Business, Global, Student Reporter

International Market and its Factors on UK Business

Avatar photoHeon Jeong Yi

The purpose of the public sector and private sector

 Private sectorPublic sector
Types of organizationsFor-profit businessesGovernment
OwnershipIndividuals, shareholdersThe public
Types of workersEmployees and independent contractorsCivil servants
General strategic goalcompetitivenessMission effectiveness
General financial goalsProfit; growth; market shareCost reduction; efficiency
valuesInnovation; creativity; goodwill; recognitionAccountability to the public; integrity; fairness
Desired outcome stakeholdersCustomer satisfaction Stockholders; owners; marketCustomer satisfaction Taxpayers; inspectors; legislators
Budget priorities defined byCustomer demandLeadership; legislators; planners
Justification for secrecyProtection of intellectual capital; proprietary knowledgeNational security
Key success factorsGrowth rate; earnings; market share; uniqueness; advanced technologyBest management practices; sameness; economies of scale; standardized technology

The main stakeholders of an organization and their objectives

The impact of fiscal policies and monetary policies on businesses

 Fiscal PoliciesMonetary policies
ResponsibleSet by the GovernmentSet by Central Banks
ToolTax and government spendingInterest rates and money supply
EffectBudget deficitCost of borrowing/mortgages
DistributionIt depends on which taxes you raiseHigher interest rates hit homeowners but benefit savers
Exchange rateNo effect on the exchange rateHigher interest rates cause appreciation
Side effectImpacts government budget and national debtImpacts on the exchange rate and housing/property market
PoliticsStrongly politicalLargely independent
Liquidity trapFiscal policy advised in very deep recessionsCutting in interest rates may not work in a liquidity trap

How resources allocate in a Capitalist, Mixed, and Socialist economy

CapitalistsSocialistMixed
Private ownership and controlGovernment ownership and controlCombination of Capitalistic and socialistic economy
The Predominance of the Private sectorThe Predominance of the Public sectorCo-existence of private and public sector
The Decisive role of marketThe Decisive role of planningThe Decisive role of the market and supportive part of planning
Profit-induced BusinessesProduction Guided by social benefitProfit-induced private business
Economic decisions to be taken by Price-mechanism or Market-mechanismFinancial decisions to be taken by the Planning Committee on behalf of the GovernmentEconomic decisions (price decisions) to be taken both by the government as well as market
Motive-Consumer is Sovereign/King.Welfare Promotion is the Primary motive.Protects individual freedom

The impact of supply and demand on the market

Figure 1: Demand and supply integration framework adopted from Esper, et al. (2010, p. 7)

                         

The market moves to a new equilibrium due to changes in supply or demand that change equilibrium prices and quantity.

  • Increasing market demand = Increasing product prices and rising production quantities.
  • Decreasing market demand = Decreasing product prices and decreasing production quantities.

Changes in demand occur due to price fluctuations in goods or services and move along the demand curve. Changes in angles are changes needed, and to some extent, are required for all prices. Changes in the market can be changed by changes in population, preferred income, expectations, and costs of alternative products.                                                                                                    

  • Increased product supply = Decreased product prices and increased quantity.
  • Decreased product supply = Increased product prices and reduced quantity.

Changes in supply volume can be caused by price fluctuations in goods or services and move along the supply curve.  The shift in supply represents a change in a curve and refers to a change in all prices when more or less collection is made.

Michael Porter’s 5 Forces

Competitive Rivalry  The Threat of New Entry  Buyer Power  Supplier PowerThreat of Substitution
– Switching costs
– Barriers to exist
– Brand loyalty
– Quality differences
– Number of competitors
– Diversity of competitors
– Industry growth  		-Cumulative experience
-Access to distribution channels
-Brand loyalty
-Switching costs
-Barriers to entry
-Capital requirements -Barriers to entry
-Government policies		– Price sensitivity
– Number of customers
– Differences between competitors
– Buyer’s ability to substitute
– Size of each customer order
– Switching costs
– Buyer’s information ability		– Focal company’s ability to substitute
– Number and size of suppliers
– Uniqueness of each supplier’s product  		– Relative price performance of substitute
– Buyer propensity to substitute
– Number of substitute products available
– Switching costs
– Perceived level of product differentiation

The effect of the market decision on business policies

ProductPricePlacePromotion
– Brand
– Services
– Variety
– Features
– Warranties
– Quality
– Packaging
– Sizes
– Design		– Allowance
– Discounts
– Credit Terms
– List Price
– Payment
– Period		– Locations
– Channels
– Transport
– Coverage
– Inventory
– Assortments		– Direct Marketing
– Public Relations
– Sales Promotion
– Advertising

The impact of different cultures on the businesses

All organizations develop and maintain their own culture and have a strong influence on their members. Organizational culture is created according to what is allowed and appropriate, and what is not permitted and inappropriate. That means it refers to a system of values, assumptions, and beliefs shared with everyone in the organization. It deals with not only details related to work performance, but also overall behavioural styles and dress codes within the organization.

Figure 2: The Competing Values Framework (Cameron and Quinn, 1999)

The value of the international market to UK business over the last 70 years

Britain’s economy accounts for most of its imports and exports in the gross domestic product (GDP) over the past 160 years, except for two major historical events, the Great Depression and World War II.

Figure 3: Importance of trade for the UK over the last 200 years

The global factors on UK business

The impact of EU policies on UK business

Source: Analysis of recent Decision Maker Panel survey responses from around 3,000 UK business executives, by Nicholas Bloom et al.
Source: Analysis of recent Decision Maker Panel survey responses from around 3,000 UK business executives, and Bureau van Diik FAME accounts data, by Nicholas Bloom et al.

References

By Heon Jeong Yi

She is a student of Concordia International University student.

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