Business Purposes of companies in different sectors of the economy.
UNIT 1 - Business Purposes
Task 1
Primary - ArcelorMittal
ArcelorMittal is a global steel company. This operates more than 60 countries over the world, their main headquarteris in Luxemburg. ArcelorMittal is market leader in steel use for automotive, construction, household appliances and packaging, as well as sizeable captive supplies of raw materials and distribution networks. It was established in 1989 by Mr Lakshmi N. Mittal, the chairman of the Board of Directors and Chief Executive officer of ArcelorMittal. The company has experienced rapid and steady growth since the strategy was set has worked well accordingly.
Then in year 2000 the company's business assistance signs a deal with South African company called Iscor. The agreement is decided that to provide over three years of period in exchange for Iscor shares also provide certain cost saving. Key financial for 2007 shows the revenue of US$105.2billion, with crude production of 116million tonnes, displaying around 10% of the world steel output. Recently in January 2011, ArcelorMittal has the division split off from stainless steel as new company Aperam takes.
The purpose of ArcelorMittal is to research and make development, which has four dedicated Laboratories in the United States and Europe, is to present them in action in increasingly competitive solution. The company's primary goal is to stay ahead of the curve, anticipating the environmental, safety and cost control issues facing the automotive sector and staying effective and sustainable.
ArcelorMittal has share ownership. As in 2009, the aggregate beneficial share ownership of ArcelorMittal directors and senior management (31 individuals) total of 1,887,008 shares.
ArcelorMittal is a public limited company; the company has number of stock exchange in the New York, Amsterdam, Luxemburg and Paris etc. as its public limited company and receive a division for their investment. The company employs more than 263,000 people worldwide, so this makes them large organisation.
There are several advantages regarding public limited company. Public limited company schemes allow you to be part of their share that you invest. Firstly, you can invest as much money as you want there's no maximum or minimum amount you have to pay, so this makes it affordable for the first buyer. There's a division of profit depending on the investment you have made.
As well as having many advantages of public limited company they also have disadvantages. The first thing is that legal formalities are compulsory required they are very time consuming and costly. In order to protect the interest of ordinary people there are strict controls and regulations to comply. These companies have to publish their account details, so everyone can see that how many people invested and what profit did they make. Public limited companies are huge in size and this may make them face management problems such as making slow decisions and industrial related problems.
Secondary - Dyson
Dyson is a British appliances manufacturing company, their main products are the vacuum cleaners that has cyclonic separation. This company was founded by James Dyson in 1992. James Dyson says that this was really frustrating before inventing because it didn't work properly. Then they figured out after sketchingand doing prototype designs from 1979 to 1984. Their first prototype vacuum was G-force, built in 1983. In 1986 G-force was first sold in japan. Dyson became licenced after becoming really famous in 1993. Dyson Company opened a research centre and factory in Wiltshire. After the massive ...
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Secondary - Dyson
Dyson is a British appliances manufacturing company, their main products are the vacuum cleaners that has cyclonic separation. This company was founded by James Dyson in 1992. James Dyson says that this was really frustrating before inventing because it didn't work properly. Then they figured out after sketchingand doing prototype designs from 1979 to 1984. Their first prototype vacuum was G-force, built in 1983. In 1986 G-force was first sold in japan. Dyson became licenced after becoming really famous in 1993. Dyson Company opened a research centre and factory in Wiltshire. After the massive hit of Dco1 thecompany developed more and more. Dyson Dc07 in 2001 was also very famous because it has seven smaller funnels at the top of the vaccum.
Dyson purpose is to develop the next generation of Dyson technology at research, Design, and development Laboratories. They are looking for bright and talented people to work with them and help them create something new.
Dyson is a private limited company; they have very less investor as its private limited.
The advantage of private limited company is that they have limited liability this means that if the company experience financial distress because of normal business, the owners of company would not be at risk of losing their personal possessions. The company does not have to publish their account details as well as they are private limited company they can keep it secret.
The disadvantages would be that because the company has very less shareholders, the growth of business would be limited. The private shares cannot be sold or transferred to anyone else like the public limited would do.
Dyson has more than 2.950 employees in the nation; this includes all the scientist and engineers.
Tertiary - K1 Tyres Ltd.
K1 tyres are mechanics that specialise in repairing and servicing cars. They are located in east London (Essex) Ilford. They are voted in business of the year from past five years by the local businesses. They have large number of variety in the range of alloy wheels to fit wide number of cars. They provide branded alloy wheels for the cars.
The purpose of this business is to make profit from providing service to the car owners. They are private limited company, as they are privately limited they cannot sell their share to the public as they have limited liability.
A limited company is deemed to be a separate legal entity from its owners. This has several advantages, including the fact that the company will exist beyond the life of its members. If they retire or die, the company will continue to exist and operate. This ensures security for employees and other members.
In private limited company sometimes disputes will arise between Directors and Shareholders as their ideas of what is best for the company vary. Sale of shares to increase company funds will further dilute the management, as more and more people have a say in how the company is run. There is also a risk since Companies can buy shares that a takeover might occur this way.
They employ more than 15 people. They belong on local scale as they don't do anywhere else than east London. They belong in the tertiary sector.
Tertiary - Next Plc.
