Analysis of Business Operations: Sectors, Ownership, PEST & SWOT

This document analyzes the fundamental aspects of business operations, beginning with a clear distinction between the private and public sectors, outlining their core characteristics and objectives. It then explores different types of business ownership, including sole proprietorships, partnerships, limi...Read More

How business operate

Table of Contents
TASK 1............................................................................................................................................1
1.1 Private and Public sector..................................................................................................1
1.2 Different type of ownership..............................................................................................1
1.3 PEST and SWOT analysis................................................................................................2
REFERENCES................................................................................................................................4

TASK 1
1.1 Private and Public sector
Definition of Private sector
The private sector consist of business activity that is owned and run by private
individuals. These usually includes corporations, both profit and non-profit (Aguilera and
Crespi-Cladera, 2016). These businesses can be small firm owned by just one person or large
multi-national company that operates globally. Main motive and goal of this kind of sector is to
maximize the profit.
Definition of public sector
The public sector of an economy is the sector that provides a range of governmental
services. Organisations under public sector are either fully owned, managed and controlled by
central, state or local government or partially. This sector overlaps with the private sector in
providing or producing certain goods and services. Basic objective of public sector is to serve
citizens of the country rather than make profit.
1.2 Different type of ownership
The most common way to organise a business;
Sole proprietorship
A business that is owned by one person. This kind of ownership is owned by one person,
who perform most of the roles of the business and owns all the profits, losses and liabilities
(Beneito and et. al., 2015). This can be seen most commonly in retailing, services and
agriculture.
Partnership
Partnership can be defined as a voluntary association of two or more people to act as co-
owners of business for profit. Under this two or more individuals share responsibilities and costs.
For example; medium to large size organisations.
Limited Liability company
A limited liability company is a corporate structure where the owners or shareholders are
liable only to the amount they have invested. According to the Companies Act, it is to be treated
as a separate legal entity (Boyd and Solarino, 2016). There are two types of Limited Liability
Company; Public limited company and private limited company.
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Non-profit corporation
It is a corporation that is organised and operates to provide charitable, educational or any
other services rather than to earn profit. The organisation is run by funds given by any trust or
government.
For-profit corporation
A for profit corporation can be defined as a business which aims to make money through
its operations and is concerned with its own interest. They work and provide services to earn
profit.
1.3 PEST and SWOT analysis
PEST Analysis of Paul's Plumbing Company
Political factor- The political factor include; government policy, political instability, tax
policy, labour laws, etc. The organisation is mainly depends on its labour and the laws and
legislation regarding the workers can affect the operations as well as it is state regulated industry
and laws in the state level on transportation have also affect on the operations and cost of
services (Elvin and Hamid, 2016). Tax policies on hardware and for small to medium businesses
are increasing regularly that have negative effect on the company.
Economic factor- It includes economic trend, labour cost, inflation rate, consumer
disposable income, etc. that affects the growth and success of the organisation. The success of
organisation is depends on the work of labour and their cost affects Plumbing company's cost.
The rate of raw material and economic growth of the country affect the cost decision of labour.
Socio-Cultural factor- This force involves consumer demand and preferences, trend in
the market, population, demographic, home size and structure, imports, etc. affect the business.
The demand, preferences of consumer and market trend is changing in selection of the tools and
fittings in their home that make effect on the company to being with the trend.
Technological factor- Technology and communication infrastructure, emerging
technologies, consumer access to technology, research and constant innovation, etc. The
competition of Plumbing company are taking benefit of emerging technology and consumers
also want advance technology in their services that put pressure on the organisation to implement
new technology such as; online services that can meet consumer need (Beneito and et. al., 2015).
Technology is also changing in transportation that need to asses by the company.
SWOT Analysis of Paul's Plumbing Company
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Strengths
 They have strong relationship with
many different new home builders.
 They provide well designed training
program to their employers whenever
needed (Elvin and Hamid, 2016).
 Efficient team work and highly trained
and experienced technicians and
plumbers are the strength of the
company.
Weaknesses
 Slow to address new market
opportunities.
 High transportation cost
 Limited flexibility in pricing
Opportunities
 Continued expansion for providing
online services.
Threats
 Competition in the similar market can
offer similar products and services
quickly that can be a threat to the
organisation.
 Threat of economic downturn
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REFERENCES
Aguilera, R. V. and Crespi-Cladera, R., 2016. Global corporate governance: On the relevance of
firms’ ownership structure. Journal of World Business. 51(1). pp.50-57.
Beneito, P. and et. al., 2015. Ownership and the cyclicality of firms’ R&D
investment. international entrepreneurship and management Journal, 11(2), pp.343-359.
Boyd, B. K. and Solarino, A. M., 2016. Ownership of corporations: A review, synthesis, and
research agenda. Journal of Management. 42(5). pp.1282-1314.
Elvin, P. and Hamid, N. I. N. B. A., 2016. Ownership structure, corporate governance and firm
performance. International Journal of Economics and Financial Issues. 6(3S). pp.99-108.
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