Impact of COVID-19 on Business Sectors and Future Prospects

This article discusses the impact of COVID-19 on various business sectors such as tourism, real estate, and auto components. It also provides insights into the future prospects of IT, securities, and FMCG sectors. Additionally, it offers legal advice and guidance on legal structures and measures for competitiveness of marketing structure for starting your own business. The article also covers the market structures and Porter's 5 forces model for measuring the attractiveness of the industry.

Global Business Environment

Table of Contents
2 (a) Newspaper article.........................................................................................................................2
2 (b) E-mail............................................................................................................................................3
REFERENCES:.........................................................................................................................................5

2 (a) Newspaper article
Consumer confidence refers to the economic indicator which is used for measurement of degree of
chances that the consumers feel for overall state of economy as well as their own financial situation.
When consumers have high confidence, they make higher purchases, and when the confidence is low,
purchases are low and consumers saves (Macready and et.al., 2020).
Before the start of the year, the sustainability of economic growth was expected. However, as the
starting of the year COVID virus element Omicron spread, business and economies have starting to
get affected. There are various business sectors in which investors have to invest carefully. Some
business sectors will struggle to survive and grow in next 12 months. Some of these sectors are
Tourism, real estates as well as auto component sectors. There are various supply and demand factors
which affect the business sectors. As due to Corona virus re-emission the sector which will get
affected majorly is Tourism. Countries and economies have to emphasis and rethink about pandemic
situation and some might some think to lockdown states again. This is affect the demand of
consumers as their preferences from travel to staying at home will shift. They will prefer to stay at
home than to go out. Due to decrease in demand, supply will get affected and tourism will drop. As
UK have put certain conditions before travel such as taking a pre departure test before travelling,
people are scared to go out (Lašáková, Remišová and Bohinská, 2022). This also affect the airline
sector and companies such as British Airlines.
There are various chances of uncertainty, so the real estate business will also suffer. The
supply is enhanced, but demand is less due to these factors the real-estate business is likely to suffer.
People are ready to sell their property as due to pandemic consumers have been left with low
disposable incomes. This affect their demand. The hospitality sector is also more likely to suffer
again. Hotel industry is mostly dependent upon the tourism and if tourism drops, the demand in hostel
industry will also drop. Due to drop in demand of tourists and travellers the restaurants and
entertainment industry will also suffer losses.
At the end of year 2021, the Sensex and nifty rates have finally up, but the risk have not yet
fully eliminated. As the COVID-19 variant Omicron have spread the chances of pandemic returning
have also increased. Due to the pandemic many businesses have suffered. But at the same time,
various sectors such as IT sectors, securities and FMCG (Fast moving consumable goods) are
expected to bloom (Uparna and Bingham, 2022). Due to pandemic and COVID-19 protocol, the
chances of lockdown enhances and if the states are lock down condition, they still have to follow
COVID-19 protocols which includes maintaining social distancing. Due to these factors the demand
for IT will enhance, as the world will thrive on digital technologies for their businesses ad daily life as
well. So, the companies such as Hyperlink InfoSystems and iTechArt group will prosper. The demand
for technologies will enhanced which will give a prospective impact on supply and the sector will
bloom. Another sector which is expected to bloom is FMCG sector. Due to re-spreading to COVID-
19, the population will panic and thus will start buying necessary goods in bulk. The demand for
FMCG will not decline throughout the pandemic. It is the sector which will not be shut down even in
COVID.
The other sectors which will bloom in the next 12 months are securities. As people are
panicking due to the uncertainty, they will look for options where their investments are safe. Investing
in securities will become a great option rather than the stock market. As the investment in securities
can be done from anywhere through digital resources, the demand for securities will increase. People
will see this as their best option for investments (Kraus and et.al., 2022).
As a result of the pandemic there are some sectors in which amateur investors can invest in. if
you look at the data from FTSE Index UK, of 2019 – 2020, it can be seen that it have performed way
below its average value in the initial starting of the year 2020. From the data of London Stock
Exchange the best companies to invest in include Unilever Plc., Royal Dutch Shell Plc., and