Next is a retailing store all over the UK, Ireland, and other countries around the world, they do clothing, accessories, and footwear and home products. The company was founded by Joseph Hepworth in Leeds 1864 named as Joseph and sons tailoring, then in 1982 the company Next was founded. In 2009 next launched its first online catalogue. The company's chairman is John Barton.
Next main purpose is to make profit by selling their clothes, accessories, footwear etc. This helps them to pay their shareholders during their financial year. Next is a public limited company which has shares listed in London stock exchange. General public can buy share and receive division depending on their investment. The company employs more than 55,000 people therefore it makes them large organisation.
The advantages of public limited company are that companies are able to raise funds and capitalize through the sales of their securities. This is the reason public limited companies are important: prior to their existence, it was very difficult to obtain large amounts of capital for private enterprises.
A private limited company has no authority to communicate with the public limited company, if any financial information; such information could be useful to competitors. Private limited companies are less likely to get information leaked to competitors, and they tend to be under less pressure to meet quarterly projections for sales and profits.
Task 2
Primary sector
The primary sector of the industry involves changing natural resources into primary products, this involves extracting raw materials from the ground and then packaging and selling it, an example of a business that operates in the primary sector and which operates McDonalds which operate regionally they also extract raw materials form the ground like potatoes and then they turn it into food and cook it then they sell it, they also operate regionally because they have many of their restaurants in a lot of countries like the UK and the USA and china, they also extract many of their food in one country and then they export it and sell it in other countries. Another example of a company that operates in the primary sector is john Lewis whom operates nationally, they do this because they extract raw materials like leather and wool from the ground so that they can and they sell it so this is why they are in the primary sector. An example of a business that operates in the primary sector and operates locally is a local farm which operate in the primary sector, they operate in the primary sector because they do many thing like mining and growing crops and vegetables and milking cows this makes them in the primary sector
Secondary sector
The secondary sector of the economy manufactures finished goods. All of manufacturing, processing, and construction lies within the secondary sector. Activities associated with the secondary sector include metal working and smelting, automobile production, textile production, chemical and engineering industries, aerospace manufacturing, energy utilities, engineering, breweries and bottlers, construction, and shipbuilding.
Tertiary sector
The tertiary sector of the economy is the service industry. This sector provides services to the general population and to businesses. Activities associated with this sector include retail and wholesale sales, transportation and distribution, entertainment (movies, television, radio, music, theatre, etc.), restaurants, clerical services, media, tourism, insurance, banking, healthcare, and law.
Task 3
The Government plays a major role in businesses they make the rules and frameworks in which businesses are able to compete against each other. From time to time the government will change these rules and frameworks forcing businesses to change the way they operate. Key areas of government policy that takes place into business are:
Economic policy
A key area of government economic policy is the role that the government gives to the country in the economy. From 1945 and 1979 the government increasingly get involved in the economy by creating the country run the industries which usually took the form of public corporations. However, from 1979 onwards we saw an era of privatisation in which industries were sold off to private shareholders to create a more competitive business environment.
Another area of economic policy this relates to the interest rates. In this country the level of interest rates is determined by a government. A rise in interest rates raises the costs to business of borrowing money, and also causes consumers to reduce expenditure (leading to a fall in business sales).
Taxation
Taxation in the United Kingdom involves payments to a minimum of two different levels of government: this is the central government (HM Revenue and Customs) and local government. Central government revenues come primarily from income tax, National Insurance contributions; value added tax, corporation tax and fuel duty. Local government revenues come primarily from grants from central government funds, business rates in England and Wales, Council Tax and increasingly from fees and charges such as those from on-street parking.
Government spending policy
This are the spending made on things like education, health care services and pensions etc. If the government spends more on schools, this will increase the income of businesses that supply schools with books, equipment etc. The money for the spending's comes from the tax paid by the businesses, public and etc.
The government has prevented people from becoming homeless through welfare, unemployment compensation, health care service etc. The government provides training programs for people on welfare to help them get to work, tax benefits for companies that hire people on welfare, and convicts, and tax credits for people that work. The government has given tax incentives for businesses to hire. The government creates infrastructure that allows for people to travel from place to place quickly, fire protection, police protection, etc. The government has also created agencies like the jobcentres so people can find jobs from there and start working. The government does this for the businesses to get more productive workers that possess a wider range of skills.
The Characteristics of local businesses (Newham).
Newham has developed massively there are number of changes made in this years as now the 2012 Olympic games are also coming up. The government plays a huge role in this to help the businesses make growth. Business rates are pooled by central government and redistributed to local authorities according to the number of people living in the area. The money, together with revenue from council tax payers, revenue support grant provided by the Government and certain other sums, this are used to pay for the services provided by your local authority and other local authorities within the area.
Now the government has also carried out a new scheme called the regeneration this scheme is basically about developing Newham by making various changes such as more businesses opening in the areas. The government is providing too many opportunities for the businesses in 2012. There's a website created called CompeteFor, simply get registered free then they will be giving you opportunities about what you can do in 2012.
Green Street is alive with many shops, restaurant and the sights that reflect Newham with the cultural diversity, innovative style and boundless energy. Green Street ranks up to 400 shops selling everything. This makes a big tourist attraction on its own. There are things you can get from all around the world, with Asian food, fashion clothes, jewellery. There's queens market as well which has many stalls selling spices, fruit and vegetables and other stuff like Indian ware.
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