UK Business Sectors: Will They Prosper or Struggle?

This article discusses the current market conditions and consumer attitude towards major purchases in the UK. It provides insights into which business sectors are likely to prosper in the coming months and which ones will struggle. The article also offers expert advice on legal structures for new businesses and analysis of market structures and Porter's model. The subject of the article is the global business environment and the course code is BM461. The article is relevant to students studying business and management courses in universities and colleges.

Global Business
Environment

Table of Contents
Coursework (a)................................................................................................................................1
Coursework (b)................................................................................................................................2
REFERENCES................................................................................................................................5

Coursework (a)
UK BUSINESS SECTORS: WILL THEY PROSPER OR STRUGGLE?
The current market conditions are acting as catalysts for growth for some business
sectors, while barriers for others. As per the survey conducted by ONS, it has been found that 83
per cent of the respondents displayed moderate or high confidence in the survival of their
business. Further, as per the Industrial trends survey carried out by CBI on monthly and quarterly
basis, it has been found that in December 2021, majority of the manufacturers were of the view
that the output will witness a rise over the next three months following which it would fall.
However, it can be seen that there was a decrease in the number of manufacturers with the above
view from the month of November to December (Brien, 2022).
Another data which is worth looking upon is related to the consumer attitude as depicted
by the GfK Consumer Confidence Survey. This index decreased by one point from -14 in
November to -15 in December 2021 in UK. This indicates that the inclination of consumers to
make major purchases has declined. The reason behind this could be the emergence of omicron
variant. Also, consumers have concerns about the high costs of living as well as the rising
interest rates (Dube, Nhamo and Chikodzi, 2021). While the general economic situation of the
country showing a better status, the expectations of the consumers in UK regarding the economic
situation in the coming 12 months have decreased. The major purchase index decreased it is still
16 points higher in 2021 than it was in December 2020 (Pre-Christmas Consumer Confidence
falls one point to -15 in UK, 2021).
From this it can be analysed that consumers are not inclined to make major purchases in
electrical and furniture goods. They are likely to spend on essential goods and services and be
inclined towards saving their remaining income (Khlystova, Kalyuzhnova and Belitski, 2022).
This provides information about the consumer spending patterns that have changed post
pandemic and after the emergence of the new variants of Covid.
The sectors such as healthcare, retail, food and agriculture are likely to prosper over the
next few months as the consumers are to spend on these rather than on luxury products and
services. Sectors such as transportation and logistics will also prosper in the coming months
owing to their critical importance in the smooth running of other businesses as well as in the
lives of the common people while they are travelling (Nayak and et.al., 2021). Communication
and information technology are other sectors that might flourish during the current and the
coming months as these are inevitable for both, the common man as well as the business and
industries. In order to work in an appropriate manner, the business organizations are always ion
need of string information and communication technology. Also, these sectors have not been
much affected by the Covid pandemic and its variants, owing to their flexible nature, which has
further added to their likeliness to succeed. Research is another sector that will prosper in the
coming months owing to the vast scope for exploration that Covid has created. Being an ever
changing and unexplored topic, Covid 19 and its variants have provided numerous opportunities
to conduct research and explore more about the virus and the various aspects associated with it.
Manufacturing and production service is another sector that will see growth in the
coming months. Considering the life cycle model, it can be analysed that insurance sector will be
prospering in the coming months as the insurers have adapted to the post pandemic growth. The
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demand for the insurance is expected to rise all over the world in the coming months (Shaw,
2021). Considering the demand and supply factors as well, there will be major demand of the
goods and services which come under the essential category. The demand for Luxury goods and
services is likely to remand low in the coming months due to the uncertainty revolving around
the virus and its on – going mutations. Therefore, it will be suitable to invest it these sectors as
they are expected to flourish in the coming months and can provide better returns to the investors
(Mofijur and et.al., 2021). Considering the new variants of Covid being invented with time and
the mutations of the virus, it is likely that the speeding patterns of the consumers will be inclined
towards essential goods to a longer time rather than on making major purchases. Therefore, it
will be suitable to invest in retail organization such as Tesco and insurance firms such as Aviva
International. Agility is the logistics firm that is suitable for investing in the coming months.
Coursework (b)
Hello,
Greetings for the day!
Regarding the advice related to the new business and its options, the following
information can be useful. The various legal structures that can be adopted are sole
proprietorship, partnerships, limited liability companies, C corporations and S corporations etc.
