Level of influence
Conflicts of interest
The government’s interest in littlewoods is to get full employment. The government has also got a high interest in tax increase.
The employees therefore have a different level on interest on the company, as the employees will want a good high wage and job security. The employees also want low tax cut as this will mean the employees will have a higher wage, which will also mean that the employees will have more money to spend.
The shareholders interest on the business is for the company to make high profits as this will mean the shares will increase.
The customers interest on the business is total different as the customers want the goods to be cheap and for the quality of the goods to be at a high level.
Trends in retailing
- Retailing is affected by changes in consumer demands, this is affected by two factors these are the disposable income of consumers and consumer confidence about the future. Disposable income is the Amount of you money you have after paying all the taxes, national insurance and essential bills such as rent mortgage, council tax and money that has been spent on fuel and food. If however you receive a raise and the bills that are being paid stay the same this means you will have more money than normal. If more money is being received this will mean that you will become richer and this means you will have more money to spend on things like holidays and buying goods. If you have a job that you know is not stable and you could be told too leave it is not very wise to spend all the money that has been earned. If you have a very secure job that you know is permanent it is safer too spend your money to a certain extent.
- Consumer demand is also affected by interest rates. If these interest rates rise this will mean that mortgages and loans will be more expensive. This will mean that you will have less money too spend, however if the interest rates were too falls this could mean you would have more money too spend.
- In 1997 there were 319,000 retail out lets in Britain employing over 2.25 million people. Sales were valued at nearly £200,000 million. Consumer spending over four years. Consumer spending has risen steadily over four years. During 1998 and early in 1999 some retail outlets were under pressure. Marks & Spencer’s shocked everyone by announcing a serious fall in profits. Other retailers also faced difficulties after poor summer sales and low consumer spending at Christmas in 1998. However by the middle of 1999 sales were starting to improve, mainly because steady cuts in interest rates gave consumers more to spend.
- Despite difficulties, many retail outlets have steadily expanded and taken on more staff. Tesco announced it intended to create 10,000 jobs during 1999. More large out-of-town shopping complexes were opened such as Cribbs Causeway, Trafford Park and Blue water park, to add to existing centres such as Meadowhall, Lakeside, and the Metrocentre.
- Staff in retailing is often employed on a part time, flexible hour’s basis and many are women. Superstores are now open 24 hours a day and 7 days a week in many areas
- Mail order shopping has also increased. Many small organisations find it more cost-effective to sell their goods by mail order than to have premises in an expensive towns and city centres. The next directory is a good example of this and the next directory was a great success. This kind of retailing is when you get a catalogue choose what you want and then ring up and order the thing you want. Retailing over the Internet is also very popular. Prices over the mail and internet can be expensive but still people do not bother as there is a credit scheme which means you can buy now but then pay when you can or even you can pay in instalments. Even though you will be paying in instalments people do not notice they are paying a lot of interest on top. Because this type of shopping is very popular city centre shopping areas are not making as much money. This can lead to a very big problem where many councils will try to stop this by offering free parking or try reducing rents to small businesses and market traders.
External influences
The external influences that have affected littlewoods are
Foreign competition
New methods of retail i.e. Internet, Tele sales
Consumer demand
Foreign competition
This means that because people are buying abroad for various reasons such as cheaper goods. Because more and more people are buying abroad this means that littlewoods are having less sales. This affects the company quite badly because the figures of income are going to be more low. Because Littlewoods is a family owned business and it doesn’t have any stores abroad littlewoods find it hard to compete with foreign companies.
New methods of retail
The number of people leaving their house to go shopping is decreasing by the day as there are other ways of shopping e.g. you can purchase things go the Internet. This way of shopping is going through the Internet. If you do shop of the Internet a delivery is inclusive of this sale. You will need a credit card for this type of shopping, as the money will be debited from the account. Telephone sale is also similar to Internet shopping, as credit card details will have to be given in order to purchase a product.
Consumer demand
This means that there is less demand for the products that littlewoods is selling. This again will also affect the company a lot as if no one is buying the products that is sold there will be no money coming into the business.
Industrial sectors
Trends in the industrial sectors
The trends in the industrial have changed a lot over the years, and also over the world. About a decade ago in England no one knew what a burger and fries is. Today, therefore the burger business has expanded hugely. In some countries where fast food doesn’t exist, even this has grown rapidly.
The primary sector
The primary sector is involved with producing or obtaining raw materials This means extracting natural minerals such as coal and gas or hunting for animals or fishing only small businesses operate in this section there are three sections in this sector. The three sections are;
Section A Agriculture, hunting, forestry
Section B Fishing (includes hatcheries and fish farms)
Section C mining and quarrying (includes coal mines, oil and gas
Extraction, quarrying, salt production
The secondary sector
The secondary sector is involving manufacturing, processing, assembly and construction. This mostly relates to a paper mill, a carpet factory, a shipyard and a house builder are all found in this sector. These are the sectors that are involved in the secondary sector
Section D All manufacturing industries
Section E Electricity, gas, steam, and water supply industries
Section F Construction
Tertiary sector
The tertiary sector is often called the service sector; it includes all the providers of services to businesses and to individuals, and can be divided into four sections.
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Public services (including administration, defence, health, education and personal services such as hairdressers.
