International business

managementREPORT ON

UNITED KINGDOM

00/03/2010

Submitted To: Submitted By:

Ms. Amar Aujla Swati Lohia

Ujjwal

Vany Aggarwal

Varun Rastogi

ACKNOWLEDGEMENT

We, Swati Lohia, Vany Aggarwal, Ujjwal and Varun Rastogi of PGDM-1 would like to

thank our faculty of International business management Ms. Amar Aujla for her

valuable guidance and advice.

We would also like to thank our institute Fostiima Business School for providing us

with a good environment and facilities to complete this project. It gave us an opportunity

to learn about the culture and other aspects of the country. We hereby, declare that the

report titled “Analysis of United Kingdom” is our own research and we are thankful to

all those who helped us in completing our project.

TABLE OF CONTENTS

SL.NO

.

TOPICS PAGE NO.

1. Executive summary 4

2. History 10

3. Language and culture 11

4. Legal system 12

5. Political system 13

6. Economic system 14

7. Financial system 16

8. Current economic climate 17

9. Trade or ties with India and other countries 18

10 Major industries 19

11. Demographic profile 20

12. Factors for business success in the country 20

13. Business plan 1 21

14. Business plan 2 31

15. Bibliography 35

EXECUTIVE SUMMARY

UK is a sovereign state located off the northwestern coast of continental Europe. It is an

island country including Great Britain, the north eastern part of Ireland and many small

islands. It is surrounded by the Atlantic Ocean, the North Sea, the English Channel and

the Irish Sea. The largest island, the Great Britain, is linked to France by the channel

tunnel.

United Kingdom is a constitutional monarchy and unitary state consisting of consisting

of 4 countries: England, Northern Ireland, Scotland and Wales. It is governed by a

parliamentary system with its capital in London. UK has 14 overseas territories.

UK is a developed country with the world’s sixth largest economy by nominal gdp and

the sixth largest by purchasing power parity. It was the world’s first industrialized

country and the world’s foremost power during the 19th and early 20th centuries. UK is

major power with strong economic, cultural, military, scientific and political influence. It

is a recognized nuclear weapons state and has the fourth highest defence spending in

the world. It is a member state of the European Union, WTO, etc. United Kingdom is a

net exporter of energy. In addition to oil, the kingdom has abundant reserves of natural

gas, coal, and atomic power. UK has extremely high rate of literacy ie.99%.

FACTS AND FIGURES:

GDP (purchasing power parity) :

$2.165 trillion (2009 est.)country comparison to the world: 7$2.262 trillion (2008 est.)$2.247 trillion (2007 est.)note: data are in 2009 US dollars

GDP (official exchange rate):

$2.198 trillion (2009 est.)

GDP - real growth rate :

-4.3% (2009 est.)country comparison to the world: 1840.7% (2008 est.)2.6% (2007 est.)

GDP - per capita (PPP) :

$35,400 (2009 est.)country comparison to the world: 32$37,100 (2008 est.)$37,000 (2007 est.)note: data are in 2009 US dollars

GDP - composition by sector :

agriculture: 1.2%industry: 23.8%Services: 75% (2009 est.)

Labor force :

31.25 million (2009 est.)country comparison to the world: 18

Labor force - by occupation :

agriculture: 1.4%industry: 18.2%Services: 80.4% (2006 est.)

Unemployment rate :

8% (2009 est.)country comparison to the world: 855.642% (2008 est.)

Population below poverty line :

14% (2006 est.)

Household income or consumption by percentage share :

lowest 10%: 2.1%highest 10%: 28.5% (1999)

Distribution of family income - Gini index :

34 (2005)country comparison to the world: 9236.8 (1999)

Investment (gross fixed) :

15% of GDP (2009 est.)country comparison to the world: 138

Budget :

revenues: $819.9 billionExpenditures: $1.132 trillion (2009 est.)

Public debt :

68.5% of GDP (2009 est.)country comparison to the world: 2251.8% of GDP (2008 est.)

Inflation rate (consumer prices) :

2.1% (2009 est.)country comparison to the world: 713.6% (2008 est.)

