The External Environment In Which Businesses Operate Can Have A Significant Effect On Their Success. To What Extent Do You Think The External Environment In The Uk Is Favourable For Businesses At The Moment? Justify

1534 words - 7 pages

The external environment in which businesses operate can have a significant effect on their success. To what extent do you think the external environment in the UK is favourable for businesses at the moment? Justify your answer with reference to external factors and/or businesses that you know. (40 marks)
External environment in the UK can be favourable in any market to a business based on social and economic factors. This is important because this involves the way that people live, the lifestyle they have and finally their needs and wants as a customer, this is extremely important to businesses as they would need to keep on top of these wants and needs and adapt to suit them so that they ...view middle of the document...

The external environment in the UK can be favourable in any market to a business based on legal factors. The legislation all over the UK have made it harder for companies to make money as there are a number of different laws that protect customers for example Trade Description Act, this means that that all products must look and work according to how they were described, there are also laws to protect the employee e.g. Minimum Wage, this is a legislation that refers to the minimum amount an individual is allowed to be paid per hour and finally there are laws to prevent business for example the Copyright law, this means that one businesses idea is not allowed to be copied by another all these laws come under two different categories, civil law and criminal law. A business that used the law to their advantage is Marks and Spencer’s (m&s) they realised a scheme called “Plan A” whereby they had 100 commitments, the end goal of becoming the world’s most sustainable major retailer. Marks and Spencer’s haven only complied with the law they exceeded it and set a new one, they felt that they needed to take responsibility over their consumers, as a result of this in Wales they started to charge people 5p if they wanted a carrier bag, the money raised for this was then given to the World Wildlife charity, but also it reduced the amount of people that actually wanted bags as they may not actually need one, this therefore means that there will be less of a chance for the bags to be thrown away incorrectly. As a result of doing this M&S revenue have risen to £9.2billion (£4.1billion from general merchandised and £5.1billion), this could be explained by the good brand image they are giving off so as a result it attracts customers. Compared with Starbucks who broke the law by avoiding pay their tax. Starbucks has been open since 1998 the company has racked up over 3 billion pounds ($4.8 billion) in coffee sales, and opened 735 outlets but paid only 8.6 million pounds in income taxes, largely due because the taxman disallowed some deductions. Over the past three years, Starbucks has reported no profit, and paid no income tax, on sales of 1.2 billion pounds in the UK. However toothier shareholders they have described their UK branches as profitable and they plan to model their business plan and layout back home in the United States, they have done this so that they can still attract shareholders to invest in the business so that they have to capital to expand on a global scale. In 2008, Starbucks filed a 26 million pounds loss in the UK. Yet CEO Schultz told an analysts' call that the UK business had been so successful he planned to take the lessons he had learnt there and apply them to the company's largest market - the United States. Even though Starbucks have not yet been found completely guilty of this crime they have announced that they will be willing to pay £20 million worth of tax in the next two years. This is due to the fact that they have lost...

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