Sports Direct's Business Environment: Competition, Globalisation in UK

This report provides a comprehensive analysis of the business environment, focusing on Sports Direct as a case study. It examines various aspects, including different types of business organizations (public, private, and voluntary), legal structures relevant to each, and a comparison between public and private ownership, highlighting the impact of COVID-19 on both. The report assesses the UK's competition policy in comparison to the EU, elaborating on the role and impact of the Competition and Market Authority on customers. Furthermore, it delves into the objectives of government policies to regulate the economy and their effects on businesses like Sports Direct, covering fiscal, monetary, and supply-side policies. Finally, it provides an understanding of globalisation and its impact on business, competition, and the economy, including the effects of offshoring. The report concludes that various types of organizations have their own legal structures to achieve specific goals, and that competition and market authorities protect customers from harmful business practices, emphasizing the importance of understanding market structures and the role of globalisation in business operations.

Business Environment

Contents
INTRODUCTION...........................................................................................................................3
PART 1 ...........................................................................................................................................3
PART 2............................................................................................................................................3
Types of business ............................................................................................................................3
Legal structures ...........................................................................................................................4
Comparison between public and private ownership ...................................................................5
Assessment of UK competition policy as compare to EU..........................................................5
Competition and market authority and its impact on the customers ...........................................6
Understanding of the objectives of government policies to regulate economy and its impact ..6
An understanding of globalisation and its impact on business, competition and the economy ..7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment refers to the sum of all micro and macro factors of an organisation
which directly affect its operation. It helps the company in determining their useful resources,
business opportunities, assists in planning as well as improves overall quality, performance, ,
profitability and growth of the company. To define the business environment the selected
company is Sports Direct, it was founded in 1982 by Mike Ashley. It deals in sports product like
sports equipment, cosmetics, electronics, textile and footwear.
The report covers legal structure, comparison between private and public ownership as
well as UK's competitive policies in comparison to EU. Further, it covers market government
policies and its impact as well as globalisation and its impact on economy.
PART 1
Covers in PPT
PART 2
Types of business
A business operates it activities in a specific type of organisation like private, public and
voluntary organisation to achieve the goal for which they established.
Public sector organisation
The public organisation is established controlled by government to provide product or
services for the betterment of people in a nation. For example; NHS, it was established in 1948
by British government at UK.
Motive- The main motive of NHS is to provide healthcare services to improve the
physical and mental conditions of people.
Private sector organisation
The private organisation is owned and operated by the person as well as group of persons
to earn maximum profit or customer base. For example; Sports Direct.
Motive- The main motive of Sports Direct is to increase their sales and profit by selling sports
product.
Voluntary organisation
Voluntary organisation is non profit business which is run by the people of a society to
provides services to the needy people. For example, Samaritans, it was founded in 1953 at UK.

Motive- The main motive of Samaritans is to help people by providing them their
ambulance or health services.
Legal structures
The legal structure refers to the business procedure and legislature of a company in which
they registered to conduct their operation (Cristofaro, 2020) .
Legal structure in references to public sector organisation are as follows
National level- In this structure, all the law, rules, regulations, policies and decisions are
formed and approved by the president and members of parliament of a country. The advantage is
the members have full authority as well as disadvantage is it has big and complex structure
which leads problem in the working.
State level- In this level, the members of state government perform their duty to provide
services for the betterment of society in a particular state. The benefits is they have good
financial resources whereas, the disadvantage is the members have less authority and they work
under the control of central government.
The NHS conduct their business activities at national level.
Legal structure in context to private sector organisation are shown below-
Partnership- It is a type of private business which is owned and manage by many people
as a partner as well as profit and responsibility is divided as per the share of each partner. The
advantage is the members have vast knowledge and experiences as well as disadvantage is they
belong to different culture background so there is chance of conflict and fraud.
Public limited company- In this structure, the company is owned by stakeholders and
controlled by directors or management to offer their shares to public for capital. The company
has big advantage of large amount of funding where as, it has disadvantage also there is lot of
public interference (Dana, 2018) .
The Sports Direct sale their product as a public limited company.
Legal structure in context to voluntary sector organisation are given below-
Trust- It is managed by a trustee as a agent of the owner of the business for a specific
goal. The advantage of trust is it has less formalities to registered whereas, the disadvantage is it
is difficult to generate funds for operation.

Unincorporated- It is non profit association which is run by the individuals of same
motive to provide social services. The owners has advantage as they conduct their activities at
low cost of operation where as the disadvantage is members have less knowledge which leads
they are unable to face risk.
The Samaritans is a charitable trust which provide health care services.
Comparison between public and private ownership
Public ownership refers to the company that is owned by shareholders or managed by
direction which sells their shares to the public by initial public offering like Sports Direct.
Whereas, private ownership is a company which is privately owned and manage by the directors,
management and investors (Dziubaniuk and Nyholm, 2020). Both the companies operate their
business to earn maximum profit. The public limited company raise capital by offering shares to
the public as well as the private limited company acquire funds for capital by taking loan,
personal earning and private investors.
The impact of COVID19 on both the companies has same or negative such as they suffered from
huge loss. Because of uncertain Lockdown, government restrictions that leads to decline in their
production process due to shortage of raw materials which decreases their profit or customer
base.
Assessment of UK competition policy as compare to EU
The market structure refers to the multiple market conditions which determine
connections among sellers and buyers. It includes four categories like monopoly, oligopoly,
perfect competitions and monopolistic competition (Fadaki, Rahman and Chan, 2020). In
monopoly only one company sell their product or services in whole industry without any
competitors. In oligopoly, there are less number of large companies which sell identical or
differentiated products in a same market. In perfect competition, there is a huge number of small
or micro companies which compete against each other. In monopolistic competition, the market
has both the characteristics of monopoly or perfect competition. The UK competition policy says
that competition law desires to curb practices which restricts competition or undermine to the
detriment of buyers. It is dominant market positions by a company as well as monopolistic
competition in the market of UK. Whereas, the EU competition policy say that prohibits
agreement among two or more autonomous market businessman if they control competition.
There is less monopoly and perfect competition in the market.

