Assignment front Sheet

Qualification

Unit number and title

01. Business Environment

Business
Student name

Assessor name

Muhammad Waleed Ahmad

Abroo Asad

Date issued

Completion date

Submitted on

15th October 2015

15th December 2015

15th December 2015

Assignment Title

Organization and Business Environment

Learning
Outcom
e

Learning
Outcome

Assessment
Criteria

LO1

Understand
the different
approaches to
quality
management
appropriate to
commercial
operations

1.1

LO2

LO3

In this assessment you will

have the opportunity to
present evidence that shows
you are able to:
identify the purposes of different
types of organization
describe the extent to which an
organization meets the objectives
of different stakeholders

Task
No.

Evidence
(Page
no.)

1(a)

1(b)

1.3

explain the responsibilities of an

organization
and
strategies
employed to meet them

1(c)

4-5

Understand
the benefits of
quality
management
in a
business and
services
context

2.1

explain how economic systems

attempt to allocate resources
effectively
assess the impact of fiscal and
monetary policy on business
organizations and their activities

1(d)

1(e)

2.3

Evaluate the impact of competition

policy
and
other
regulatory
mechanisms on the activities of a
selected organization.

2(a)

7-8

Understand a
range of
quality
controls and
how service to
the customer
can be
improved

3.1

explain how market structures

determine the pricing and output
decisions of businesses

3(a)

9-10

3.2

illustrate the way in which market

forces
shape
organizational
responses using a range of
examples

3(b)

11

3.3

judge how the business and

cultural environments shape the
behavior of a selected organization

3(c)

12

Student Name:
Assessor Name:
Waleed Ahmad

1.2

2.2

1
Business
Environment

Abroo asad

LO4

Be able to
apply the
principles of
quality
management
to improve
the
performance
of an
organization

4.1

discuss
the
significance
of
international trade to UK business
organizations

4(a)

13-14

4.2

analyze the impact

factors
on
UK
organizations

of global
business

4(b)

14-15

4.3

evaluate the impact of policies of

the European Union on UK
business organizations

4(c)

16

Learner declaration
I certify that the work submitted for this assignment is my own and research sources are fully
acknowledged.
Student signature:

Student Name:
Assessor Name:
Waleed Ahmad

Date:

2
Business
Environment

Abroo asad

TASK 1 SCENARIO 1
Based on the above scenario prepare a written report that addresses
the following tasks.
Explain why some companies are set up in public sector? Also discuss
the impacts of these in an economy?
Public sector is that part of the economy which is required to provide basic
government services, which includes such services as, military, public transport,
police, primary education, health care for the poor etc.
In the public sector, the government owns the organizations and the businesses. The
main aim of these organizations is to provide basic services for the members of the
general public.
There are numerous reasons that why some companies are set up in a public sector,
shares can be advertised and sold through the stock exchange, its easier for companies
to borrow from the banks they have government back up, the shareholders have
limited liability, there is cheaper borrowing and bulk purchasing, there is less
competition, more chances of diversity in growth, all the profits and losses are equally
shared.
PSO (Pakistan State Oil) is a public limited company, it can raise its capital by
advertising its share that means more people will see it and might invest in it. The
shares can be sold through the stock exchange; it is open to general public not only
the people who get invited can buy its share. Its also easier for PSO to borrow from
The banks, the banks know that they will get their money back with interest as they
have government back up, in the same case its difficult for companies which are set
up in a private sector to raise its capital such as the companies in the public sector.
The shareholders have limited liability, which means that they are only liable for the
money they have invested in.
The public sector contributes in various ways to the economy. It helps in economic
development through creation and expansion of infrastructure. Many job opportunities
are created through the merging projects of the government for example building of
an airports, roads etc. it also ensures equality of income, wealth and a balanced
regional development of small, medium and cottage industries, this increases the GDP
and helps in improving the economy. It also ensures easy availability of goods at
Student Name:
3
Assessor Name:
Waleed Ahmad
Business
Abroo asad
Environment

moderate rates; this helps the general public to maintain their living standards and
ensures equality amongst the general public.

