BM461 Global Business: Consumer Confidence, Investment & Start-up

This report provides an analysis of the global business environment, focusing on consumer confidence and its impact on various industries. It identifies key business sectors likely to prosper or struggle based on UK consumer confidence data, offering investment guidance for amateur investors. Furthermore, the report includes an email providing advice on business start-ups, covering legal and market structures, including sole proprietorships, partnerships, monopolistic competition, oligopoly, and perfect competition. The analysis considers factors influencing demand and supply, such as price fluctuations, availability of alternatives, trends, and commercial advertising, along with contemporary measures of consumer spending, including income levels and borrowing ease. The report concludes with references to relevant academic sources.

Global business
environment

“Consumer Confidence”
Global business environment
Global business environment is defined as the
environment in different sovereign countries with
having exogenous to home environment of
business as well as influence the decision making
that are related to resources and capabilities.
It is related to providing business products and
services across national boundaries.
Consumer confidence
Consumer confidence is defined as the economic
indicator which is related to measure the degree
of optimism that consumers have related to
overall state of country's economy as well as their
own financial situations.
Confidence level of customers impacts on their
economic decisions that are related to their
spending activity (Allyson, and Denslow, 2019).
Tesco which is multinational retailing
organisation provides quality products and
services at affordable prices that enhance
consumer experience with organisation and retain
them with organisation for longer period of time.
Industrial structure
It is defined as the composition of a country's
economic activities as well as production
activities of human material provisions.
 Industries are categorised into three basic
types as per included stages within
production process or values that are
added to a natural resource.
 It is related to the field of economic
which deal with strategic behaviour of
firms, regulatory policy, market
competition and various others.
There are various components that shape
industry structure is mentioned below:
 Competitors inside industry is the
component that impacts overall
performance of industry structure.
Competition depends on various factors
such as number of competitors, products
offering and strategies are similar, high
fixed cost, commitment of competitors,
size as well as nature of existing barriers.

Maintaining or gaining strong distribution
channels in some specific industries can be
extremely costly and difficult (Chakraborty, and
Maity, 2020). Tesco organisation establish
effective and strong distribution channel that
provides quality material to organisation on
affordable prices.
If in industry customers have more power than
sellers that can force prices down or demand that
impacts on business profitability ratio. Consumer
power is high if they purchase large proportion of
products from seller's business.
“Supply & Demand Factors”
Demand and supply is defined as the relationship
between quality as well as commodity that
producers sell in market at various prices as well
as quantity that customers want to buy.
It is very important to make equilibrium in
quantity of goods supplied by producer and
quantity of products that re demanded by
consumers.
There are various factors that play important
role in affecting demands and supply in
positive and negative manner.
All these factors are mentioned below:
Price fluctuation
 It is the strong factor that impacts in
demand and supply of organisational
products. If products become more
expensive then demand of those
products are reduced.
 Tesco cut production cost for
stabilising products value. Whereas,
low prices of products enhance
demands of products as well.
Availability of alternatives or competitors
When large number of alternatives are
available in market that create competition
between new and existing products which
reduce the demand of existing products in
market. Availability of alternatives lead
price war in market that ultimately lower the
prices of products in market (Chatterjee,
2017). Tesco takes decisions regarding
cutting supply cost to fall in line with the
decrease in demand.

Trends
 Trend is the factor that plays important
role in fluctuating demand and supply
of products in market place.
 There are only some things that remain
constant in market.
 Food and shelter also not immune by
the changing trends.
 Tesco organisation concentrates on
current trends and provide them
products and services accordingly that
enhance demands and supply.
Commercial advertising
 Commercial advertisements of products
through internet, radio and television
impacts on supply and demand of
products in market.
 Tesco conducts various online
campaigns and advertisements that
aware customers regarding available
products of organisation.
 It enhances demand and supply for
products and help business to attain the
objectives of higher profitability.

Consumer spending
 Consumer spending is defined as the
total money which is spend on final
products and services by individuals
and households for their personal use.
 There are various contemporary
measures of consumer spending that
include all private purchases such as
durable goods as well as non-durable
products and services (Cohen, 2018).
 Spending power of consumers are
depended in various factors such as
personal saving, production of products
in economy and investment spending.
There are various factors that play important
role in consumer spending are mentioned
following:
 Higher income and confidence level
encourage consumers to spend more.
Higher confidence regarding future
income enhance their spending power.
 Difficulty and ease in borrowing money
is the factor that encourage consumers
to borrow personal loan that enhances
their purchasing power and spending in
products and services.
 Higher wage growth is the factor that
plays important role in encouraging
spending power of consumers.

