Report on Global Business Environment, Investment and Legalities

This report provides an analysis of the global business environment, focusing on investment opportunities and legal structures for entrepreneurial ventures. It examines the consumer confidence and the impact of the pandemic on various sectors, highlighting the potential for prosperity in the oil sector and challenges in the travel industry. The report suggests investments in natural gas companies and discusses the importance of understanding supply and demand factors. Furthermore, it explores legal structures like sole proprietorship for startups, analyzes market structures such as monopolistic competition and oligopoly, and assesses the intensity of competition. The report concludes with insights on navigating the competitive market landscape and understanding tax and customs for imported goods.

CW 2 Global business
environment
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“Consumer Confidence”
It is an economic barometer which is
determined by different institutions in several
countries. The rise in consumer confidence in
market showcases economic growth and
increase in consumer consumption of different
goods and services. High consumer confidence
is essential for growth of business firms in
specific market. As per the GFK consumer
confidence survey the consumer confidence
lowered by one point in December 2021 in
comparison November 2021 (Business and
Consumer Confidence: Key Economic
Indicators, 2021).
Business Sectors which will
prosper in 2022
Oil sector will prosper in the year 2022 and
will become one of the business sectors to
quickly recover from the damage caused by the
pandemic. The economic environment created
because of the pandemic will lead to increased
production in the oil and gas industry which
will act as booster for economic betterment of
the oil sector. This is evidenced by the tight
supply line for crude oil as the current supply
line consists of 432 million barrels while the
As per the OPEC the energy market in the
upcoming year provides an optimistic view
with growth prospects for business firms. The
supply surplus in the year 2022 will replenish
oil inventories in the major consuming
countries which is positive sign for the oil
industry. The business firms from the oil sector
which will see prosperity in the next year is
Exxon Mobil. The American natural gas
company has seen a fundamental recovery of
its cash flow prospects in financial ear of 2021
(Exxon Mobil: A Top Recovery Pick For 2022,
2021). This trend will continue in the next year
as petroleum prices are set for continual
recovery in the year 2022.
Business Sectors which will
struggle in 2022
The beginning of the pandemic and
spread of different variants throughout the
globe negatively affected the travel industry.
Business firms engaging in the travel industry
such as the transportation industry have faced a
difficult year because of pandemic travel
restrictions. The upcoming year will also be
filled with struggle and challenges for the
travel industry as the tentative revival of the

average five-year supply line has been 460
million barrels (Climate change: Fossil fuel
production set to soar over next decade, 2021).
The positive reactions in the supply line
showcases continues increase in demand for oil
and opportunities for business firms in the oil
sector. As per the report of intergovernmental
panel on climate change oil production will
continue to increase in the upcoming years and
will become main cause of pollution due to
fossil fuel production increase. The prediction
of three major energy organizations OPEC,
International energy agency and the US Energy
information administration suggests that
demand growth in the year 2022 in the range of
3.3 to 3.4 million barrels per day which will
allow full return to pre pandemic levels (Where
is the oil market heading in 2022? 2021). In
this way the oil sector will be able to quickly
recover from the negative impact of pandemic
and prosper in the upcoming year.
travel industry is affected by worldwide
increasing cases of Omicron (Will Omicron
stall the airline sector recovery in 2022?,
2021). Many European nations such as
Germany and France have introduced
restrictions related to travel of UK citizens.
This trend will continue in the future as
Omicron is responsible for 90% of rise in
infection cases in UK (Now Christmas is over,
how bad is the Omicron situation in England?,
2021). This is fast spreading variant of the
COVID-19 virus which has quickly affected
global recovery from the pandemic. This
statistical data showcases that the recovery
from the variant of COVID-19 pandemic is
still a challenge and return to normalcy will
take time for the travel industry. In particular,
the airline business sector will be most affected
because international travel is restricted
because of rise of Omicron. Emirates Airline
faced significant barriers during holiday season
of December because of rise in COVID-19
cases. This will affect the recovery of the
airline sector in the year 2022.

Investment Suggestions
There are different factors such as price fluctuation which affect supply and demand of a product.
In order to take complete advantage of opportunities introduced by future market changes, it is
important to understand supply and demand factors affecting an industry. In case of oil business
sector, the changes in price will positively affect demand of oil in the upcoming years while supply
will be affected because of uncertainties surrounding Iran oil deal. Investment in natural gas
company shares such as Exxon Mobil and Chevron can be profitable in the coming year.