Student Name:
Assessor Name:
Waleed Ahmad

4
Business
Environment

Abroo asad

Identify the different stakeholders in this airport project? Explain

the disadvantages to any two stakeholders of this project?
People or groups of people who can be affected by, and therefore have an
interest in any action by an organization. The stakeholder theory or stakeholder
concept is that there are many other parties involved and interested in business
activity and that the interests f these groups local communities, the public,
government and pressure groups, such as environmental lobbyists should be
considered by business decision makers. It is the view that business and their
managers have responsibilities to a wide range of groups, not just shareholders.
(Stimpson and Farquharson, 2010)
The main stakeholders of the business can be the customers, suppliers, employees,
local communities, the government and its agencies. The business activities and its
decisions can have an affect on stakeholders. The stakeholders can have a positive and
negative affect by the same business decision.
The stakeholders of the airport project are the local private company (investors),
workers, government, 200000 people living in the rural area, industries, lush green
forest which is a national heritage site.
This airport project would affect the rural community and all the 200000 people living
in it. This project will make these people homeless and they will loose their source of
income and jobs. Unemployment of industry workers will affect them heavily, as
theyll suffer huge loss and at some point they have to be shut down. Another
disadvantage of this airport project is that the lush green garden, which is a natural
heritage site would be destroyed which would affect the image of the nation, as its
traditional and cultural values regarding the heritage site would be depleted with it.

In your opinion does this project contribute positively to economy

and how can it ensure desirable allocation of resources?
In my opinion this airport project will contribute positively to the economy though it
will cause the previous industry to shutdown but relatively it will create high
employment, there will be better infrastructure, transportation and economic and
social development in the area. The airport will be used as an asset to transport
infrastructure, employment be created and it will be used as a commercial activity
Centre.
The government wants the private sector to invest in the economy by facilitating the
local company in the construction of the airport. The government is doing this in
order to ensure stability in both the public and private sectors. A mixed economy is
Student Name:
Assessor Name:
Waleed Ahmad

5
Business
Environment

Abroo asad

whereby an economy comprises of both the private firms running in the business
sector and in the public sector. They have the same limited resources provided by the
government, and the private sector would deliver products to an economy, and attempt
to accomplish benefit amplification by offering at the least expensive costs and most
minimal expenses; they create a ton of demerit goods. While the public sector will
deliver products that they believe are required by the government and that the average
citizens would advantage by devouring them, they create the merit goods. Resource
allocation is the most effective allotting limited resources and products to their right
territories and firms, so they can be sold productively. Both the private and public
sectors affect resource allocation.

Analyze whether resources are allocated more efficiently in private or

public sector?
Private sector is comprises business owned and controlled by individuals or
groups of individuals, whereas, public sector comprises organizations
accountable to and controlled by central or local government (the state)
(Stimpson and Farquharson, 2010)
Allocation of resources is the analyzing and assigning scarce resources amongst the
producers and other various uses; this includes the opportunity cost, economic cost,
accounting cost and other costs of resources and services to attain maximum profit
and utilization.
The main parts of an economy are, human, scarce resources (natural) and capital. An
economic system ensures that all the needs and wants of a society are met. The
production of goods and services are determined by the limited supply of resources.
The government has to decide how to allocate the resources in public and private
sectors in order to meet the needs and to achieve maximum profit.
As demonstrated by budgetary masters, resources are successfully allocated by
extraordinary market that is in private sector. Resource allocation happens when an
industry gives the best measure of purchaser satisfaction and endures high profits in
the resources provided by the government. In like manner, in impeccable contention,
firms can enter the business part and drive expenses down and creation up to the point
where resource allocation is refined.
The government intervenes in various disguises in order to maintain a balance in
allocation of resources in public and private sectors. In most of the mixed economies,
the public sector is the larger part of an economy. The government provides services
from the taxes obtained from the general public.
Although in general resources are more efficiently allocated in a private sector but
without government intervention there are chances of fraud and mismanagement.
Student Name:
Assessor Name:
Waleed Ahmad

6
Business
Environment

Abroo asad

Efficient allocation of resources cannot take place in public sectors, as there is no

perception of rivalry present there, and profitable motif. Public sectors work more for
the welfare of the general populace, and concentrate more on the social benefits than
private sectors.

