The Business Environment P1 and P2

The Business Environment

I have been asked to write a report, based on an investigation I have undertook on two contrasting businesses. Throughout this report I will be discussing what each business does and how they run depending on which business sectors they are in. I will also be discussing the different stakeholders and shares based on each individual business.

I chose H&M which is a retail store, in which they sell clothes and accessories to the general public. They are very well known and highly rated by many shoppers and focus on selling their items. The type of ownership H&M have is a Public Limited Company (PLC) this means that H&M is a company whose securities are traded on a stock exchange and can be bought and sold by anyone. Public companies, by law, have to produce and publish their complete and true financial position for investors to view. There are a lot of benefits with being a PLC company such as shares are able to be sold to the public which boosts a company's capital. There is no limit to the number of stakeholders which means the company can raise large numbers of capital. However there are disabilities such as a number of legal formalities which can be costly and very time consuming. With the business expanding, being a large store such as H&M, the original owner may lose control. They could be 'bought out' by another company or overtaken by another person. There must be a minimum of 1 shareholder and 2 directors.

They have limited liability; this means that all personal savings and luxuries are safe if the business was to go bust. It is part of the private sector which means that it is the part of the national economy made up of private enterprises. In the economic sector, H&M comes under tertiary. This sector includes banking, insurance, delivery services, health services, education, etc. All of these provide a service and H&M's service is to sell products to its customers. The scale of this business is Global as it has stores in Asia, Europe, Middle East and North Africa, North and South America. The main purpose of H&M is to provide a service for its customers. As it is a clothes and accessories shop, it focus's highly on the latest fashion trends and looks etc.

www.just-style.com/news/hm-gets-approval-for-1155m-retail-investment-_id119932.aspx 04/12/2013 This news article shows how H&M's aims to expand their business has been successful in India. It was aimed to attract investments. The new store will bring more job opportunities to the people of India and help to contribute to their economy.

The other business I chose was a local beauty salon called Indulgence; they cater for beauty products and provide a service for you. As this business is ran by a sole trader, there is only one individual running it, regardless of how many employees work there. It is a sole trader business, this means