BM461: Analyzing Consumer Confidence and Legal Structures for Business

This report provides an analysis of consumer confidence in the UK, identifying business sectors likely to prosper or struggle in the next 12 months. It suggests investment opportunities for amateur investors based on the analysis, considering factors like FTSE performance and consumer spending. The report also discusses different legal structures for businesses, recommending sole proprietorship as the best option during the pandemic due to its simplicity and low cost. Furthermore, it evaluates market structures like monopolistic and oligopoly, describing market structure competitiveness using models like Porter's Five Forces and the Herfindahl-Hirschman Index. The report concludes by highlighting key considerations for starting a sole proprietorship, including location and finance.

BM461 Global Business
Environment

Contents
MAIN BODY........................................................................................................................................3
2a)......................................................................................................................................................3
2b).....................................................................................................................................................4
CONCLUSION.....................................................................................................................................6
REFERENCES......................................................................................................................................7

MAIN BODY
2a)
Consumer confidence refers to the economic indicator which uses to measure the degree of
optimism that the consumer used to feel about in the overall state of the economy and their personal
financial situation (Juhro and Iyke, 2020). It important in business because it’s used to determine the
willingness of the consumers in order to spend, borrow and save (US CONSUMER CONFIDENCE,
2022).
Business sector will struggle
As the pandemic has affected the overall globe and make the lock-down sin the countries
which make the business sector to struggle in the market. After the research it as seen that the small
and medium enterprises has affected and will struggle the more in the next 12 months. This is because
of the happening of the pandemic in all over the globe (Sunarsi and Baharuddin, 2019). The small and
medium sectors includes the retails firms also as it has also faced the loss and will struggle in the
coming next 12 months. The architectural services, quantity surveying and engineering sector has and
will struggle in the coming 12 months. As due to the happening of the COVID the people are only
focusing on satisfying the needs rather than building the house for them. For example, Travis Perkins
who is the largest architect in the UK has cancelled all its dividends for this year as he knows the
pandemic will affect his organization and its work. From the below graph we can conclude that the
people in the UK were getting the low jobs in the Building works which causes decrease in the
architect work and make the sector struggle in the coming months and the graph is also moving
downwards only (Hamdani, Abdul and Maulani, 2018).
Business sector will prosper
The business sector prospers means that which type of business sector will grow in the
coming years and months. The business sector which is growing in the present days may be prosper in

the coming years. As the happening of the pandemic has affected the many business sectors but there
was the one business that has profit lot that is the medical and healthcare sector ( Cómbita Mora,
2020). Both the public and private healthcare in UK has acquired lot of revenue and will prosper in
the next 12 months. From the below graph it can be seen that the skipped of the bar in the year 2020.
This shows that media sector will be earning more as the pandemic is not gone yet. With the help of
the new pattern, analytics and statistics the sector will grow more in the United Kingdom. For
example, NHS which is the largest employer in the UK and it use to employ more than 1.5 billion
people. The organization used to spend more on the healthcare sectors and also enjoys the more
revenues in the coming 12 months (Begenau, 2020).
Suggestion for an amateur investor
The investor can invest in the high-yielding savings account because it is the easiest and
simplest way in order to earn return on the invested money. This can be applied by using the Business
cycle model that makes the person to start-up, grow, maturity and rebirth in the market. By
understanding this all the phases the organization or investor has to rebirth in the market on order to
earn more profit in the market. This cycle will also help the organization to the strategic planning and
have the good operations of the business organizations.