Differentiate between fiscal and monetary policy, also assess if its

feasible to implement fiscal policy to stimulate economic growth?
The pioneer of fiscal policy is the renowned British economist John Maynard Keynes.
Fiscal policy is the method a government uses to influence a nations economy. There
are two basic types of fiscal policy, the most widely used in the expansionary. The
government adjusts its expenditure level and taxes rates in order to maintain the
economy. The fiscal policy aims to improve unemployment rates, inflation; interest
rates and stabilize the business cycle. The second type of fiscal policy is the
contractionary. It is rarely used and is the total opposite of the expansionary fiscal
policy. Its main objective is to slow down the economic growth to decrease inflation.
The taxes are increased, government cuts its spending in order to battle inflation and
to maintain the economy.
Monetary policy is the method through which banks determine the size and growth of
money supply, which then affects the interest rates. It is maintained by adjusting the
interest rates, changing the amount of money the state bank are required to keep in the
vault and by buying or selling bonds to the government. Like fiscal policy, monetary
policy also has two types, expansionary and contractionary. In the expansionary
money policy the money supply is increased in order to decrease unemployment rate
and increase consumer spending to increase the economic growth. It is also referred to
as easy monetary policy. Whereas contractionary monetary policy is used to slow
down economic growth by decreasing the money supply in order to tackle inflation.
This causes the unemployment to increase and decreases the consumer buying and the
businesses investing money.
It is feasible to implement fiscal policy to stimulate economic growth. Take an
example of an economy that is facing recession, unemployment rate is high and the
consumer and business spending is low. The government will lower tax rates in order
to increase the economic growth. If fewer taxes are being paid, there will be more
money for the people and businesses to spend or invest in services etc., thus
improving the economy and gives the opportunity to government uses to increasing its
expenditure like building more highways, hospitals, airports, public transport etc. This
will create jobs and decrease the unemployment rate. This is also known as pump
priming, when the government decrease the taxes and increase its expenditure to
tackle recession and pumps money into the economy by increasing the consumer and
business spending. Though the government has to be careful while monitoring the
money flow, as too much money in the market can cause inflation, decreasing the
value of money and increasing the demand of consumer products and services.

Student Name:
Assessor Name:
Waleed Ahmad

7
Business
Environment

Abroo asad

Student Name:
Assessor Name:
Waleed Ahmad

8
Business
Environment

Abroo asad

TASK 2 SCENARIO 2
Write a brief note on the impact of competition policy and regulatory
mechanisms on companies like TESCO.
The main objective of the competition policy is to promote competition; make
markets more efficient and enhanced competitiveness of UK businesses within the
European union. It also aims to ensure the technological innovations, which then
promotes the dynamic efficiency in the markets. It also effects the price competition
between the suppliers. Competition policy also safeguards and promotes the interests
of consumers through the increased choice in products and low price levels.
There are four main pillars of competition policy in the UK and in the
European union:
i.
ii.
iii.
iv.

Antitrust and cartels

Market liberalization
State aid control
Merger control

The antitrust and cartels involves the elimination of agreements that restrict
competition which includes price-fixing and other abuses by the organizations who
hold a dominant market position.
Market liberalization involves the introduction of competition in the previous
monopolistic sectors of the market such as energy, supply, retail banking, postal
services and mobile telecommunications etc.
State aid control analyses the competition policy to aid measures such as airline
subsidies to ensure that such measures do not distort the level of competition in the
single market.
Merger control involves the investigation of mergers and takes overs between firms
for i.e. a merger between two large groups, which would result in their dominating the
market.
Regulators enforces rules that they are appointed by the government to oversee how a
market works and the outcomes that result for producers and consumers. The main
competition regulator in the UK is the Competition and Markets Authority. (CMA)
The EU competition commission is also a vital part for the UK.
Regulators work in such a way, they make laws to reduce monopoly power. They
prevent mergers that create monopolies. Regulators introduce laws that develop
competition in the postal services industry. They also force the sales of assets. Another
example of competition policy in action is that privatization takes place, transfer of
Student Name:
Assessor Name:
Waleed Ahmad

