the market and their
market growth plays a significant role to analyse the market structure. The larger the
competitor the less the power of the company. In this case the company has lower
number of competition as they are importing their product to China and Taiwan
(Rahman, 2019).
CONCLUSION
From the above report it is been concluded that global surrounding of the business
effect the working of the company. This report is divided into two task in which first task is
all about the sector which will rise in the upcoming 12 month and the units which will suffer
due to the impact of Covid 19. The second tasks talks about the various legal structure and
their advantages and disadvantages and what all are the factor which is need to be considers
to measure the market structure of the company.

REFERENCES
Books and journals
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global
business environment based on polycyclic theory. In The International Science and
Technology Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Nicola, M., and et. al, 2020. The socio-economic implications of the coronavirus pandemic
(COVID-19): A review. International journal of surgery, 78, pp.185-193.
Tashanova, D. and et. al, 2020. Investment opportunities and strategies in an era of
Coronavirus pandemic. Available at SSRN 3567445.
Standing, G., 2021. The corruption of capitalism: Why rentiers thrive and work does not pay.
Biteback Publishing.
Schell, J.M., 2021. Private equity funds: Business structure and operations. Law Journal
Press.
Ivanovic, K.K., and et. al, 2019. To the question of science approach to the construction of
outsourcing business model of modern enterprise structure. Достижения науки и
образования, (7 (48)).
Sony, M., 2020. Pros and cons of implementing Industry 4.0 for the organizations: a review
and synthesis of evidence. Production & Manufacturing Research, 8(1), pp.244-272.
Slaats, T., Debois, S. and Back, C.O., 2021, September. Weighing the Pros and Cons: Process
Discovery with Negative Examples. In International Conference on Business
Process Management (pp. 47-64). Springer, Cham.
Wellner, S. and Lakotta, J., 2020. Porter's Five Forces in the German railway
industry. Journal of Rail Transport Planning & Management, 14, p.100181.
Juliana, J.P.E. and Nyoman, Y.N., 2019. Factors influencing competitiveness of small and
medium industry of Bali: Porter’s five forces analysis. Russian Journal of
Agricultural and Socio-Economic Sciences, 89(5).
Isabelle, D., and et. al, 2020. Is Porter's Five Forces Framework Still Relevant? A study of
the capital/labour intensity continuum via mining and IT industries. Technology
Innovation Management Review, 10(6).
Rahman, M.S., 2019. An Analysis of Smart-Phone Industry in Bangladesh Using Porter’s
Five Forces Model. Open Access Library Journal, 6(09), p.1.
Online
United Nations, 2020. Sectors and businesses facing COVID-19: emergency and reactivation.
Online available at <
https://repositorio.cepal.org/bitstream/handle/11362/45736/5/S2000437_en.pdf>.

Sardoddi Sai Ashish, 2021. The sectors which will boom post covid era. Online available at <
https://timesofindia.indiatimes.com/readersblog/the-macro-musing/the-sectors-
which-will-boom-post-covid-era-32443 >