BM461 Global Business Environment: UK Consumer Confidence & Business

This assignment consists of two parts: a newspaper article analyzing UK consumer confidence data to identify prospering and struggling business sectors, offering investment guidance, and an email providing advice to a friend starting a business importing mobile phones. The analysis considers factors like consumer spending theory, supply and demand, and the impact of events like the COVID-19 pandemic on various sectors such as food and beverage, hospitality, entertainment, construction, and travel. The start-up advice focuses on the legal structure, market structure (oligopoly), and Porter's Five Forces, concluding with a recommendation for a sole proprietorship structure and highlighting potential challenges and opportunities. The assignment uses references from books, journals, and online statistics to support its analysis and recommendations.

Global Business
Environment

Contents
Coursework 2a)................................................................................................................................1
Coursework 2b) ...............................................................................................................................4
REFERENCES................................................................................................................................6

Coursework 2a)
Consumer confidence is an economic indicator. It measures how confident consumers are
about the overall state of the economy. The confidence of consumers impacts on their economic
decisions like their spending activity. This is important for business concerns as it helps to state
economy expansion and their performance in environment. The environment is changing where
it became difficult for organizations to remain competitive as it needs to introduce new products
and services for increasing customer confidence (Morrison, 2020). If there is weak consumer
confidence that means decline in consumer spending and manufactures will decrease their
inventories. The economy of any country affected by the customer base and their spendings. For
example, if there is high customer base then economy of specific country will increase and vice
versa. There is need to have proper information about business sector and people needs that can
help to stablish the business properly. The different business sectors such as investors,
manufacturers, retailers, government, and banks uses several consumer assessment to plan their
actions. As Covid-19 occurred in whole world where it became challenging for organizations to
operate their business continuously and remains active. UK is a sovereign country in north-
western Europe (Tuleja, 2021). In this country, many businesses established for the purpose of
filling customer needs and improving economy.
Illustration 1: Statistics of business proper 2021

After analysing the UK market by Economist and ONS business it has been evaluated
that there is different business sector that will prosper over the next 12 month as demand will
increase of such products and services. The consumer spending theory states how people decide
to spend their money on the basis of individual preference and budget constraints. This theory
will be used by manufacturing, and hospitality sector who understand the demand of their
customers and provide products and services accordingly. By considering demand and supply
factor such as changes in price, transport improvements, and supply of products is considered by
UK's business (Statistics of consumer confidence, 2021). The IT is another sector that will grow
in upcoming period as technology and innovation is using by companies for the purpose of
increasing customer base as well confidence. In food and beverage sector Unilever is the largest
food manufacturing and consumer good company that will produce more healthy and design
products to attracts customers. The example of hospitality sector is Royal Berkshire NHS that
will propsper as number of patients increasing day by day due to Covid attack and another
pandemic that directly impacts on people's health where they needs health care centre to get
proper treatment. The another sector is Automobile in which Volkswagen is considered as
prosper stage as it focus on new technology and innovation in their products that will help to
grow a business continuously (Statistics of future expectations, 2021).

Illustration 2: Sector that will struggle in next 12 month
It also has been seen that there are number of business sectors in UK market, which are
struggling to run and grow their business in changing environment. This directly impacts on
consumer spending and economy of country. If business is not running properly then it will be
challenging for country and organization to continue it regularly. The covid attack has changed
the buying behaviour of people where it became difficult for companies to influence people and
encouraged to make buying decisions. The entertainment sector is falling continuously as buying
behaviour of people has been changed. For example, consumer confidence towards Netflix is
decreasing day by day because of lack in demand and not focused to changing trend. The
industrial structure of entertainment industry is segmented into Movies/Cinema, Television,
Music, Publishing, Radio, Internet, Advertising and Gaming. This adopts oligopoly market
structure that directly affected people buying behaviour. The construction sector is also will
struggle within next 12 month because of decreasing demand and supply of products and
services. Balfour Beatty is an example of construction company which going to struggle to
operate their business due having competition and changing buying habits. Travel and tourism is
also struggling sector. According to financial times Audley Travel is facing the challenge to
operate its business as earlier as buying habits of people is changing and government has put
some legislations over travelling sector that impacted negatively.

Business sector Example of organisation Prosper /
Struggle
Food and beverage sector Unilever Prosper
Hospitality sector Royal Berkshire NHS Prosper
Auto mobile sector Volkswagen Prosper
Entertainment sector Netflix Struggle
Construction sector Balfour Beatty Struggle
Travel and tourism sector Audley Travel Struggle

