UK Economy

UK Economy.

In business there are three different types of sectors. The sectors are known as:

Vertical- vertical integration is when of business takes over or mergers with another business in a different point of production but the two businesses are in the same area. An example would be a car manufacture taking over or merging with a business in a tyre firm.

Horizontal- horizontal integration is when a firm takes over or mergers with another firm the in same line of productions and have the same or similar products.

Mergers is when two or more organisations join together to become one business. The benefit of this would be that the two businesses would share information and resource that needed to progress in their market. An example of this would be Renault and Nissan two car manufactures merged in 1999 and brought Samsung which sells phones and White Goods.

Mergers take place voluntary when both businesses decide to join. Takeover bids are done without an agreement. A takeover bid can take place when another business owns more than 51% of the company shares. When the new business has 51% of share they have majority of the share and now gains control over the business. An example of a takeover would be in 2010 an American organisation known as Kraft bought more than 51% of Cadburys share. The takeover bid valued Cadburys at £11.5 Billion. Benefits

The benefit would be that organisations can save money from economies of scale. An economy of scales is when businesses buy in bulk for a reduced price. Another advantage would be once merged the business can promote their business greater for the reason that resources and information is shared. Once taken over the businesses has eliminated one of its competitors and can focus on competing with larger businesses. Both firms can spread their production of services and products, which would then mean that they have reduced the cost of products and distribution.

The disadvantages of merging and takeovers would be that when the new business join they could let go of existing employees and bring in new employees. Takeovers and mergers reduce competition in the market and this could lead to that business becoming a monopoly. Once a monopoly the business can set high price and because there is no competition consumers would have no choice but to buy expensive products and services.

The graph above shows the population of UK, USA, China and the EU. As you can see from the graph that China has the largest population out of the other countries. UK has the smallest population out of the other countries. You could say that having a larger population is a benefit for the reason that the more people you has in a country the larger the workforce. However if the country is over populated this could lead to crowed cities and town. The more people the fewer job will be available. The UK population is majority of elderly people 60+. The reason for this is that there is better health care and people are living for longer.