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Financial and business services (including banks, insurance companies, advertising, law, accountancy
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Retailing, distribution, hotels and catering (including shops, distributive services, inns and pubs, fast-food outlets)
The sectors that are involved in the tertiary sector are
Section G Wholesale and retail trade
Section H Hotels and restaurants
Section I Transport, storage and communication
Section J Financial services
Section K Real estate, renting and business activities
Section L Public administration and defence, compulsory social security
Section M Education
Section N Health and social work
Section O Other community, social and personal service activities
Section P/Q Private households with employed persons, extra-territorial organisations and bodies
Graph to show UK output by sector, 1989-97
Littlewoods and Mirza business is in the tertiary sector. As I have said in report one. There is a huge increase in tertiary sector. This is happening because people in the primary and secondary sectors know that there isn’t a demand for the goods. This is due to a lot of importing. From this occurring it means that the majority of people who are leaving the primary and secondary sector are opening their business in the tertiary sector. Although Mirza newsagents are the two businesses are different. Littlewoods has more than one delivery a week; Mirza only has one delivery a week. This is because more goods get sold at Littlewoods in a day than Mirza sells in a week. Littlewoods has changed a lot over the years as it has gone much bigger. Littlewoods used to only have one store based in the city centre but now it has expanded and has another store based in Coventry City centre. Saying this even Mirza newsagents has expanded, Mirza has now until recently has started to sell alcohol in his store.
Business activities
For Littlewoods their main activity is to make as much profit as possible. By selling all the goods that Littlewoods do it ables to meet this activity.
Identifying the core activity
For some businesses they want to do even more or increase their income. Foe example Mirza is a newsagent but has gone on to selling alcohol; this is only aimed at the older generation. Littlewoods sells household goods, clothing, electrical goods. These goods are aimed at all ages. If Littlewoods was to sell alcohol it would mean that older people could only buy it, this will affect Littlewoods, as they may not be a demand for alcohol.
Changing the core business activity
It is very easy for a tertiary sector business to change their business activity. Therefore the primary and secondary sectors cannot. Because Littlewoods is in the tertiary sector (selling a service to the public).
There are many things that could affect a business like Littlewoods in the tertiary sector. There are things such as TAX. If tax increases it would mean that people would have a less income this will lead to people spending less money in shops like Littlewoods. It would not affect Mirza as much as Littlewoods. This is because the goods in mire’s shop haven’t got a huge value unlike Littlewoods. There are also other things that could affect stores such as Littlewoods. Things such as social trends, competitors, and level of spending.
There is not much competition for Littlewoods as it based where not other store that sells these goods is. Littlewoods also has good opening hours which means that the customers can visit this store throughout the day.
Influences on business
Every business should know about the things around them. All business should know about the influences and trends in the sector. Every business including Littlewoods and Mirza needs to change to survive. If a business does not know about the influences and trends in the sector the business is likely not to survive and not be successful.
Location of a business
It is very important that a shop should locate itself in a good location where there will be a lot of potential customers to earn a lot of revenue. Like Mirza newsagents, very business will look out the location before purchasing premises. E.g. most newsagents are based in local neighbourhood where they know that there are no other shops in site and if a customer was gonna buy from someone’s he/she would have to travel by car. Location again is very important for many things such as
Staff to work in the shop
This means that all the staff should be local. All the staff in Mirza newsagents is local and they all travel by foot. This is good because it is unlikely that the staff will get late because it is not far to travel and they will not get stuck in traffic.
Customers
All Littlewoods customers are no locals. The customers that visit the shop are different everyday. I suppose this is good in a way. Meaning that if it was the same customers everyday they wouldn’t always buy the same thing more that once. But with different customers coming in everyday they are likely to buy something.
All Mirza newsagents’ customers are local. This is very good because all the people from the neighbourhood will be coming into the shop to buy goods that is purchased on a day to day basis such as bread and milk. Because all the customers are local Mirza has got to know them. All the money is paid in cash, this means that no one will get into debt will Mirza. Even if someone does not have the correct amount of money it will mean that the outstanding amount can be made at another time.
Labour supply
It is always good that a company should have staff that is local. This is good because if staff is needed all the company has to do is ring them up and ask them if it is possible for them too work therefore the employee will get to the shop very fast. Littlewoods has to be very careful about who is employed not for their skills but for the location of where their house is. It doesn’t matter that much but it is always sensible to employee someone who lies close to the city centres. Because all of Mire’s staff is local he never has a problem getting staff in when he wants them.
Local skills
For Mirza and Littlewoods it is not that important about skills when looking for an employee. If an employee is employed training can be provided afterwards. If there was going to be a specialist shop open it would mean that trained staff is necessary. If you would want to open up a business making pottery it would be sensible that it is opened in the midlands, therefore it would not be that sensible to open it up in the middle of the London city centre this is because London is more known for it financial side and not pottery side.
Transport links
A large manufacturing company is always careful as to where to open the business, as many angles have to be considered e.g. how the goods will be delivered to the customers, and how the goods will be delivered to the store. That is why a lot of the large organisations have stores on the motorway this is so that the goods can be distributed independently. For my sole trader business it doesn’t really matter about transport links, Littlewoods and Mirza has good access to the city centre, this is good as most of the goods are delivered from the city centre. Although Mirza also makes regular trips to the cash and carry, which are based in the city centre.
Conclusion
Although the two businesses are in the tertiary sector the two businesses do have differences. Mirza newsagents is a very small business and it is not a nation-wide business therefore Littlewoods Ltd is. Both of the companies are family run businesses and members of the public do not have shares. Both of the companies sell goods and do not offer a service, but both of the companies sell different things. The customer’s influence on the business is yet the same. Because Littlewoods Ltd is a large company the store doesn’t know the customers as much as Mirza newsagents. If Mirza newsagent loses a customer they will be affected a lot as the only customers that go in are regulars, but if Littlewoods loses a customer they will not notice as hundreds of customers visits the stores a day.