2b)
Purpose of email
The purpose of the email is to make my friend to know about the different legal structure and make
him know that which will be the best legal structure in order to start the business at the going of the
pandemic time.
Legal structure
Sole trader: In this type of legal structure there is only the single person who use to own and runs the
business as an individual. The sole trader is personally liable for the debts and and the personal assets
as risk cannot be shared with anyone (Kasahun, 2020). He is the only person who use to enjoy the
overall profit of the business and make himself capable of managing the activities by his own. There
are some pros and cons of sole trader are:
Pros: Easy to establish, easy to operate the business, unlimited liability, no compliances, etc.
Cons: Personal liability, no one to share the ideas, lack of business continuity, etc.
Partnership: in the partnership there is the formal agreement between the two or more partners in
order to manage and operate the activities of the business and share the profits. All the partners in the
partnership used to share the profits and liabilities equally or in the decided profit sharing ratio. There
are some pros and cons of partnership:
Pros: less regulations are required, sharing the burden, ownership are combined, etc.
Cons: slow in making decisions, profits have to be shared, large taxation policies, etc.
Best legal structure
The legal structure is also called as the business structure which use to determine that which
type of taxation the person has to pay, return has to file and the risk exposure of the entity. From the
above the best legal structure is sole proprietorship in which there is only single person who use to
manage the overall activities of the business. Having the sole proprietorship use to save the tax of the
person from the profits. There are some advantages in order to choose this legal structure in order to
start the business. It is very simple ad having the flexible structure to start this type of business (Gavin
and et.al., 2018). This business is very inexpensive as can be opened in the COVID or in the
pandemic time also. As long as the person is the owner he is only in charge of doing its operations in
the business and less capital is required in order to set up this legal structure. There will be necessary
license will be provided by the government if operations are related to the alcohol or in any other
business.
Market structure
Market structure refers that how the different businesses are differentiated on the basis of
competition nod degree in order to provide the goods and services (Dhingra and Morrow, 2019).
Different types of market structure are as follows:
Market structure Entry and exit of seller Nature of the product
Monopolistic There is no entry and exit of
seller.
It used to sell closely related
products.
Monopoly There is entry of the seller. It used to sell the differentiated
products.
Oligopoly In this there is entry of the seller
in the market.
It used to sell homogeneous and
differentiated products.
The person can use the monopolistic market structure as in this it can sell the closely related products
as well as differentiated products in the market and make to earns more profits in the business.

Measuring the competitiveness of the market structure
The competitive market is the market where there are many producers and sellers who used to
compete with each other with the goods and services in the market. There are several factors by which
the competitiveness can be compared that are quality of the finished goods, timely delivery, stock
levy, productivity of staff, efficiency of equipment’s, floor space utilization (Acosta and et.al., 2019).
The market competitiveness can be measured by HHI that is Herfindal-Hirschman Index- which is the
main object in order to measure competitiveness. The market structure can also be measured by using
the porters five forces model which includes the threats of the substitutes, threat of the new entrants in
the market, competition in the industry, power of suppliers and power of customers. There forces used
to make the company to know about its competitors and the new entrants in the market which makes
them to compete with them in the positive way. This helps the business to increases its profits but also
makes the business to know and monitor about the changes and make the good business strategy in
order to survive in the market. In order to maintain the competition in the market the company can use
the better resources in order to generate the high profits and revenues.
Other considerations
It includes the location of setting up the business, finance required in the business,
competition, etc. In order to start the sole proprietorship the person must have the good location in
order to make his business profitable.
CONCLUSION
This report has concluded the types of legal structure and it has suggested the best legal
structure in order to start the business in the happening of the pandemic that is COVID. Further it has
evaluated the market structure that is monopolistic and oligopoly and at last this report describes the
market structure competitiveness and the other considerations.

REFERENCES
Books and journal
Kasahun, A. K., 2020. The Impact of Working Capital Management on Firms’ Profitability-
Case of Selected Sole Proprietorship Manufacturing Firms in Adama City. IOSR
Journal of Economics and Finance (IOSR-JEF). 11(1). pp.45-55.
Gavin, M.C. and et.al., 2018. Effective biodiversity conservation requires dynamic,
pluralistic, partnership-based approaches. Sustainability. 10(6). p.1846.
Acosta, A and et.al., 2019. Combining market structure and econometric methods for
pricetransmission analysis. Food Security. 11(4). pp.941-951.
Dhingra, S. and Morrow, J., 2019. Monopolistic competition and optimum product diversity
under firm heterogeneity. Journal of Political Economy. 127(1). pp.196-232.
Juhro, S. M. and Iyke, B. N., 2020. Consumer confidence and consumption expenditure in
Indonesia. Economic Modelling. 89. pp.367-377.
Sunarsi, D. and Baharuddin, A., 2019. The Effect of Service Quality and Price Accuracy on
Consumer Confidence and Implications for Sales Increase. PINISI Discretion
Review. 3(2). pp.101-110.
Hamdani, N. A., Abdul, G. and Maulani, F., 2018. The influence of E-WOM on purchase
intentions in local culinary business sector. International Journal of Engineering &
Technology. 7(2.29). pp.246-250.
Cómbita Mora, G., 2020. Structural change and financial fragility in the Colombian business
sector: A post Keynesian approach. Cuadernos de Economía. 39(SPE80).pp.567-
594.
Begenau, J., 2020. Capital requirements, risk choice, and liquidity provision in a business-cycle
model. Journal of Financial Economics. 136(2). pp.355-378.
Online
US CONSUMER CONFIDENCE. 2022. [Online ]. Available through. < https://www.conference-
board.org/topics/consumer-confidence >