Coursework 2b)
An e-mail to friend for starting their own business by using their skills and abilities
The main purpose of writing this email is to guide a friend about starting their own business of
import cheap mobile phones from Taiwan or China and sell them to
rural investors in emerging economies who need mobile business communications. This will
help to increase the demand of customers and would support to grow a business continuously.
To start any kind of business there is need to consider the legal structure as it states what
activity is going to engage in business to raise money. Sole proprietorship and partnership are
two type of legal structured that is followed by business concern according to their business size
and scope. There is different between structure such as sole proprietorship means a business is
started by an individual by arranging capital and sources itself. In this, one person is personally
liable towards its functions and activities (Dzwigol, Dzwigol-Barosz and Kwilinski, 2020). The
advantages of single ownership is easy to establish, can be operate quickly, no need to follow
high compliances & taxation, and managing all functions as well duties. This can help to
operate by individually by using their skills and abilities to work. The disadvantages of sole
proprietorship is limitation of management, having limited scope to expand their business, no
large-scale economies, and unlimited liability that directly affected the business.
The partnership is another structure in which two and more than two people works collectively
by sharing knowledge, capital, and sources that can help to operate a business effectively. The
pros, all partners are liable to their activities, profits and losses that supports to operate a
business effectively. The partnership structure is less formal with few legal obligations, better
decision making, have privacy, have more partners and proper arrangement of capital that sould
help to establish and operate the business. The cons of same structure is members is exposed to
unlimited liability for their activities (Sharma and et.al., 2020).
To start a import business, sole proprietorship structure has been followed by such person. The
sole proprietorship is the simple business structure which is applied by a person to start or
responsible for the day-to-day operations of the business. The structure will help a business
concern to understand the requirement of their customers in particular area and provide kind of
products as well as services. To import a cheap mobile phones and Taiwan and China then sell
in to rural people could help to operate a business effectively. This will help to manage all

business activities and reduce obstacles that might be occur during working. The reason of
selecting this structure is it is newly start-up that could be start individually by maintaining
good relationship with suppliers in selected country. The issue might be arise in this, is lack of
funding and relationship with country that can create problem (Nudurupati, Garengo and Bititci,
2021).
Market structure is the outline of organizational sector that states how firms are
differentiated and categorised on the basis of good types and how operations are affected from
external factors. This also depicts level of competition in a market. The types of market structure
are monopoly, and oligopoly. In monopoly market, infinite number of firms operate and can
control prices as well as output. Oppositely, in oligopoly market having small number of
suppliers which can be found in country and across the boundaries. The chosen business will
cover under oligopoly market structure as it would import cheap mobile phones from other
country and sell them into rural areas.
Under using porter's 5 force, bargaining power of suppliers in such business idea will be
higher because there are specified suppliers who sells cheap mobile phones. In case, suppliers
has increased the cost then it would be difficult or challenging for such person to operate its
business. The bargaining power of buyers is low as people needs mobile phones to maintain
effective communication that is providing by such new business. In market, there are less
number of business industry who sells cheap mobile phones so that, this could be opportunity for
chosen business to continue their idea. The threat of substitution is high has e-mail, social media,
and computers, landlines and other devices are available to share information (MIRALAM, ALI
and JEET, 2020). The threat of competitive rivals is lower because of starting a new business by
generating new ideas and managing all business activities. And last, threat of new entrance is
high because to enter in such sector is not typical and restrictive that could create challenge for
such business.
Conclusion
From the report it can be concluded that by following HRMC import duties, new business
idea could be convert into establishing a business by friend. This business is relates to sole

proprietorship by following oligopoly market structure. This will help to manage all functions
and activities effectively by arranging fund and resources.

REFERENCES
Books and Journal
Morrison, J., 2020. The Global Business Environment: Toward Sustainability?. Red Globe Press.
Tuleja, E. A., 2021. Intercultural Communication for Global Business: How leaders
communicate for success. Routledge.
Dzwigol, H., Dzwigol-Barosz, M. and Kwilinski, A., 2020. Formation of Global Competitive
Enterprise Environment Based on Industry 4.0 Concept. International Journal of
Entrepreneurship. 24(1), pp.1-5.
Sharma, P., and et.al., 2020. Managing uncertainty during a global pandemic: An international
business perspective. Journal of business research, 116, pp.188-192.
Nudurupati, S. S., Garengo, P. and Bititci, U. S., 2021. Impact of the changing business
environment on performance measurement and management practices. International
Journal of Production Economics, 232, p.107942.
MIRALAM, M. S., ALI, N. and JEET, V., 2020. Impact of Big Five Model on leadership
initiation in critical business environment among marketing executives. The Journal of
Asian Finance, Economics, and Business. 7(11), pp.507-517.
Online
Statistics of consumer confidence. 2021. [Online]. Available through:
<https://finance.yahoo.com/news/why-consumer-confidence-important-economic-
170019558.html>
Statistics of future expectations. 2021. [Online]. Available through:
<https://commonslibrary.parliament.uk/research-briefings/sn02817/>
Morrison, J., 2020Tuleja, E. A., 2021Dzwigol, H., Dzwigol-Barosz, M. and Kwilinski, A.,
2020Sharma, P., and et.al., 2020Nudurupati, S. S., Garengo, P. and Bititci, U. S.,
2021.MIRALAM, M. S., ALI, N. and JEET, V., 2020Statistics of consumer confidence.
2021.Statistics of future expectations. 2021.