E-mail
From: [e-mail]
To: [e-mail]
CC:
BCC:
Subject: Regarding business start-up
Solution: Dear friend,
Business: Business is defined as the legal entity which involved in various operations and
activities such as commercial, industrial and professional for profit or non-profit objectives.
Business consist various efforts and activities which are related to produce and sell products and
services with the objective of earning profits. Before starting up business, owner take decision
regarding legal and market structure (Girchenko, Ovsiannikova and Girchenko, 2017). Proper
selection of these structure help business to run activities efficiency to attain determined goals
and objectives.
Legal structure: Business structure is defined as the legal structure of business which consist key
determinants of activities that are performed by the organisation like responsibility and
obligations of business, raising capital and amount of taxes that are paid by the organisation to
tax agencies. Before selecting suitable legal structure, entrepreneur consider needs, goals and
fractures of teach legal structure. Some legal business structures are mentioned below: Sole-proprietorship: sole-proprietors is defined as the simplest business structure which
have one owner who has control over all business operations. These are generally home-
based businesses such as shop, retailing business as well as one-person consulting firm.
Owner of sole-proprietors are responsible for various business operations such as keep
recording business activities, paying taxes. Owner of business is responsible for paying
organisational debts and financial obligations from their personal assets. New business
start-up prefers this business structure then others because it consist less risk and process
of starting sole-proprietors is quite easy and there is less requirement of assets to start
business operations.
 Partnership: Partnership is defined as the simple form of business structure with having
two or more owners. Partnership is the association of two or more people who carry
business operations for the purpose accomplishing common goals. Each partner has equal

right and share in net profits and losses of business. It is simple and cost-effective
business structure which can be formed through oral as well as legal agreement but the
written option is best option which help in disputed or lawsuits between various partners.
Partnership is the most suitable business structure for start-ups because all partners are
jointly responsible for business debts and losses that reduces the risk (Marano, Tashman,
and Kostova, 2017). All partners bring assets and capital that help business to run in
efficient manner and attain determined goals and objectives with efficiency.
market structure: Market structure is defined as the concepts which determined how different
industries are classified as well as differentiated on the bases on their degree and nature of
competition for products and services. Basically, it depends on the characteristics that impacts or
influence the behaviour and outcome of organisation which is working in specific market place.
There are various factors that have power to influence the market structure such as number of
buyers and sellers, degree of differentiated products and concentration as well as ease or
difficulty in entering and existing from market. Competition within market depends on type of
market structure which are explained below:
 Monopolistic competition: Monopolistic competition is defined as the imperfectly
competitive market which consist traits of both monopoly as well as competitive market.
In this market structure business firms are competing with each other and try to
differentiate their goods and service in market on the bases of their quality and branding.
In monopolistic competitive market large number of sellers and buyers are included.
Sellers are not involved in providing homogeneous products. Sellers charge marginally
higher prices for their products to enjoy higher market power. So, sellers are the price
setter in this market structure. For example, in this market products are similar by they
are slightly differentiated in terms of taste as well as flavours like toothpaste.
 Oligopoly: In oligopoly market structure small number of large organisational are exist
which sell differentiated or identical products. As the market consist few market players
so their competitive strategies are depending on each other. Organisations in this market
structure, use their market influence in order to establish prices that enable business to
earn higher profits. In this structure, consumers become the price taker. There are various
entry barriers are established that create difficulty for new business to enter in market.
 Perfect competition: In perfect market competition, large number of small organisational

are complete with each other. Some characteristics of perfectly competition market
structure are it sells similar products, free for entry and exist the market as well as consist
lack price influence over commodities. Consumers have full knowledge regarding the
products, their prices and branding of products that are sold in market place (Venkatesh,
Mathew, and Singhal, 2019). In this market structure the only motive is to maximise
profit and there is no concept of consumer preference work.

REFERENCE
Book and journal
Allyson, S.A. and Denslow, L., 2019. Working with Americans: How to build profitable
business relationships. Routledge.
Chakraborty, I. and Maity, P., 2020. COVID-19 outbreak: Migration, effects on society, global
environment and prevention. Science of the Total Environment, 728, p.138882.
Chatterjee, J., 2017. Strategy, human capital investments, business‐domain capabilities, and
performance: a study in the global software services industry. Strategic Management
Journal, 38(3), pp.588-608.
Cohen, R.B., 2018. The new international division of labor, multinational corporations and urban
hierarchy (pp. 287-315). Routledge.
Girchenko, T., Ovsiannikova, Y. and Girchenko, L., 2017. CRM system as a keystone of
successful business activity. Knowledge-Economy Society: Management in the Face of
Contemporary Challenges and Dilemmas, pp.251-261.
Marano, V., Tashman, P. and Kostova, T., 2017. Escaping the iron cage: Liabilities of origin and
CSR reporting of emerging market multinational enterprises. Journal of International
Business Studies, 48(3), pp.386-408.
Venkatesh, R., Mathew, L. and Singhal, T.K., 2019. Imperatives of business models and digital
transformation for digital services providers. International Journal of Business Data
Communications and Networking (IJBDCN), 15(1), pp.105-124.