The ease of business Index is a key indicator to make assumptions related to economy of any country. It highlights the business friendly conditions of the country that paves the way for nationals to start a business in their homeland. Apart from ease of business index, there are several variables that help to predict the growth of the business in the country. These variables are large in numbers and influence performance growth and innovation in the market. The new business needs to ensure that they have selected right industry to grow in and have rightly targeted the audience with key variables and resources because these decisions lead them to survive in the competitive business environment. The objectives of this paper include the keen analysis of contemporary issues that affects the business development, and the reasons of elimination. It will examine the impact of macro environment and industry structure in the light of some examples. The paper aims to examine the business environment of the South East with respect to entrepreneurial efforts for growth and expansion of the business.
The experience of the organization that relates to a feature in form of an enterprise is an areas of interest for managing the business relationship (Ford, 2003). Starbucks is a global coffee and beverage company. It has a large product line of beverages, food, and other products that are sold through its global network of stores. It practices the best ethic and the sustainability sourcing system. The firm encourages workforce diversity and train their workers to enhance their skills. Addition to this, the employees are offered several competitive benefits. Starbucks arranges community engagement programs and organises different events under CSR activities. In a nutshell the value of buyer’s expectation along with the relationship of the suppliers and collaborative integration needs to be managed with greater perfection (Whipple et al., 2010).
Ethics are key elements in any business and it is responsibility of the entrepreneur to make such rules that supports ethical business environment and forms a positive working culture in the organization. Friedman’s old model for the entrepreneurship guides to enhance short term profit enhancement and stakeholder satisfaction process. The business activities are designed to engage more people in the market while remaining stakeholder centric. The stakeholders are the people who have interest in the business; either they are internal or external part of the organization. For them, social network is crucial part of business process. CSR is unique concept that gives the opportunity for the company to integrate with its social and environmental issues for business while creating an interaction with main stakeholders on a voluntary scale (EU Commission, 2002).
Nowadays, demand pattern and consumption of consumer have great impact on the businesses. In developing nation, there is increase in raw material consumption. Two of developing nations are China and India, which are leading oil importers. They use huge amount of oil to power their industries to produce more export quality goods. These exports are usually sent to western markets. The world is facing severe crisis due to high consumption of non-renewable resources. Therefore, the firm should be careful, be the part of CSR activities and reduce its use of finite resources. In the view of (Wheelen & Hunger, 2012), it is not the environment but the sustainability that leads to a competitive benefits for the firm.
Ethics in the business contain different set of tools and tradition which imply a set of rules and regulations to show it direction (Brunk, 2009). Ethics are the set of good deeds that influence positive actions and resist harmful acts. The firm’s ethical system is responsible for collective frame of actions instead of limited to individuals. There is increase in customer ethics system because consumers are purchasing ethically. An example is more sales of hybrid cars. Another example is Vegan Makeup. Vegan Makeup offers a wide range of products that are not tested on animals and offer great value to the customers. According to several reports, the consumers are buying fair trade label products more than retail products, even if they are highly priced.
Ethics are not like the laws of the company but it far important than that. Ethics are the foundation of every business and the new business highlights it by ethical marketing. The new businesses position themselves as ethical company to gain attention of the consumers. It can use recyclable material and use renewable resources to grab the attention of the customers. There was negative effect on the brand image of BP when the oil was spilled in large scale. Then, the company tried to re-position itself in the market as ethical oriented company. The business ethic thought process enables the firm gaining greater customer reputation, trust and additional profits (Tsalikis and Seaton, 2006).
The circular economy model emphasis on prevent resources for the future generations. It includes the activities that help to make environment friendly efforts. Like every other model, it requires raw material, production, usage and recycling efforts to carry out the activities. A responsible entrepreneurship critique is based on self-interest theory. An example is the Eden project in Cornwell. It was designed to provide 400 employment opportunities. The South West based firms have specific aims and objectives that are environment friendly. Addition to this, they are concerned with the economy of Cornwell that is largely dependent on agriculture and tourism. Cornwell is one of the poorest areas of UK. In knowledge economy the interactive process of knowledge related efforts are applied which helps to gain technical and scientific specification and advancement at a rapid speed (Powell and Snellman, 2004).