9
Business
Environment

Abroo asad

ownership. They also introduce tough laws on the competitive behavior. Strong laws
and punishments against the proven cases of price fixing are ensured. The
Companies that breach the EU and UK competition rules risk heavy fines of up to
10% of global turnover and the senior management can also be taken into custody.
They also make reductions in the import tariffs; it encourages cheaper products from
other nations. It also increases and eliminates import quotas so that they can get the
same effect. They allow new nations into the EU single economy, which increases
competition.
Tesco will be affected, as it is one of the top super markets in the UK. Liberalization
involves the introduction of a new competition and it will reduce the restrictions for
the newly setup businesses. This will not be a major problem for Tesco as they are
well established and operate in higher levels of the industry, which is considered a
powerful barrier. The major competitors of Tesco are Sainsburys, Asda and
Morrisons.
Tesco
almost
holds
35%
of
the
market
share.

Student Name:
Assessor Name:
Waleed Ahmad

10
Business
Environment

Abroo asad

TASK 3 SCENARIO 3
Based on the above case study write an essay no longer than 1000
words which addresses the following tasks
Explain how market structure determines the pricing and output
decisions of businesses?

Market structure is the total number of buyer and sellers in the market. There are
many different types of market structures; perfect competition, monopoly and
oligopoly.
Perfect competition is a market structure where there is a same product and have
different sellers and its price is determined by the demand of the product. The output
decision is determined by the demand of the product. It has a large number of buyer
and sellers. The firms in the perfect competition try to offer low prices to its
customers to increase its market share. The buyer usually set the prices of the
products. Firms are free to enter or leave the market at anytime.

(Ib-econ.wikispaces.com, 2015)

Student Name:
Assessor Name:
Waleed Ahmad

11
Business
Environment

Abroo asad

Monopoly is the market structure where there is a sole provider and its prices are
determined by the firm itself and the output decision also lies within the firm. The
customers will have to buy the product on whatever the firm decides to charge the
products price as they wont have an option of buying it from else where at a lower
price. The firm will also be bound to complete the demand of the consumers strictly.
Normally multinational firms have a monopoly in market structures.
Oligopoly is the type of market structure where there are a large number of sellers of
the same product. The sellers determine the price of the product; they may charge
same prices for their products. It depends on the customers from whom to buy from
and it also depends on the sellers that how they advertise their product and attract
customers.

(Economicshelp.org, 2015)

Student Name:
Assessor Name:
Waleed Ahmad

12
Business
Environment

Abroo asad

Market forces shape organizational responses. If the new change goes

through what new market segments will open up to these
entrepreneurial organizations and what are different approaches can
be adopted to target them?
The forces, which determine the price in an economy, are market forces. They can be;
demand, supply, employees, competitors, customers and the suppliers.
The demand will increase or decrease, accordingly the organizations are going to
respond to it. If the demand of the product increases, the organization will create more
employment in order to meet the demand of the product. They will be able to do so
because the cash inflow will increase giving the organization an opportunity to grow
and hire more workers. If the demand decreases, the level of cash flow will be low
and the organizations will be forced to cut jobs.
Specific competitive issues characterize each industry. Other organizations in the
same industry or type of business that provides goods or services to the same set of
customers are referred to as competitors. In a similar way Audi has many competitors
in the Chinese automotive market for i.e. Mercedes Benz. Audi will wage competitive
war against its competitors in order to maintain its repute and to give a challenge for
other competitors to sell their products. (Daft, 2006)
One of the factors that can determine a change in the Audi is its employee. If the
government has set wages, then the Audi must accept them and pay their employees
rightfully if they fail to do so the employees might leave their jobs and join another
organization. Apart from this every organization needs trained and qualified
personnel. Audi should establish training programs for their employees so that they
can catch up the growing the need for computer-literate knowledge, and to meet the
competitive demands of the borderless world.
The main aim of the organizations is to satisfy their customer by their products and
services. If any organization is lacking advancements in their products or dont adept
to customer demands and new fashion trending, it will lose its customer because it
wasnt able to meet their demands. For example if an organization produces mobile
phones. After a specific time new technology is introduced in the mobile phones, if
the organization fails to input such things in their products, theyll lose customers and
their market share will decrease. Audi has to act in a manner in order to maintain its
customer by adapting to the new technological and market changes.
Audi depend upon its supplier, without the supplier the organization cant produce
goods, they wont have the supplies in order to make their product. If the suppliers
charge high prices for the raw materials, ultimately the cost of production will
increase of the product. If the product is price elastic and Audi changes its price, there
Student Name:
13
Assessor Name:
Waleed Ahmad
Business
Abroo asad
Environment

