Business Economics Report: Competition and Market Analysis in the UK

This business economics report provides a comprehensive analysis of the UK market, focusing on market structure and competition within the context of London-based businesses. It begins with an executive summary and introduction to the UK's economic background, including its historical role a...Read More

Business Economics

Table of Contents
Executive Summary: .......................................................................................................................3
INTRODUCTION ..........................................................................................................................3
Background and related details regarding chosen country.........................................................4
Q.1. Discuss the matter based on economic context?.................................................................4
The problem that were chosen in this report are competition and market based structure...........4
Q.2. Provide facts & figures after doing research in the form of charts or tables that justify the
argument?....................................................................................................................................5
Q.3. Describe chosen topic and provide a critical analysis on how that topics affects or could
affect the business success in the country. Also discuss how your findings agree or disagree
with other research findings........................................................................................................5
Role of Government plays in advancing business success in London in respect of competition
and market share.........................................................................................................................7
CONCLUSION ....................................................................................................................8
REFERENCES................................................................................................................................9

Executive Summary:
Business economics includes various factors that effects the economy as well as business
both in favourable and unfavourable manner. The organisation that was selected in this report
was UK houses that has headquarters in London. The problems based on economic conditions
are based on competition, market structure. The role of government are also very crucial in
business expansion with regards to market structure and competition. For that purpose
government formulate and framed varies strategies with respect to competition. As government
reduces tax rates, providing subsidies, fix rate of GDP in London etc.
INTRODUCTION
Business economics is a field of applied economics in which we study about the
organisational, matters related to market, competition, regarding financials, laws & acts and at
last problems related to environment that mostly faced by enterprises. Business economics also
cover various factors that affects the corporation in positive as well as in negative manner. As
these factors are related to business strategies, organisation, expansion, management etc. by
applying economic theory a well as quantitative methods. On the other hand economics indicates
the study of functions & components that are exist in specific economy like demand and supply,
impact of scarcity etc.(Springham, 2020)

Background and related details regarding chosen country
The chosen country is United Kingdom. As their background can be defined in this
report. England, Wales, Northern Ireland, Scotland. The four cut a wide swath of territory across
eastern face of Europe instead of geographically apart from the rest of the continent also have
separation by the North & Irish Seas , the English channel and the straight of Dover. Historically
UK played leading role in developing as well as promoting parliamentary democracy and also
has advance on literature and science. In 19th century, the British Empire stretched around one
fourth of the surface of the Earth. The UK strength was depleted in 2 World war and the Irish
republic withdrawn from the union in first half of 20th century and in second half UK rebuilding
into prosperous and modern European nation. With the help of UN security council members ,
NATO members and also the common wealth, United Kingdom pursues a global approach to
foreign policy. Traditionally real estate considered as a most safe investment. But due to
recession and other disaster changes the theory as during this time it is very difficult to make
Investor in this industry and would be homeowners people think twice. House values increase
over time but recessions & disaster. Following slumps, home values raise in some areas of the
country due to strong demand but low supply, while other locations struggle to rebound. Low
mortgage rates have indirect impact on prices of house , as customer are willing to acquire more
debt if credit is cheap. Before 2007, historical data related to housing price seem to indicate that
prices of real estate rises continuously. It has some exemptions also. The average home sale price
climbed steadily every year from 1963 to 2007 when the housing bubble burst and the financial
crisis of 2008 ensued. Homes average sale price leads to make prices low for houses. As Due to
increase in the GDP rate , the purchasing power of audience leads to decline which make
negative impact on sales of buildings, villas, flats, bungalows. This housing industry plays a
most significant role in economy because it involves large and heavy amounts so due to rising
prices of buildings it affects negatively on economy. That indirectly effects growth and
development of the country. Due to rising prices Real estate company Savill loose their so many
customers because now people not invest in costly projects due to inflation in the market. So it
tends to decrease their sales which leads to increase the chances of business failure.

Q.1. Discuss the matter based on economic context?
The problem that were chosen in this report are competition and market
based structure.
Competition as exist when two or more persons and firms that deals in similar business
and strive towards common goals that cannot be shared which results as gain of one party is loss
to other. Competition involves rivalry among different entities like individual, organisms, social
as well as economic groups, etc.(Ferber, 2020)
There are so many type of market structures where firms can easily operate their business
. Structure types influences behaviour of the organisation, whether it depends on efficiency or
their profit generation level. The market structure are related to the no. of firms that are exist in
the competitive area of market, regarding their shares of market and other features that effects
competition level in market. The modern theory make focus on the behaviour, their
performance , the conducts of firms and con testability level that prevails in the market. A market
have uncompetitive structure, where small number of firms are competing, but firms behaviour
might be competitive highly in United Kingdom. Classification of structures are on the basis of
absence and presences of competition, in this manner concentration is done on the market. This
shows the spectrum to perfect competition towards monopoly (Smon, 2019)