Social enterprise is an organization that uses commercial strategies to maximize financial, social and environmental benefits. The firms struggle to get social enterprise mark. For the purpose, they create smart social and environmental goals. The company has fixed ratio to invest back in the business and rest to distribute among the stockholders. There is a sum to spend on CSR activities too (Connolly & Kelly, 2011). An example is Olympic ring analogy. There are a few rings and every coloured ring donates different meaning. The brown ring represents charity activities, yellow coloured ring is for trading charity, and black coloured ring reflects distinctive impact on private to public sector. The international, large scale firms focuses on social objectives more. They give priority to their stakeholders and arrange several activities for their stakeholders. Apple and Facebook are among those international companies. It is clear to note that generalization is difficult for the overall impact gained by innovative capacity in the context of using social enterprise business (Cowie and Jones, 2017).
The government has complete right to interfere in business processes to stabilise and speed up the economic growth of the country. The government can impose certain taxes on different industries with respect to their size, i.e. small, medium and large enterprise. There are different types of environmental taxes to save the environment. It can impose tax on usage of finite resources to generate energy. Other than this, agricultural taxes, road taxes and fuel taxes are the common ones in UK. Apart from these, the government can offer special privileges to help the firms create addition incentives. In order to implement these taxations and rules, there is additional legislation.
That additional legislation regulates the firms and its workers to work according to the standards set by the government. If any firm as whole or the any employee violates any law then there are many punishments. The firm may experience elimination from the market too. The function of additional legislature is to publish regulations and then oversee the industries. In addition to these, create an accountability of for firms. Ofcom is an example of such legislature. It regulates telecom industry and resolve industrial issues. The Health and Safety Act is another example of legislation that regulates health and security of the workers at the workplace. Another legislature is Consumer Protection Laws. It is formed to protect consumers’ interest from the leading businesses.
Nowadays, application of global businesses to expand and reach every inch and corner of the world has been easier. It helps to gain additional profitability and advancement for the firm, especially for telecom and transport industry. Multinational business operations and shared currencies are widely practiced to boom in the global markets. It is encouraging privatisation directed at the firms are becoming highly consumer centric. Globalization opened a number of opportunities for the businesses including higher profits, advancement, economies of scale, and exposure to new markets etc. There is steady increase in the global GDP level due to higher trading of merchandise.
China is one the developing states and has captured 16% of the market with its exports. China is using economies of scale and better transportation facilities to reduce its cost and get more profit during foreign trade. Firms working at global scale are contributing a vital role in unifying objectives. These organizations are formed with some objectives and then the states that are part of those organizations, work as a team to achieve the objectives. The BRICK is an international organization that includes India and China. Both the states are holding the leading growth rate of 7% per annum and year per year it is increasing. These international bonds negatively affect the local market of the states. An example is Global banking and finance credit of 2008. It decreases the liquidity across the South East. Firms can be using multinational operations worldwide and they provide quality products to their customers. Telecom and IT sector has recorded exceptional growth within the last decade. Here, the global trading partners solely depend on the regional markets for the low cost production of the goods.
The PESTEL analysis helps to understand several external factors that act as a standing pillar for the firm. The pillar can play supportive part for the business or the barrier for the business. Therefore, right analysis is important to understand the market. Every region has set of opportunities and threats. The intelligent entrepreneur exploits the opportunities and eliminates the threats. It can make use of right PESTLE analysis is Psychic Proximity. It is used in UK and US because of similar traditions, values and languages.
The steady network of international firms helps an entrepreneur to learn about and acquire valuable resources. There is uneven division of resources across the geographic regions of the worlds. Thus, the firm should target right region to exploit opportunities and use them in the favour of the firm. The international subsidiaries give knowledge acquired by the firm in bid to expand towards right direction. In contrast to it, it requires huge investment and greater risk at the same time.