Astrazenca Plc. The best option is Unilever Plc., as even in lockdown, demands for FMCG never
decreased, which makes it a better option to be invested in.
Figure 1 London stock Exchange
Biggest companies listed on London Stock Exchange 2021, 2022
2 (b) E-mail
Good morning,
Hope you are having a great day. This email is in response to your initial e-mail regarding legal
advice and guidance on legal structures and measure for competitiveness of marketing structure for
starting of own business.
The information on different legal structures is as follows:
The best structures for starting a business is sole trading or partnership. Sole trader is the simplest, yet
the easiest form to start up a business. To start the sole trading, you need to register the business with
HMRC (Her Majesty’s Revenue service) (Kurpayanidi, 2018). Whereas for partnership, more than
one person needs to be involved in business and be a partner for sharing or profits and losses. In sole
trading all the business is done by yourself and start working. While in partnership, all the partners
have the responsibility to run the business.
The major benefit of sole trader is that, they do not have to share any profits with anyone. While it
provides the limitation that they have to invest everything on their own as well as bear all the losses.
In partnership profits are shared, but so are the investment as well as losses. A sole trader is
responsible for all the liabilities. It means in case of bankruptcy, their own assets can sold to repay
debts. However, partnership can be limited and unlimited as chosen by partners. Limited liability
means the partners do not have to sell their own assets to repay debts. However, all the partners are

liable to the mistakes or misconducts of one partner.
The best form of legal structure for your business is sole trader (Schell, 2021). As a sole trader, you
do not have to share your profits with anyone and in sole trader profits can be unlimited. Another
major benefit is that the tax payment will be much lower than any other business structure. In sole
trade the earning of an owner are considered as the personal income of the owner. This makes the tax
impositions much lower than other forms of business. Even though the risks are higher in sole trade,
but the profits are also high. The decision making is also quicker as you do not have to consider others
in decision making process if you do not want to. Another reason to consider this structure is that
there is no specific government acts or statue which are applicable in sole trading and incorporation is
also not required.
In order to start business, understanding of various market structures is also very important (Slávik,
2019). The market structures describe how distinct industries are differentiated and classified on the
basis of their nature and degree of competition. There are four types of market structures. The perfect
competition is market structure in which there are a number of seller and a number of byers, in
monopoly market, there are few seller but have large number of buyers. In monopolistic completion
there are same product but with some different features serving a number of buyers, while oligopoly
market have small number of larger companies which serve differentiated products. Your business
idea will follows the monopolistic market structure.
In order to enter the industry, the Porter’s 5 forces model can be used for measuring its attractiveness
(Bruijl, 2018). For opening a business of selling mobile phones to rural investors, the threat of new
entries is high as there are no barriers to enter the industry as well as the customers are mostly brand
loyal. There are few government policies but at the same switching costs of consumers are also low.
The bargaining power of consumers is high as there are a number of seller as well they are brand
loyal. The product differentiation is also very low and buyers can easily buy substitute products. The
threat of substitutes are also very high. Due to the number of similar products available in the market
and the consumer’s propensity to substitute, risk is higher. The bargaining power of suppliers is high
in the industry. Even though there are a number of supplier, but the number of customer is very wide.
The uniqueness is not much but the abilities of local companies for substitute is less. The major threat
is rivalry among the companies among industries. There are a number of competitors which intensity
the competition.
Apart from the above considerations, the HMRC Import duties also needs to be taken into account.
There are various custom duties imposed on imports which needs to be understood before
commencing business (Irfan and et.al., 2019). If you are importing goods less than £ 135, if above you
need to pay 2.5% import duties.
Thanks and regards
Name

REFERENCES:
Books and journals:
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing business
environment. Available at SSRN 3192207.
Irfan, M. and et.al., 2019. Competitive assessment of Indian wind power industry: A five forces
model. Journal of Renewable and Sustainable Energy. 11(6). p.063301.
Kraus, S. and et.al., 2022. Digital transformation in business and management research: An overview
of the current status quo. International Journal of Information Management. 63. p.102466.
Kurpayanidi, K.I., 2018. Questions of classification of institutional conditions, determining the
structure of business management in Uzbekistan. ISJ Theoretical & Applied Science. 9(65).
p.1.
Lašáková, A., Remišová, A. and Bohinská, A., 2022. Barriers to ethical business in Slovakia: an
exploratory study based on insights of top representatives of business and employer
organisations. European Journal of International Management. 17(1). pp.86-113.
Macready, A.L. and et.al., 2020. Consumer trust in the food value chain and its impact on consumer
confidence: A model for assessing consumer trust and evidence from a 5-country study in
Europe. Food Policy. 92. p.101880.
Schell, J.M., 2021. Private equity funds: Business structure and operations. Law Journal Press.
Slávik, Š., 2019. The Business model of start-up—Structure and consequences. Administrative
Sciences. 9(3). p.69.
Uparna, J. and Bingham, C., 2022. Breaking “Bad”: Negativity’s benefit for entrepreneurial
funding. Journal of Business Research. 139. pp.1353-1365.
Online references:
Biggest companies listed on London Stock Exchange 2021. 2022. [Online]. Available from:
<https://www.statista.com/statistics/1013810/largest-companies-on-the-london-stock-
exchange/>. [Accessed on 13 January 2022]