Competition and market authority and its impact on the customers
The competition and market authority is the department of non ministerial government in
UK which regulate the competition in the market. They promote or encourage competition
among the companies for the benefit of customers. It also strengthen competition among
businesses as well as reduce anti competitive practices to prevent customers. They operate their
practices by investigating mergers among companies , to assure that they cannot eliminate
competition (Lam and Wong, 2018). They also investigate market condition to determine
consumer problems or completion in a country as well as take strict actions against companies or
people who conduct anti competitive activities. It has great impact on the consumers because
they work for the safety or protection of customers from harmful practices of companies. It
provides protection and give rights to customers which save them or their money from wrong
practices of business.
Understanding of the objectives of government policies to regulate economy and its impact
The macro economic objectives of UK is stable economic growth, low inflation, balanced
payment or exchange rate, full employment, better taxation and stable economic environment.
The instruments of micro economic policy are monetary policy, fiscal policy and exchange rate
policy. The main aim of these policies of government to create a stable economic environment
and development in a country. fiscal policy refers to the taxation, subsidy and borrowing policy
of the government. Monetary policy refers to the credit, exchange rate and interest rates policies
of the government. Supply side policies is designed by government to make effective market
condition in a country (Le, Ling and Yau, 2018) . The government policies of UK intervene in
operation of Sports direct such as management have to pay tax on their sales to the government
every year. As well as they have to give fixed amount of interest on the loan from bank and they
also adopt rule and regulation formed by government to operate their activities in particular
market. The impact of government interventions in Sports Direct as they have to contribute in
generation employment in country for taking subsides from the government. By imposing these
policies, the government improved their economic condition, by taking taxes from big
companies ad give subsidies to small companies they generate employment in country (Liu and
Yang, 2019). By increasing rates of credit or foreign exchange they controlled inflation which
increase sustainability in a economy of country.

An understanding of globalisation and its impact on business, competition and the economy
Globalisation refers to the process of expansion, integration and interaction between
companies, government and people worldwide. It allows people or companies to conduct their
practices and activity in any country to achieve their goal (Rezaee, 2019). They freely conduct
their operation under any country policies to explore their business. In Sports direct,
globalisation has increased competitions which is associated to its product, services, market,
cost, price, technology adaptation, production and customer base or response. Globalisation
allows business to expand their operation globally to increase their market share, customer base,
contracts and profitability. The trade market has enhanced the GDP, employability and foreign
exchange by imports or exports of a country which leads to development. Off shoring is a
process in a business like Sports Direct to relocation their production process from one country
to another (Tredinnick, 2018). It affect the domestic economy like they relocate their process in a
country where labour cost is low to reduce cost but it also increased another cost as the expenses
on coordinating and monitoring workers performance.
CONCLUSION
From the above information, it is concluded that there are various type of organisation
which has their own legal structure to achieve their specific goal. There are two type of
ownership such as public or private which acquire funds from different sources like public
offering, loans and many more. The competition and market authority provide protection to
customers from harmful business practices. There are four type of market structure which define
the market condition in a country. Through globalisation companies and countries can interact
with each other freely.

REFERENCES
Books and journal
Aker, Ş.L. and Aghaei, I., 2019. Comparison of business environments in oil-rich MENA
countries: a clustering analysis of economic diversification and performance. Emerging
markets finance and trade. 55(12). pp.2871-2885.
Antonescu, D., 2018. Are business leaders prepared to handle the upcoming revolution in
business artificial intelligence?. Quality-access to Success, 19(166).
Cherunilam, F., 2020. International business. PHI Learning Pvt. Ltd..
Cristofaro, M., 2020. E-business evolution: an analysis of mobile applications’ business
models. Technology Analysis & Strategic Management. 32(1). pp.88-103.
Dana, L.P., 2018. African EntrepreneurshipChallenges and Opportunities for Doing Business.
Palgrave Macmillan.
Dziubaniuk, O. and Nyholm, M., 2020. Constructivist approach in teaching sustainability and
business ethics: a case study. International Journal of Sustainability in Higher
Education.
Fadaki, M., Rahman, S. and Chan, C., 2020. Leagile supply chain: design drivers and business
performance implications. International Journal of Production Research. 58(18).
pp.5601-5623.
Lam, J.S.L. and Wong, H.N., 2018. Analysing business models of liner shipping
companies. International Journal of Shipping and Transport Logistics. 10(2). pp.237-
256.
Le, Q., Ling, T. and Yau, J., 2018. Do international cocurricular activities have an impact on
cultivating a global mindset in business school students?. Journal of Teaching in
International Business. 29(1). pp.62-75.
Liu, H.M. and Yang, H.F., 2019. Managing network resource and organizational capabilities to
create competitive advantage for SMEs in a volatile environment. Journal of Small
Business Management. 57. pp.155-171.
Rezaee, Z., 2019. Business sustainability, corporate governance, and organizational ethics. John
Wiley & Sons.

Supawan, P. and Deebhijarn, S., 2020. Factors Affecting Business Performance of Thai
Restaurants in the United Kingdom: A Structural Equation Model. Asia-Pacific Social
Science Review. 20(2).
Tredinnick, L., 2018. Virtual realities in the business world. Business Information Review. 35(1).
pp.39-42.