will be a big demand of the product. Audi can either compromise with the suppliers or
find a new one and if the products price is inelastic then it have no effects on the
demand of the product and the organization can freely change the price of the product.
Audi should also ensure that its supplier provides them with high quality supplies and
they maintain a good relation between them.

How business and cultural environment effected Audi?

The general environment affects organizations indirectly. It includes social, economic,
legal/political, international, natural and technological factors that influence all
organizations about equally. Changes in federal regulations or an economic recession
are part of the organizations general environment. These events do not directly change
day-to-day operations, but they do affect all organizations eventually. (Daft, 2012)
The business and cultural environment affected Audi in a way that their offices were
raided by the antitrust officials and forcefully checked their data. It didnt disrupt their
reputation amongst the automotive market as the offices of other automotive giants
like Mercedes Benz was also raided. They were also asked to follow a fixed price
policy as the customers complained they charged high prices. As Audi has cut its
spare part prices, investigators also checked if they have a good relation with their
suppliers.

Student Name:
Assessor Name:
Waleed Ahmad

14
Business
Environment

Abroo asad

TASK 4 SCENARIO 4
How is international trade significant to UK business organizations?
International trade is the lifeblood of virtually all modern developed and
developing economies. As such, it involves the buying and selling of good and
services across national frontiers. At a personal level this is clearly seen through
the many imported items that can be found in the supermarkets and other retail
stores such as coco-cola, Fujifilm, apple iPods, Nike trainers and Nescaf coffee
brands that are available throughout the world. Trade permits countries to
specialize in products and commodities, which they can produce relatively
efficiently. There are many reasons for this specialization and include the
availability of particular factors of production. Economies, which have naturally
occurring resources, such as oil or copper, can exploit these and trade them on
the world market. Other economies may have a highly skilled workforce or have
unit labor costs below that of others so enabling them to produce clothing,
electronics or vehicles at competitive prices. (Bamford and Grant, 2010)
International trade have many advantages to developed economies such as UK itself,
economies of scale is now possible as the market is more diversified, increased
competition encourages new businesses to innovate new marketing and production
techniques, trade leads to the transfer of skilled labor and technological advancements
among the developing economies and international trade raises the income thus
increasing the capital invested and savings. Emerging economies tend to have more
balanced exports with increased emphasis of manufactured goods.
UKs economy has a vast skilled labor, which enables it to produce goods and
services at competitive prices. International trade also increases the supply of capital
for the UK, as it is a developed economy. UK will have reduces costs and more
efficient production and provide a diversity in growth for the national entrepreneurs
and organizations. UK mainly focuses on manufactured products as it has a developed
economy. Whereas developing economies specializes in primary products.
Significance of international trade to UK business organizations can be
explained by referring to the concept of comparative advantage. According to the
concept trade between two countries can be made in a mutually beneficial
manner, if each country has comparative advantage to manufacture products to
be traded, for i.e. UK possesses relative advantage in producing cloth, as it less
labor hours is required. Portugal, on the other hand, has relative advantage in
wine production, because only 80 hours are required to produce wine as
compared to 90 hours to produce cloth.
Impact of international trade to UK businesses can be illustrated by using the
case studies of Martin Lishman and Aquaco. Martin Lishman UK based
manufacturer and distributor of specialist equipment for the agricultural,
Student Name:
Assessor Name:
Waleed Ahmad

15
Business
Environment

Abroo asad

environmental and building industries generates substantial parts of its revenues

from international sales exporting its products to more than 20 countries
globally.
Similarly, Aquaco grey water recycling and rainwater harvesting company
based in Kent, UK sales its products and services to 14 countries and
international sales amounts to about 35% of its total revenues. These case studies
clearly illustrate the benefits of international trade to local businesses in the
UK. Hunt and Lautzenheizer (2011)

Analyze the impact of global factors on UK business organizations.