Central bank discount rate :

0.86% (31 December 2008)

Commercial bank prime lending rate :

4.63% (31 December 2008)country comparison to the world: 1385.52% (31 December 2007)

Stock of money :

$NA (31 December 2008)

Stock of quasi money :

$NA (31 December 2008)

Stock of domestic credit :

$NA (31 December 2008)$5.277 trillion (31 December 2007)

Market value of publicly traded shares :

$NA (31 December 2008)country comparison to the world: 5$3.859 trillion (31 December 2007)$3.794 trillion (31 December 2006)

Agriculture - products :

cereals, oilseed, potatoes, vegetables; cattle, sheep, poultry; fish

Industries :

machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics

and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, other consumer goods

Industrial production growth rate :

-9.4% (2009 est.)country comparison to the world: 143

Electricity - production :

368.6 billion KWh (2007 est.)country comparison to the world: 12

Electricity - consumption :

345.8 billion KWh (2007 est.)country comparison to the world: 12

Electricity - exports :

1.272 billion KWh (2008 est.)

Electricity - imports :

12.29 billion KWh (2008 est.)

Oil - production :

1.584 million bbl/day (2008 est.)country comparison to the world: 19

Oil - consumption :

1.71 million bbl/day (2008 est.)country comparison to the world: 15

Oil - exports :

1.602 million bbl/day (2008 est.)country comparison to the world: 15

Oil - imports :

1.651 million bbl/day (2008 est.)country comparison to the world: 13

Oil - proved reserves :

3.41 billion Bbl (1 January 2009 est.)country comparison to the world: 29

Natural gas - production :

69.9 billion cu m (2008 est.)country comparison to the world: 14

Natural gas - consumption :

95.94 billion cu m (2008 est.)country comparison to the world: 6

Natural gas - exports :

10.5 billion cu m (2008 est.)country comparison to the world: 19

Natural gas - imports :

36.54 billion cu m (2008 est.)country comparison to the world: 10

Natural gas - proved reserves :

342.9 billion cu m (1 January 2009 est.)country comparison to the world: 37

Current account balance :

$-32.37 billion (2009 est.)country comparison to the world: 183$-45.68 billion (2008 est.)

Exports :

$351.3 billion (2009 est.)country comparison to the world: 10$466.3 billion (2008 est.)

Exports - commodities :

manufactured goods, fuels, chemicals; food, beverages, tobacco

Exports - partners :

US 13.8%, Germany 11.5%, Netherlands 7.8%, France 7.6%, Ireland 7.5%, Belgium 5.3%, Spain 4.1% (2008)

Imports :

$473.6 billion (2009 est.)country comparison to the world: 7$639.3 billion (2008 est.)

Imports - commodities :

manufactured goods, machinery, fuels; foodstuffs

Imports - partners :

Germany 13%, US 8.7%, China 7.5%, Netherlands 7.4%, France 6.8%, Norway 6%, Belgium 4.7%, Italy 4.1% (2008)

Reserves of foreign exchange and gold :

$NA (31 December 2009 est.)$52.98 billion (31 December 2008 est.)

Debt - external :

$9.088 trillion (30 June 2009 est.)country comparison to the world: 2$9.041 trillion (31 December 2008 est.)

Stock of direct foreign investment - at home :

$1.025 trillion (31 December 2009 est.)country comparison to the world: 3$1.445 trillion (31 December 2008 est.)

Stock of direct foreign investment - abroad :

$1.634 trillion (31 December 2009 est.)country comparison to the world: 3$1.567 trillion (31 December 2008 est.)

Exchange rates :

British pounds (GBP) per US dollar - 0.6494 (2009), 0.5302 (2008), 0.4993 (2007), 0.5418 (2006), 0.5493 (2005)

GENERAL INTRODUCTION:

United Kingdom has an area of 244,100 sq.km, (94,250 sq. miles) with a population of

57 million people. It has relatively a high population density. It ranks fifteenth in world in

terms of population. The separate traditions and cultures of England, Wales, Scotland

and Northern Ireland, its four component parts, have been added to over the centuries

by these of immigrants (Irish, Jews, French Huguenots, for example) and political

refugees from Europe who have settled in United Kingdom. More recently people from

the Caribbean and the South Asian subcontinent, Cypriots, Italians, Chinese and others

have contributed to the multi racial nature of the British society. Legislation is designed

to help foster equal rights and equality of opportunity for all citizens, and the criminal law

on incitement to racial hatred has been strengthened.