750-word e-mail message regarding a business start-up
Greetings,
This email is in reference to the topic of different legal structures, market structure and
competitiveness which can provide a better understanding of starting an entrepreneurial
venture.
Legal structures
Legal structure of an organization covers different aspects of the company such as obligations
and responsibilities of the owners and legal existence of the company. The most common legal
structure for a new entrepreneurial venture is sole proprietorship. In this type of legal structure
the enterprise does not have separate legal existence from the owner and the enterprise. Payment
of company debts and los on entrepreneurial endeavour is undertaken by the owner. The
advantage of tis legal structure is that it can be easily gained by an enterprise as the legal
paperwork required for this legal structure is minimal (Cohen, 2018). This saves time and legal
costs. The disadvantage associated with sole proprietorship is that it limits capital while
unlimited liability is gained by the entrepreneur. Partnership is legal structure which involves
creating agreement with two parties or more to accomplish common business objectives. The
advantages of adopting this legal structure is that it reduces risks of the entrepreneurial venture
as the liabilities of business operations are divided. The capital needed to start a venture is also
divided which reduces the financial risks. The disadvantage of adopting partnership legal
structure is that it reduces the autonomy of entrepreneur as they each partner has equal control
over the company.
Suggestion
The best market structure for a new entrepreneurial venture is sole proprietorship. This is
because it allows the owner to have complete control of business decisions and business
operations. This supports autonomous control over the company so that steps can be taken to
ensure that the enterprise moves in the right. In addition to this, the adoption of sole
proprietorship will help avoid lengthy legal paperwork which is complicated and costly for first
time entrepreneur (Girchenko, Ovsiannikova and Girchenko, 2017). The adoption of this legal

structure during initial time period of the enterprise helps the entrepreneur be the leader of the
venture and ensure that suitable actions are taken to reduce risks and ensure swift growth of the
company. In context of the business idea of selling affordable mobile phones by exporting them
from China is suitable for this legal structure. The justification is that it is simplistic business
model and can provide sole trader ship will support attainment of initial profit for further
expansion. After gaining initial success the legal structure can be changed according to the
current situation of the company to accommodate future success and continuous progress. In this
the usage of sole proprietorship helps attain initial success of the company while supporting easy
change of the legal structure in future if needed.
Market structure
Under the monopolistic competition market structure has the characteristics a pure
monopoly. This type of industry structure is created when a single supplier provides goods or
services to many consumers. The advantage of monopolistic competition is that business firms in
this type of market structure are easily able to set up economies of scale and enjoy better profits
than competitive market structure (Marano, Tashman and Kostova, 2017). The disadvantage of
this market structure is that it leads to decline in consumer surplus. In case of the oligopoly
market structure small number of large firms dominate the market. The advantage of oligopoly is
that there is high potential to make profits while the disadvantage is that there is low choice for
the consumer. In context of the business idea of selling affordable mobile phones at cheaper
prize by exporting cheaper products from China, The market will be an Oligopoly. This is
because small number of multinational companies such as Apple, Samsung, Huawei and
Motorola capture large amount of market share of the UK mobile phone industry.
Measurement of Competition
Intensity of competition: There is zero intensity of competition in case of monopolistic market
structure because of single firm. The level of competition in oligopoly is low but higher than
compared to monopolistic industry structure because of presence of limited organizations with
high market share (Venkatesh, Mathew and Singhal, 2019).
Bargaining Power of Consumers: The level of consumer power in case of a monopolistic
market is zero because there are no alternative. The power of consumer in context of oligopoly is
low because there is small number of interdependent firms.

Bargaining power of suppliers: Monopolistic market has zero bargaining power of supplier as
single entity is the consumer for raw material. On the other hand, in oligopoly the power of
supplier is low because of there are few options to sell raw material.
Threat of substitute products: The risk of substitute products replacing products in a
monopolistic industry is zero because a single enterprise acts as the main supplier of goods and
services. On the other hand, the threat of substitute products is low in case of oligopoly as few
industries which are interdependent to each other gain high market share.
Threat of new entrants: There threat of new entrants in case of monopolistic industry is zero
because single company dominates the market. Control of few companies in the market increases
entry barriers reducing threat of new entrants.
In order to create an entrepreneurial venture legal structure and the market structure for the
enterprise need to be identified. It helps make further plan for intuiting business growth.
Developing an understanding of HMRC tax and customs for imported goods is also important to
start a venture as cheaper raw material can be gained from abroad.
From the above discussion on competitive market landscape in Monopolistic market and
oligopoly, it is understood that Oligopoly is less competitive. This means that the Oligopoly
market of affordable Chinese phones sold in UK is highly competitive yet suitable for entry.

REFERENCE
Book and journal
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.
Online
Business and Consumer Confidence: Key Economic Indicators, 2021. [Online] Available
through <Business and Consumer Confidence: Key Economic Indicators - House of
Commons Library (parliament.uk) >
Climate change: Fossil fuel production set to soar over next decade, 2021. [Online] Available
through
<https://www.bbc.com/news/science-environment-58971131>
Exxon Mobil: A Top Recovery Pick For 2022, 2021. [Online] Available through
<https://seekingalpha.com/article/4476025-exxon-mobil-xom-top-recovery-pick-2022>
Now Christmas is over, how bad is the Omicron situation in England?, 2021. [Online] Available
through <https://www.theguardian.com/commentisfree/2021/dec/30/christmas-omicron-
uk-pandemic-hospitalisations>
Where is the oil market heading in 2022?, 2021. [Online] Available through
<https://www.hellenicshippingnews.com/where-is-the-oil-market-heading-in-2022/>
Will Omicron stall the airline sector recovery in 2022?, 2021. [Online] Available through <
https://www.bbc.com/news/business-59654176>