In modern times there are no economies that are not a part of global economy,
changes in the global economy would affect all the parts of any nations economy.
The products that are essential to the primary necessities have the most significant
impact upon the domestic markets. Some other factors like shortage of raw materials
would affect the production of national businesses that rely on the imports of raw
materials for the production of commodities. Due to international trade, the demand in
the market increases and intensifies. If import is unable to fulfill the demand, the
market becomes volatile, and it may lead to the diversification of a business or it can
equally harm the business.
There are many impacts of global factors on the UK business organizations. The
global factors can be divided into political, economical, social, technological,
ecological and legal.
Political factor can have a vast affect on the UKs business organization. The level of
global political stability and the level of bureaucracy in international affairs can have
a prolong affect on the business. The extent of freedom of media can, global trade
control initiatives, threat of international terrorism, tariffs between the UK and other
countries, Global copyright, patent and intellectual property disputes are the political
factors which influence the businesses in the UK.
In economical the following factors affect the business in UK, impacts of intensifying
economic globalization, global economic crisis, changes in the stock market, cost
advantages possessed by emerging super powers for i.e. India, USA and China, the
impact of the World bank and the World trade organization and the increasing
importance of outsourcing and offshoring initiatives.
Socially, the changes in family values on a global scale, the changes in the family
patterns for i.e. same sex marriages, increasing popularity of immigrations and
migration practices, increasing mobility between social classes and the greater
concern for the minorities in the society would affect the businesses in UK.
Level of technological infrastructure, industry specific technological advancements,
regular emergence of innovative communication technologies and the adoption of
Student Name:
Assessor Name:
Waleed Ahmad

16
Business
Environment

Abroo asad

competitive technology as the competitors are always increasing also affect the
businesses of the UK technologically.
The impacts of global warming, increasing of pollution, increasing levels of the
sensitivity towards ecological problems among the stakeholders and the activities of
the global environmental organizations also affects the businesses in the UK.
Another factor that can influence the businesses of the UK are the laws and
regulations related to data protection, global data protection rules and regulations,
increasing levels of globalization and the changes in cross country employment and
the health and safety laws. They all come under the legal factor that has an affect on
the organizations of the UK. (Jones and Evans, 2013).
The effect of expanding level of multiculturalism in workforce is another factor
affecting the worldwide power on UK organizations. On one hand, multiculturalism
can advantage organizations in the UK through offering crisp and fluctuating points of
view to customary business issues. Then again, large amounts of multiculturalism in
the working environment can create errors because of diverse contrasts and this can
have negative effect on the execution of UK organizations.
UK has great notoriety everywhere throughout the world for their progression in
innovation and worldwide variable gives the chance to UK business associations to
lead business everywhere throughout the world.
There will be a greater opportunity for selling goods in other countries by opening up
new markets and it will give the chance of higher sales. There will be increased
competition, which will give the organizations higher incentives to become more
competitive internationally. There is also a wider choice of locations and many vast
opportunities to open up new operations in other countries and give a chance to
organizations to transform into multinational. The mergers will have greater freedom
to arrange and take over firms from other nations. (Stimpson and Farquharson, 2010)

Evaluate the impact of policies of the European Union on UK

business organizations.
The European union is the economy of the world and it means that all the members of
the EU can have free trade with other member states. The UK business activities have
increased dramatically when it joined the EU. Reduced taxes and freedom from other
fiscal measures and policies have made a huge impact on the UK business
organizations and they can enjoy higher profits and can operate more freely without
much government intervention. Another factor of EU membership is that all the
organizations from all over the world are bound by the regulations and policies of
other European nations, while business belonging to the UK and other member states
are not. They have a higher profit margin and success rate within the EU. EU policies
Student Name:
Assessor Name:
Waleed Ahmad

17
Business
Environment

Abroo asad

have also made changes to the general policies and many products, which were
prohibited from being traded, can now be freely traded across different EU nations.