HISTORY

On 1 May 1707, the Kingdom of Great Britain was created by the political union of the

Kingdom of England (which included Wales) and Scotland. It was the result of the

Treaty of Union that was agreed on 22 July 1706 by both the Parliament of England and

Scotland each passing an Act of Union in 1707. Almost a century later, the Kingdom of

Ireland merged with the Kingdom of Great Britain to form the United Kingdom with the

passing of the Act of Union 1800.

After the defeat of Napoleon in the Napoleonic, the UK emerged as the principal naval

power of the 19th century till the mid-20th century. One year later, the British

Broadcasting Corporation was created and became the world's first large-scale

international broadcasting network.

Disputes within Ireland over the terms of Irish Home Rule led eventually to the partition

in 1921. So, in 1927, UK became the United Kingdom of Great Britain and Northern

Ireland.

England Scotland Wales Great Britain

LANGUAGE AND CULTURE

Languages

The United Kingdom has no official language. The dominant language spoken as a first

language by 95% of the population is English. Scots is spoken by around 500,000

people in Scotland and 30,000 in Northern Ireland where it is called Ulster

Scots. Welsh are spoken by around 850,000 people. Scottish Gaelic is spoken by about

60,000 speakers in Scotland. Cornish are spoken by around 2,500 people. Irish is

spoken by about 106,844 speakers in Northern Ireland. The Polish minority of 600,000

people speak Polish. British sign language is also common.

Culture of United Kingdom

British culture is a combination of preserving elements of distinctive traditions, customs

and symbolism. Culture of United Kingdom includes its cinema, literature, media which

includes broadcasting, internet, print, music, philosophy, science, engineering and

innovation, visual art. Most British literature is in English. UK publishes 206,000 books

each year making it the largest publisher of books in the world. The prominence of the

English gives UK media a widespread international dimension.

Business Culture

When communicating with people they see as equal to themselves in rank or class, the

British are direct, but modest. If communicating with someone they know well, their style

may be more informal, although they will still be reserved. How meetings are conducted

is often determined by the composition of people attending. Maintain eye contact and a

few feet of personal space. After a meeting, send a letter summarizing what was

decided and the next steps to be taken.

LEGAL SYSTEM

The UK has three distinct systems of law: English law, Northern Ireland law and Scots

law. Recent constitutional changes saw a new Supreme Court of the United Kingdom

come into being in October 2009 to take on the appellate functions of the Appellate

Committee of the House of Lords. The Judicial Committee of the Privy Council including

the same members as the Appellate Committee of the House of Lords is the highest

court of appeal for several independent Commonwealth countries, the UK overseas

territories and the British crown dependencies.

The English law, which applies in England and Wales, and Northern Ireland law are

based on common-law principles. The courts of England and Wales are headed by the

Senior Courts of England and Wales, consisting of the Court of Appeal, the High Court

of Justice (for civil cases) and the Crown Court (for criminal cases). The Supreme Court

is the highest court in the land for both criminal and civil appeal cases in England,

Wales, and Northern Ireland and any decision it makes is binding on every other court

in the same jurisdiction, and often has persuasive effect in its other jurisdictions. On

appeal, a court may overrule the decisions of its inferior courts, such as county courts

(civil) and magistrates' courts (criminal). The High Court may also quash on judicial

review both administrative decisions of the Government and delegated legislation. The

courts of Northern Ireland are headed by the Court of Judicature of Northern Ireland,

consisting of the Northern Ireland Court of Appeal, the Northern Ireland High Court of

Justice and the Northern Ireland Crown Court. Below that are county courts and

magistrates' courts.

The High Court of Justiciary—the supreme criminal court of Scotland.

