External Business Environment of UK Assignment

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External business environment
TABLE OF CONTENTSTABLE OF FIGURESINTRODUCTION................................................................................31.1 Discuss the structure and operation of UK economy.......................................................31.3 discuss income, wealth, employment and occupational distribution in relation to theprovision of business and services operations........................................................................3Importance of Hospitality industry to UK..............................................................................51.2 Analyze current government economic policy and its effect of business and serviceindustry...................................................................................................................................61.3 Income, wealth, employment and occupational distribution in relation to the provisionof business and services operations........................................................................................71.4 Demographic trends that influence employment patterns in Hospitality Industry...........91.5 Social structures of people employed in IHG................................................................10Length of the services of the people -....................................................................112.1 The structure, operation and influence of local government on IHG hotels..................122.2 Role and influence of the EU, and its impact on Service Industry................................132.3 Role of pressure groups and their political influence in relation to national and localissues....................................................................................................................................132.4 Legal framework within the UK, identifying the main differences between the Englishand Scottish systems.............................................................................................................142.5 UK and EU Legislative process as it affects business of IHG Hotels............................153.1 Different types and characteristics of business that operate within the HospitalitySector....................................................................................................................................173.2 Legal processes necessary for formation and dissolution of a registered company.......183.3 Structure and processes which determine the responsibilities and control within aregistered company...............................................................................................................20CONCLUSION.......................................................................................................................21REFERENCES........................................................................................................................22
TABLE OF FIGURESINTRODUCTIONBusiness organizations have to operate in a particular environment such as internaland external environment. External environment refers to the environment that directlyinfluences the company and the factors are uncontrollable. The report aims to discuss theexternal environment of UK hospitality industry. IHG is a famous hotel chain that has beenselected for the study. The influence of local government and legal framework of UK on IHGhotels has been extracted.1.1 Discuss the structure and operation of UK economyFor the period of the BritishEmpire UKs economy was one of the largest and themost influential in the world as it was the first country to introduce industrial revolution interms of advance technology. Country’s economic system was badly affected due to first andSecond World War, but having a globalization scenario UK has earned its image back inrespect of economic performance. According to a current survey, UK is the 6th largesteconomy in the world and stands 8thin terms of GDP (Li and Zhou, 2005). Although, it is apart of European Union but it has maintained its single market image while believing in freemovement of human, financial and materialistic resources. The economy follows the rule ofexchange of goods, services and capital in all areas. It has maintained 20thplace in terms oflabor force which includes 31.9 million productive workers. Service industry has contributeda large part in UK GDP growth. 1.4% labor force is associated with agriculture work, 18.2%are in industries and rest 80.4% are employed in service sector (Big Hospitality, 2014). Beinga price taker market and huge number of companies, the economy has a perfect competitionmarket. The country earns mostly from export, as it is rich in natural resources.1.3 discuss income, wealth, employment and occupational distribution in relation to theprovision of business andservices operationsMost of business in UK is grouped into two sectors such as public and private.Private sector is set by the individuals, corporate entrepreneur and the persons who areseeking for conducting profit making activities. On the other hand public sector consists ofthe organization owned by local and central bodies. These organizations provide the servicewith the help of public corporations. There are five convenient sectors in UK economy whichare explained below:Primary sector:This sector included the activities that are directly linked withnatural resources such as farming, mining and oil extraction.3
Secondary sector:The activities related to production of goods in the economy comeunder this sector. Manufacturing is the top most activity and it also includes some of publicsector such as gas, water and electricity industry.The tertiary sector– Tertiary sector includes the entire service come under privatesector. For example: distribution of goods and services, insurance, banking and finance.Inspite of, industries of public sector services such as health and defence also considered astertiary sector services.The goods sector–This sector includes all the services of primary and secondarysector organizations.The production industries:All the unit of secondary sector excluding coal and cokeconstruction industries and oil, mineral and natural gases comes under this sector.Figure1Structure of UK Economy(Source:Tourism Alliance, 2014)4
Figure2Turnover of UK economy(Source:Tourism Alliance, 2014)Importance of Hospitality industry to UK(Source: Oxford Economics, 2010)Hospitality industry of UK is considered as one of the most growing industry in termsof generating revenues and employment. However, according to the British Hospitality5Illustration1: UK Hospitality sector economic contribution
Association (BHA), UK's hospitality and tourism industries will create more than 30000 newjobs opportunities of the young people by 2015. In this, 14832 are for permanent roles, 11103for apprenticeships and 5157 paid universities placements. Therefore, in regards toemployment current condition of UK Hospitality sector is relatively fruitful for both freshersand experience personnel.(Source:Oxford Economics, 2010)1.2 Analyze current government economic policy and its effect of business and serviceindustryIHG Intercontinental is the biggest UK based hotel group having the largest chain.The organization is operating in 100+ countries having 4400+ hotels with almost six lakh fivethousands rooms and the annual turnover of the company is 130 million. Operating inhospitality industry, the hotel corporation is affected by various policies designed by UKgovernment. Change in interest rates, tax rates and currency exchange rates affect thebusiness operation of IHG. Due to modifications in interest rates, corporate entities have tochange their strategies. In case of high interest rates people will spend less on leisure serviceson the other hand having low interest rate more tourists will be attracted towards hospitalityservices and company will earn huge revenues (Davies, 2000). A single change in fiscalpolicy leads to change in tax rates with will impact both in negative as well as positivemanner for services industry groups such as IHG. If it earns high profits it has to pay higher6Illustration2: Direct Hospitality employment contribution
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