Global Business Environment: Consumer Confidence and Starting a New Venture

This article discusses the impact of consumer confidence on the UK economy and provides guidance on starting a new venture importing low-cost mobile phones from developing countries. It also covers legal structures and investment opportunities in various sectors such as food, retail, and banking.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Coursework 2a........................................................................................................................1
Coursework 2b........................................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The global business environment refers to the business climate in many sovereign countries that
influences organisational decision-making. It includes a number of factors that a given economic
organisation may encounter. These forces determine the business environment as well as the
operations of the company (Shekshnia, Kravchenko and Williams, 2018). Two pieces of
coursework will be examined in this evaluation. In coursework (2a), consumer confidence data
from the United Kingdom will be examined, and an overall picture of a variety of businesses
from various industries will be presented. This will assist amateur investors in deciding whether
or not to invest in new companies. In coursework 2(b), a research project will be completed that
will provide an outline of how to start a business importing low-cost mobile phones from
developing countries and selling them in emerging markets.
MAIN BODY
Coursework 2a
According to Nelson, (2018), Consumer confidence in the United Kingdom is trending in
the right direction. Consumers are beginning to spend, which is encouraging for businesses.
Despite the fact that inflation has increased in the UK economy, customer enthusiasm for
spending has not waned. The GFK consumer index increased by three points, from 17 to 14. As a
result, product demand is gradually expanding, which is excellent news for suppliers in the
performing market. Furthermore, the FTSE is displaying an upward trend in its number on an
annual basis, indicating a healthy future industrial structure. Clothing, hospitality, safety
equipment, and wholesaling industries in the UK are growing and contributing to the UK GDP.
The income of online meal delivery platforms has risen in recent years and is expected to
continue to rise fast in the future. Consumers with limited time are entirely reliant on this
industry since it is extremely rapid, safe, and consistently delivers high-quality meals (Froese,
2019). Furthermore, because of the larger client base, a large number of retailers and restaurants
worked with such an online organisation. There has been an increase in the demand for food
outlets, which has a direct impact on the indicated sector. As a result, compounding growth is
allowed for future activities in the aforementioned business.
As a result of the epidemic, the aviation sector has been severely hampered. Due to the
complete halt of activities, the entire industry suffered significant losses. The sales of the
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companies were fast declining. The industry is expected to struggle for the next few years as a
result of large losses. Casual lockdowns, as well as the global economic slump, had an impact on
tourism. This has a direct impact on their revenue creation. As a result, the aforementioned sector
will struggle over the next 12 months.
Since the epidemic, the UK market has witnessed a significant drop, and enterprises are
now recovering from the effects of the pandemic, which is a promising indicator for deploying
investment in the UK economy. There are a number of firms that are doing well and could be a
smart investment. The following is a list of companies that potentially deliver a good long-term
CAGR on investment.
Food sector
 Deliveroo plc- 241.5 GBX
Overview 2018 2019 2020
Gross margin 15.85 20.64 26.97
Return on assets - -83.94 -43.39
Asset turnover - 2.04 2.28
Debt to asset ratio - 0.55 0.06
Because the food industry in the United Kingdom is quickly expanding. Customers spend
a significant portion of their income on food and dining establishments. In the near future, the
online food sector is expected to reach new heights. Following the pandemic, the population in
the United Kingdom returned to their regular work schedules. Food delivery applications are
used by a large portion of the population (Kordoš and Habánik, 2018). As a result, this is an
excellent time for both experienced and novice investors to participate in the developing food
business. As a result, Deliveroo plc has the largest market share in online customer delivery.
According to the preceding data, the company's shares are undervalued, which is a favourable
sign for future valuation.
Retail sector
 Tesco- 280.10 GBX
Overview 2018 2019 2020
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Valuation ratio(PE) 16.32 22.86 19.45
Return on assets 2.24 1.38 1.46
Asset turnover 1.12 1.09 1.18
Debt to asset ratio 0.31 0.33 0.34
Consumers are spending extensively on items, according to the customer confidence
index, indicating that the retail sector is operating again in the market. TESCO is also the largest
retailer in the UK, having the largest market share. The company is growing in preparation for
future endeavours. It is both trustworthy and safe to invest in (Stverkova and Pohludka, 2018).
The foregoing factors are in favour, and various technical indicators such as the exponential
moving average (EMA) and the simple moving average (SMA) are pointing to a favourable time
to buy the stock.
 Unilever- 3879 GBX
Overview 2018 2019 2020
Valuation ratio(PE) 13.27 23.07 23.2
Return on assets 15.11 9.12 8.59
Asset turnover 0.82 0.84 0.88
Debt to asset ratio 0.43 0.43 0.4
Another massive corporation that produces a variety of goods. It operates on a global
scale, making it one of the world's largest corporations. The company's return on assets is
fluctuating downward, but this is due to the epidemic. Overall, the financial sector is displaying
trustworthiness, which is a positive sign for investment. As a result, new investors can participate
in a SIP plan.