Q.2. Provide facts & figures after doing research in the form of charts or tables that justify the
argument?
Q.3. Describe chosen topic and provide a critical analysis on how that topics affects or could
affect the business success in the country. Also discuss how your findings agree or
disagree with other research findings.
The topic that was selected is market structure and competition.
Market structure:
There are various types of market structure, few examples are describe as follows:
 Monopoly: It include only one firm that covers at least 25% share of market.
Features
1. Barrier to entry
2. Charges high prices as compare to competitive market
3. Economies of scale
 contestable market: in this market served by small no. of firms that are
characterized by competitive equilibria due to presence of potential short term
entrants.
Features
1. Freedom related to entry and exist

2. must posses low sunk cost
 Monopolistic competition: It is a type of imperfect competition in this large
producers competing but selling those products which are differentiated from each
other ( Mooney, 2020)
Features
1. Low entry barrier
2. differentiated product are produce by firm
3. Earn less profit as compare to monopoly
 Oligopoly: It includes the market where industry has small groups of large
number of sellers.
Features
1. Few large organisation dominate the market
2. Firms interdependence
3. Limited barriers to entry
Competition: It shows the rivalry between those organisations that are selling same
services and products with intension of achieving profit, revenues and growth relates to market
share(Doane, 2020)
Market structure and competition affect the business success of UK houses in the
country London. Oligopoly exist in retail industry in United Kingdom as there are few seller and
more buyer present in the market. So it makes positive impact on business because large number
of buyer tends to increase revenues on the other hand it reflect negative impact also because due
to less seller it raise the problems of supply. Due to existence of competition brands try to
introduce or deals in more and more products by offering variety of items to their customers. In
this way it attract huge audience and capture large market area. Which increase the profit margin
of the organisation that leads to business growth and expansion (Goodstein, 2020)
The other research findings are unemployment and inflation.
Agree: As due to increase in competition in the market, seller sale their products at high
prises that tends to raise inflation rate and if purchasing power of buyer is low than they are
unable to purchase product at high cost. Which affects sales and revenues negatively and if
company not earn adequate profit than it increase the chance of business failure due to this firm

eliminate the employees that leads to raise unemployment. As unemployment indirectly effects
the whole economy.
Disagree: As due to competition , new firms enter in the market to introduce their
business in the world of competition. For that the firm need employees to work so it reduce the
chances of unemployment. Due to heavy competition seller charge nominal amount from buyers
so that they can survive in such type of market. So it reduce the chances of inflation.
Role of Government plays in advancing business success in London in respect of competition
and market share.
The Government act as a market maker as they introduce competitive pressure between
purchasers & seller. If market mechanism that can be designed well by Government than it can
raise benefits of consumer choice , in this way it can increase the efficiency. Roles of
Government as supervisor & designer in place of regulator and provider. The government officer
also play a role of policy maker. Well designed market processes can avoid the restriction on
competition regarding more traditional command & control approaches. Government also plays
role as supervision, market design, incentives and enforcement in regards to those goods &
services that provide efficiently at the time of achieving the same objectives related to policy.
Competition can be introduces through competition for market. Where supplier compete for a
contract to deliver goods & services and the best option is chosen by the government that gives
best value for money. Another role is to increase the awareness and improves the quality of
education regarding market. Government also formulate tax policies that gives deduction,
subsidy and other benefits to the firms as well as to individuals also that leads to business
expansion and growth. There are three common mechanism due to which government can
intervene as a market maker as these are users choices, tradable permits and competitive trading.
Such policies are framed by government that less harm is provide to society that can be achieved
by setting market for the purpose of tradable permits (Gupta, 2020)

CONCLUSION
After deep study and analysis it is conclude that Government influence behaviour of
customers and action of firm indirectly. As it is observe that consumer behaviour plays an
important role in determining the level and degree of competition in some specific market.
Government can make attention on demand side by influencing consumer behaviour in different
ways such as through tax policies, regulations. Government also use educational programmes
and advertising campaigns to high light the cost along with behaviour. Thus In this way
Government can plays an important role in market making by raising consumer's participation in
competitive market.

REFERENCES
Books and Journals
Springham, D.G., Moses, V. and Cape, R.E. eds., 2020. Biotechnology-the Science and the Business.
CRC press.
Simon, J.L., 2019. The economics of population growth. Princeton university press.
Doane, D.P., Seward, L.E. and Chowdhury, S., 2020. Applied Statistics in Business and Economics| |
SIE. McGraw-Hill Education.
Goodstein, E.S. and Polasky, S., 2020. Economics and the Environment. John Wiley & Sons.
Gupta, S.C., 2019. Business statistics. Himalaya.
Tribe, J., 2020. The economics of recreation, leisure and tourism. Routledge.
Mooney, G. and Scotton, R., 2020. Economics and Australian health policy. Routledge.
Ferber, M.A. and Nelson, J.A. eds., 2020. Feminist economics today: Beyond economic man. University
of Chicago Press.