External Business Environment : Assignment
Added on 2020-01-21
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External Business Environment
TABLE OF CONTENTSIntroduction.................................................................................................................................................3Task 1..........................................................................................................................................................31.1: discuss the structure and operation of the UK economy (size, features, philosophy, regulation,taxation, security, efficiency, direction)..................................................................................................31.2: Analyze current government economic policy and its effect on business and services industries(focusing on a major UK hotel group).....................................................................................................81.3: Discuss income, wealth, employment and occupational distribution in relation to the provision ofbusiness and services operations...........................................................................................................101.4: Assess the demographic trends that influence the employment patterns in the hospitality industry...............................................................................................................................................................121.5: Analyze the social structures of people employed in a major UK hotel group...............................14Task 2........................................................................................................................................................152.1: Discuss the structure, operations and influence of local government on a major UK hotel group..152.2: Evaluate the role and influence of the EU, and its impact on business and services industries.....172.3: Assess the role of pressure groups and their political influence in relation to national and localissues in regards to hospitality industry.................................................................................................182.4: Analyze the legal framework within the UK, identifying the main differences between the Englishand Scottish systems..............................................................................................................................192.5: Evaluate the UK and EU legislative process as it affects a major UK hotel group’s business andservices at both local and national level................................................................................................20Task 3........................................................................................................................................................213.1: Assess the different types and characteristics of business that operate within the business andservices with a focus on the hospitality sector.......................................................................................213.2: Discuss the legal processes necessary for formation and dissolution of a registered company.......223.3: Analyze the structure and processes which determine the responsibilities and control within aregistered company...............................................................................................................................22Conclusion.................................................................................................................................................23Reference...................................................................................................................................................23
INTRODUCTIONMacro economy and macro-economic factors are the external exogenous variables of abusiness. Because government policies, inflation, unemployment rate and etc. are monitored todetermine the business condition. In this report income, wealth, social structure, demographictrend, company formation and liquidation and other issues regarding the hospitality industry arediscussed. TASK 11.1: Discuss the structure and operation of the UK economy (size, features, philosophy, regulation, taxation, security, efficiency, direction)As the history says, UK was the largest and the strongest economy in the world, duringthe time of British Empire. It was also in the front line of technological advancement in 18th to19th century. However, going through WWI and WWII, the UK economy had lost most of itsglories. But as a matter of fact, UK economy is revitalizing itself again. From the statisticalreports (BBC News, 2016) it is divulged that at present UK ranks the 8th largest economy in theworld as of 2012- on the GDP scale (current prices). And this economy stands at 8th largest inglobal scale according to GDP (private public partnership). Moreover, UK is also an influentialmember in the G8, the European Union (EU) and the OCED (Organization for EconomicCooperation and Development).Figure 1: GDP (current price) ranking in 2012 (BBC News, 2016)
In 2008 and 2010 the UK economy had faced economic crises along with the globaleconomy; however, they were able to reconstruct themselves.Figure 2: Projection of GDP and GDP growth in 2030 (BBC News, 2016)From the above figure, it can be seen that in 2015, UK economy was able to raise itself inthe 7th position. However, the overall GDP growth prospect is quite waning in comparison withthe economies of US or China (Cobham, 2011).From the view point of features of UK economy, it can be divided between public sectorand private sector. Private sectors are those forms that are owned and managed by entrepreneurs-by themselves or managed by institutional. Alternatively, firms those are owned by state orgovernment are public sectors, where an ever person has an insurable interest on that. Thedivisions of sectors are as follows-
Figure 3: Structure of UK economy (Cobham, 2011)A close investigation of UK economy reveals that UK economy is mostly dependent onpetroleum oil (crude & refined), Diamond, Cars and others. According to the report of (),globally UK has the 32nd largest proven oil reserve and 44th largest proven natural gas reserve,however, due to limited supply, UK is an import oriented economy in case of oil, natural gas andetc. Figure 4: UK market Map (Demodirt.com, 2015)
Figure 5: Industry in UK economy (Demodirt.com, 2015)However, in last decade or so, the focus or philosophy of UK economy has shiftedtoward service industries from agriculture, contributing a 77.2 percentage of the national GDP.Moreover, the agricultural sector is losing efficient manpower for this sector’s survival.The taxation practice of UK requires payments to at least two different levels ofgovernment offices- the central government (Her Majesty's Revenue and Customs), devolved
national governments and local government. The sources of fund for local government are grantsfrom central, council tax, business rate and charges from community services. On the other handcentral government earns its revenues from income tax, national insurance contribution, VAT,corporate tax and fuel duty (Dol.gov, 2016).Overall, UK economy is moving away from its agro focus to service focus, empoweringon capital incentive assets- knowledge, service, skills and etc.Hospitality sector of UK is the fifth largest industry in nation and employs more than 3million people on direct and indirect basis. It has the annual contribution more than £100 billionin its economy. The key characteristics of UK economic structure are mixed market economy,floating exchange rate, strong pound sterling, low taxation in relation to other economies, lowcorporation tax as well as openness to high level of immigration. There are many kinds of market structures like perfect competition, monopoly,monopolistic, oligopoly and mixed market economy (Kewand Stredwick, 2005). Marketstructure is the collection of factors that determine the way in which buyers and sellers dotransactions with each other. These structures can be explained like:Perfect competition – It is the market where there are many buyers and sellers that offerthe similar products. Entry and exit barriers are not so high in this market structure aswell as prices are determined by the demand and supply. For example, chocolates.Monopoly – Here, only one seller is there which are the only producer and seller of aproduct or service. There are high entry barriers which make it difficult for the newentrants to enter in the market (Kryzanowski, 2006). Prices get influenced by the abilityof seller only. Example: medicines.Monopolistic – In this market structure, firms have many competitors but everyorganization sells a slightly different product. Also, there are only few entry and exitbarriers. For example, restaurants.Oligopoly – It states the market where there are only few firms that make an industry, forexample, hospitality sector. In this, almost identical products are there. Firms in oligopolymarket highly depend on branding for gaining competitive advantage.
Mixed economy - It reflects the degree to which regulations are there in the marketthrough government and private organizations (Lihitkar, 2013). UK is having the mixedmarket economy which there is the high control of government and private firms. 1.2: Analyze current government economic policy and its effect on business and services industries (focusing on a major UK hotel group)According to Monaghan, (2014), for any country, to know how its government spendsand maintains costs structure for ensuring optimum benefit for its people, is very important.Government ensures benefits through investing in infrastructure development and serviceenhancement. As we know that the national income is a function of four factors, GovernmentSpending is one of them.Thus any government policy has direct impact on business sector. Government policiesare divided into two, namely-Figure 6: Government policies (Gov.uk, 2016)
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