Health and household personal care
 Reckitt Benckiser group Plc- 6185 GBX
Overview 2018 2019 2020
Valuation ratio(PE) 19.64 25.23 39.18
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Return on assets 5.7 -7.98 3.58
Asset turnover 0.33 0.37 0.44
Debt to asset ratio 0.32 0.38 0.34
One of the fastest expanding industries in the UK, with a significant contribution to the country's
economy. Because it is the industry's leading organisation, the above-mentioned company is a
must-have for any investment. Its share does not fluctuate by a large amount, which is a positive
sign for long-term investment growth. The value of a company and the amount of income it
generates are both expanding at a rapid rate.
Banking sector
 Lloyds banking group- 46.48 GBX
Overview 2018 2019 2020
Valuation ratio(PE) 9.34 17.96 29.87
Return on assets 0.5 0.3 0.1
Asset turnover 0.03 0.06 0.04
Debt to asset ratio 0.19 0.19 0.18
In the United Kingdom, the banking sector is the primary generator of economic growth.
Inflation has caused interest rates to rise in the UK banking sector recently. As a result, the
financial sector will make decent money. As a result, Lloyds Bank has the capability, according
to the situation. Its return on investment (ROI) and valuation indicate that investing in company
stock is a safer option.
Coursework 2b
From: PQR
TO: XUV
Subject: Guidance to opt best practice for new venture.
Starting your own business is a fantastic idea. Digital technology is advancing at a breakneck
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pace, with enormous opportunity for organisations to expand through demand fulfilment. As a
result, importing low-cost mobile phones can assist you in generating revenue. Due to the fact
that there are a variety of legal and corporate entities that can have an impact on a business.
Importing mobile phones from China and Taiwan, for example, demonstrates entire reliance on
the supplier. As a result, they may readily influence prices. To deal with the situation, you'll
need supplier alternatives if you want to stay in business (Rezaee, 2018). The impact of HMRC
duty charges on the operation of the firm is another element to consider. It will be levied on
each lot, and the price of the product will be influenced as a result. As a result, an adaptive
supply chain management approach that focuses on adaptive solutions to concur the effects
through operations is required.
According to the research, the market in which your company intends to participate is
oligopolistic in character. As a result, configuring the best optimal technique that can succours
into an acquired number of consumers is a huge benefit. To beat out the competition, phones
should be innovative, feature-packed, and priced lower than the competition to develop a strong
brand image.
To carry out the aforementioned company operations, a favourable legal structure is required,
which will determine the entire future picture for corporate operations in terms of risk
management and profit sharing. i.e., sole proprietorship- the benefit of purchasing the aforesaid
entity is that the individual obtains all of the profit, and you have complete control over how
your firm is run (Ryu, 2019). On the other hand, there are also drawbacks, such as unlimited
responsibility. Any large losses in the future may jeopardise your personnel assets. The amount
of money that can be raised in this manner is limited.
The next legal structure is a partnership, which can be formed by two or more people in your
company. If you want to use this practise in your company, you should seek legal guidance
first. It will assist you in the creation of a formal agreement between partners. The advantages
are that it is simple to set up, with legal protection that avoids the danger of partners breaking
the agreement, and that profit is taxed only once (Głodowska and Pera, 2019). As a result, there
are some drawbacks, such as a split in decision-making, the impact of other partners' actions on
the entire organisation, and a lack of detail agreement that can lead to legal issues in the
business.
Partnership structure, in my opinion, will be excellent for doing business because it will provide
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you with an advantage of cash that can be used to successfully create a firm. Furthermore, the
liability will be distributed according to a predetermined deed, lowering your risk factor. The
complementary abilities of other partners will improve business practise and allow for the
adoption of numerous beneficial entities in the firm that will increase income.
CONCLUSION
Based on the preceding coursework, it can be concluded that the business climate is highly
dependent on economic issues. External forces, such as customer behaviour, influenced business
decisions. In the aforementioned assessment, it is claimed that consumer confidence in the
United Kingdom has improved, which is a positive indicator for the economy and industry
growth. The following assessment included extensive advice on numerous filtration areas that
could have an influence on business operations. Finally, a suitable legal structure was
recommended in comparison to other structures.
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REFERENCES
Books and Journals
Froese, F.J. ed., 2019. Doing business in Korea. Routledge.
Głodowska, A. and Pera, B., 2019. On the Relationship between Economic Integration, Business
Environment and Real Convergence: The Experience of the CEE
Countries. Economies. 7(2). p.54.
Kordoš, M. and Habánik, J., 2018. Corporate culture interplay issues in global
economy. Problems and Perspectives in Management. 16(3). pp.302-310.
Nelson, J.A., 2018. Here be paradox: How global business leaders navigate change. In Advances
in global leadership. Emerald Publishing Limited.
Rezaee, Z., 2018. Supply chain management and business sustainability synergy: A theoretical
and integrated perspective. Sustainability. 10(1). p.275.
Ryu, J.S., 2019. Consumer characteristics and shopping for fashion in the omni-channel retail
environment. The Journal of Business Economics and Environmental Studies.9(4). pp.15-
22.
Shekshnia, S., Kravchenko, K. and Williams, E., 2018. CEO school: Insights from 20 global
business leaders. Springer.
Stverkova, H. and Pohludka, M., 2018. Business organisational structures of global companies:
Use of the territorial model to ensure long-term growth. Social Sciences. 7(6). p.98.
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