The EUs policy ensures that the market competition remains free and that the
organizations work efficiently to provide the best products to the customers in
reasonable prices. This ensures that no organization can create a market situation
where it is gaining high profits at the expense of other organizations. The chances of
surviving for the new and small-scale businesses are enhanced. The policy for
violation being rather stiff, the following rule is followed to the letter and monitored
strictly by the concerned agencies. These policies can be restrictive for large
businesses. EUs trade policies with other parts of the world are binding on all
members of the EU and it gives certain advantages in bargaining with the member
states.
The UK has traditionally had strong trade links with the EU. Despite changes in
the composition of the global economy, the EU in 2014 accounted for 44.6% of
UK exports of goods and services, and 53.2% of UK imports of goods and
services. However, strong economic growth in many developing economies
outside the EU has resulted in non-EU economies growing in importance to UK
trade, with the proportion accounted for by the EU falling consistently since
1999, despite the value of EU trade increasing.
Exports from the UK to EU and non-EU countries have grown on average by
3.6% and 6.5% respectively in each year between 1999 and 2014. However, the
stronger export growth to non-EU countries has resulted in the proportion of UK
exports destined for the EU falling from 54.8% in 1999 to 44.6% in 2014. Growth
in the value of UK imports of goods and services from EU and non-EU countries
is more comparable, growing on average by 4.7% and 5.5% respectively in each
year since 1999.
Faster growth in the value of UK imports compared to exports with the EU has
resulted in the UKs overall trade balance with the EU deteriorating (value of
imports exceeding exports), with the trade deficit widening notably, reaching
61.6 billion in 2014 compared with 11.2 billion in 1999.
Goods rather than services; in 2014 dominate UK trade with the EU, trade in
goods represented close to two-thirds of all UK exports to the EU, and over
three-quarters of total UK imports from the EU. Between 1999 and 2014, goods
imported by the UK from the EU have risen by 4.9% per year on average,
compared to exports which have risen by 2.5% per year, causing the UKs trade
in goods deficit with the EU to rise to 77.0 billion.
Although the UK has historically recorded a trade in goods deficit with the EU,
its trade in services balance with the EU is much more favorable, running a
surplus in each year since 2005, which reached 15.4 billion in 2014.
UK exports of goods and services to non-EU countries have grown at a faster
Student Name:
18
Assessor Name:
Waleed Ahmad
Business
Abroo asad
Environment

rate than imports, driven largely by services exports. This has resulted in the UK
running an overall trade surplus with non-EU countries (value of exports
exceeds imports) over the past three years, which reached 27.8 billion in 2014

(Ons.gov.uk, 2015)

Bibliography
i.

ii.

iii.

iv.

v.
vi.
vii.

Stimpson, P. and Farquharson, A. (2010). Cambridge international as

and A level business studies coursebook. Cambridge: Cambridge
University Press.
Ib-econ.wikispaces.com, (2015). [online] Available at: https://ibecon.wikispaces.com/file/view/wiki2graph1.jpg/193747020/535x317/wi
ki2graph1.jpg [Accessed 13 Dec. 2015].
Economicshelp.org,
(2015).
[online]
Available
at:
http://www.economicshelp.org/wpcontent/uploads/2012/11/monopoly1.jpg [Accessed 13 Dec. 2015].
Daft, R. (2012). New era of management. Mason, Ohio:
Andover.Bamford, C. and Grant, S. (2010). Cambridge international AS
and A level economics. Cambridge: Cambridge University Press.
Hunt, E.K. & Lautzenheiser, M. (2011) History of Economic Thought: A
Critical Perspective M.E. Sharpe
Jones, P. & Evans, J. (2013) Urban Regeneration in the UK: Boom, Bust and
Recovery SAGE Publications

Ons.gov.uk, (2015). How important is the European Union to UK trade

and
investment?
ONS.
[online]
Available
at:
http://www.ons.gov.uk/ons/rel/international-transactions/outwardforeign-affiliates-statistics/how-important-is-the-european-union-to-uktrade-and-investment-/sty-eu.html [Accessed 14 Dec. 2015].

Student Name:
Assessor Name:
Waleed Ahmad

19
Business
Environment

Abroo asad