sole proprietorship is the most common business structure which provides the advantage of being
easiest to set up as there is no requirement to file any papers. Also, the taxes are imposed on the
profits only once on the personal tax returns of the owner. In addition to this, the owner has
complete control over the business. However, there are unlimited liabilities to which the owner is
exposed in sole proprietorship. Also, difficulties may be experienced while borrowing money as
banks are reluctant and do not easily provide loans to the sole proprietor businesses.
Partnership is another legal structure in which a business can have more than one owner.
While the partnerships are easy to form they also provide the advantage of bringing different
talents to the business. Responsibilities can be shared among the partners, which assist in smooth
running of the business. But, this structure also exposes the partners to unlimited liabilities.
Further, there are situations in which the owner may not agree on a particular decision which
may lead to conflicts.
Limited Liability Companies (LLC) constitute a structure in which there is limited
liability of the owner. Also, there are no judgments made on the personal assets of the owner.
The choice of paying the business taxes also lies with the owner. The LLC also does not need the
presence of a board of directors. However, the legal and accounting costs of LLC are higher as
compared to those of proprietorship. Also the owners are required to create an operating
agreement and provide description regarding the limits to making decisions.
The business idea is to import cheap mobile phones and sell them to emerging
economies. This business idea would require expertise and knowledge in a number of areas.
There will be need to explore the market of the emerging economy and also the rules and
regulations of the country from where the phones are to be imported. Marketing and promotion
skills will also be needed in addition to the entrepreneurial skills. Considering the above
structure, and the business idea, partnership would be most suitable as it would provide a pool of
talent and expertise of more than one person. Also, the business involves import of phones, the
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partnership would help in division of responsibilities among the partners and smooth running of
the business.
There will be the need to analyse the competitiveness of the market structures. The
market structures can be competitive but this is not the situation always. Majority of the market
structures come under the category of imperfect competition where the standards for perfect
competition are not fulfilled. There are various structures under this such as oligopoly,
monopolistic competition, monopoly etc. Oligopoly is a market structure where only few firms
that operate together control the major part of the market share but they can neither be the price
makers nor takers. Monopolistic competition is characterized by the presence of a number of
sellers who sell closely related products. Monopoly market has a single seller of a product or
service. As the business idea would be to sell mobile phones, oligopoly market structure will be
involved where in order to avoid price war, the seller need to follow price rigidity. Also, in order
to compete with other firms, the aspects of quality and efficiency need to be focused on.
Before entering the mobile phone market, it will be vital to understand the forces as given
in the Porter’s model. The mobile phone industry suffers from a threat of new entrant as not
much capital will be required to import phones from other countries and sell them. However, the
threat of substitute products is low as mobile phones have special features and providing
upgraded versions of the phones would help in dealing with the threat of substitutes. Moreover,
the bargaining power of customers would be high in this industry as they have a number of
options available. In addition to this, the bargaining power of suppliers would be moderate as
there may be fewer numbers of suppliers of mobile phones available who sell them at cheap
prices. The threat of competitive rivalry would be high as there will be a number of competitors
selling mobile phones and snatching the existing as well as potential customers. Therefore, there
will be need to adopt suitable strategies of attracting the customers and gaining their loyalty.
Looking forward to your response,
Thanks and regards,
xyz
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REFERENCES
Journals and Books
Dube, K., Nhamo, G. and Chikodzi, D., 2021. COVID-19 cripples global restaurant and
hospitality industry. Current Issues in Tourism. 24(11). pp.1487-1490.
Khlystova, O., Kalyuzhnova, Y. and Belitski, M., 2022. The impact of the COVID-19 pandemic
on the creative industries: A literature review and future research agenda. Journal of
Business Research. 139. pp.1192-1210.
Mofijur, M. and et.al., 2021. Impact of COVID-19 on the social, economic, environmental and
energy domains: Lessons learnt from a global pandemic. Sustainable production and
consumption. 26. pp.343-359.
Nayak, J. and et.al., 2021. An impact study of COVID‐19 on six different industries:
Automobile, energy and power, agriculture, education, travel and tourism and consumer
electronics. Expert systems.
Online
Brien, P., 2022. Business and Consumer Confidence: Key Economic Indicators. [Online].
Available Through:
<https://commonslibrary.parliament.uk/research-briefings/sn02817/>. [Accessed on 19
January, 2022].
Pre-Christmas Consumer Confidence falls one point to -15 in UK. 2021. [Online]. Available
Through: <https://www.gfk.com/en-gb/press/Pre-Christmas-consumer-confidence-falls-
one-point-in-December-in-UK>. [Accessed on 19 January, 2022].
Shaw, G., 2021. 2022 insurance industry outlook. [Online]. Available Through:
<https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-
industry-outlooks/insurance-industry-outlook.html>. [Accessed on 19 January, 2022].
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