The global expansion is planned beforehand, to stay proactive across economies. The firm need to perceive the risk and accordingly plan its business activities. IE is related to protective while opening to the open opportunities. There is risk in the expansion so, the firm should not involve in passive process. Currently, there are many entrepreneurs who are enthusiastic to start their business and expand it worldwide. They have better strategies and tools to analyse the market as compared to past entrepreneurs. Now, there is advanced technology that enables the users to forecast the future but they lacked technology availability in the past.
The world is driving for more knowledge economy. The growth reflects quality, quantity and accessibility to data relying on traditional production setup. The human knowledge is making and incorporating in different machines. These machines further helps to generate wealth for the firm and the country. The knowledge economy emphasises on direct link between knowledge and economic growth. The firm can make better use of technology to generate more profits for the firm. Some of the primary industries that are linked to knowledge economy are IT, marketing, education, consulting and R&D etc. This type of economy uses outsourcing in business processes. Nowadays, it is encouraging large number of entrepreneurs to become self-employed. The entrepreneurs are making start-ups and new businesses. They are employing many workers throughout the world and stay task oriented. The traditional organizational setup needs proper workplace but working advancements have somehow eliminated that factor to start the business. The young entrepreneurs who have earned more than $1 billion are named as ‘Unicorn’.
According to ONS 2018 report, the start-ups in UK have reduced in 2017 to 382,000 with the birth rate of 13%. In previous year, the business birth rate was 14.6%. The death rate of the business was 10.2% in 2017 which was 12.2% in 2016. The North West of UK remained the strongest area with 15.6% business birth rate but London was reported with most business deaths of 14.2%. The South West of UK experienced the lowest birth rate of 10.6% with 12.6% death rate of the business. The reasons for lower business birth rates and higher death rate of businesses in UK are subject to political issues and the Brexit deal. Apart from these, there are many other challenges for the new businesses and existing businesses. There is fea wars, regulations, and world economic turmoil etc. Previously, the September 11 attack have had disturb growth of the UK and it had negative on financial liquidity.
The employment level is based on the age of the employees. The workers are willing to work but they are near to retiring age. In modern times, there is need of skilled labour that is able to boom economic growth to maximize the profit for the firm. In another view of unemployment it is when there are under age people and are willing to work but the firm cannot give them any job due to working regulations. Unemployment of the business ranges from different types. Frictional unemployment occurs when the people are between work and the economy is trying to match people with right jobs. Secondly, the structural unemployment occurs when the set of given skills are no longer needed in the economy. Thirdly, the cyclical unemployment is the worst case. In this case, there is no demand of the worker even if the worker is producing the best because economy is moving slow.
The government efforts can reduce unemployment rate by improving the working conditions and eliminating economical inefficiencies. Addition to this, the government should impose fewer taxes on the population. When there will be fewer taxes, the entrepreneurs will make start-ups more frequently. Apart from these, there should be less inflation rate. The customer purchases household products and spend less on other products. Thus, the businesses suffer a lot and the higher inflation rate negatively affects the economy of the country too.
There are different market structures but there are a few suppliers that work monopolistically in UK. An example is South West Water Company that provides water and sanitation facility to the locals. There are some perfectly competitive markets too. In this, there are number of sellers along with distributors in perfectly competitive economies. Addition to this, there is minimum entry barrier to the market. An example is barber shop. There are number of barber shops in UK and there is minimum entry barrier to enter into the venture.
Economic growth of UK is developed for several businesses. Oceans gate is one of them. It is first enterprise marine zone with an area of 35 hectares. It seems one of the active ports for trading purposes along with day by day, its efforts are increasing. Another example is the Enterprise Zone of the South West. The businesses get discount rate for five years term. They provide further investments for the businesses including plant and machinery projects. Apart from these developments, South West has HOTSWLEP with single point of access. It provides information of financial nature to the businesses.
The essay has discussed the issue faced by the new businesses and existing business in the market, regardless to size of firm i.e. small, medium or large. The globalization has helped the entrepreneurs to expand their businesses across borders by providing necessary tools. The entrepreneur has huge impacts start and then retain the business in South West too. It is crucial for stakeholders. The essay contains the example of the firms that pay attention on ethics and CSR activities and has several examples from national and international context.