Scots law is a hybrid system based on both common-law and civil-law principles. The

chief courts are the Court of Session for civil cases and the High Court of Justiciary for

criminal cases. The Supreme Court of the United Kingdom serves as the highest court

of appeal for civil cases under Scots law.

POLITICAL SYSTEM

The United Kingdom is a constitutional monarchy in which the Monarch is head of state

and the Prime Minister of the United Kingdom is the head of government and

parliamentary democracy. The main chamber of parliament is the lower house, the

House of Commons, which has 646 members elected by universal suffrage. About 700

people are eligible to sit in the upper house, the House of Lords, including life peers,

hereditary peers, and bishops. There is a Scottish parliament in Edinburgh with wide-

ranging local powers, and a Welsh Assembly in Cardiff which has more limited authority

for Welsh affairs but can legislate in some areas. The judiciary is independent of the

executive and the legislature, though several senior judges are still members of the

House of Lords. In October 2009 the judicial role of the House of Lords was removed

and given to a new Supreme Court under the Constitutional Reform Act 2005.

The UK is a multi-party system and since the 1920s, the two largest political parties

have been the Conservative Party and the Labour Party. The Liberal Democrats, a party

formed by the merger of the former Liberal Party and Social Democratic Party in 1988,

is the third largest party in the British parliament. It seeks a reform of the electoral

system to address the disproportionate dominance of the two main parties that results

from the current system. Parliament is the centre of the political system in the United

Kingdom. Parliament is bicameral, consisting of the House of Commons and the House

of Lords.

ECONOMIC SYSTEM

During the days of the British Empire, the UK economy was the largest in the world and

the first to industrialise. UK is still the sixth largest economy in the world purchasing

power parity. It is a member of the G7 (now expanding to the G8 and G20), the

European Union (although not the European Economic and Monetary Union -EMU - or

Euro) and the OECD (Organization for Economic Cooperation and Development). It is

also the founding member of the Commonwealth, the association formed by former

British Empire states. The British Economy is one of the most globalised economies in

the world, considered to be the largest financial center in the world. The economy of the

United Kingdom of Great Britain includes the economies of England, Scotland, Wales

and Northern Ireland.

The Bank of England had cut interest rates to 1.0 per cent by the end of 2008, and that

is expected to drop to 0.5 per cent for most of 2009 and 2010. UK budget deficit stood

at 5.3 per cent of GDP in 2008. With economic stimulus packages and bank bailouts

being worked on, that is expected to rise to 11.3 per cent of GDP in 2009 and 13 per

cent of GDP in 2010.In 2008; the UK had the 43rd largest relative national public debt,

at 47.2 per cent of GDP. This figure could rise to 58.5 per cent of GDP by 2009 and 70

per cent of GDP in 2010, because of the projected budget deficits of 2009-2010.

Inflation had ramped up to 3.6 per cent in 2008, but has dropped back with the

economic collapse and is expected to be 0.4 per cent in 2009 and 0.8 per cent in 2010.

It had the 58th lowest inflation rate in the world at end 2008.

The unemployment rate had reached 6.3 per cent in the UK by the end of 2008

according to the Office of National Statistics, reaching close to 2 million unemployed.

This figure is likely to grow to the 2.5 million – 3 million figures, or 8-10 per cent. The UK

has the third highest current account deficit in the world of US$186 billion. It has a large

trade deficit in manufacturing and has become a net importer of energy and North Sea

extraction declines. It runs $468.7 billion of exports (9th in the world export rankings)

and $654.7 billion of imports (6th in the world). It was the 2nd largest recipient foreign

direct investment (FDI) in 2007 (although the figure has dropped since), and one of the

most competitive in Europe for business and tax.

The UK taxation system involves taxes applied by both the central government and

local government. Central government collects tax through Her Majesties Revenue and

Customs (HM Revenue & Customs) department, in the form of income tax, national

insurance, VAT (value added tax), corporation tax and fuel duty. Local government

receives grants from central government, and additionally collects revenue from

business rates, council tax and fees such as on-street parking. Tax as a percentage of

GDP reached a percentage of GDP reached 46 per cent as of 2005-2006, according to

HM Treasury.

Measured as a percentage of national income (09-10 is a forecast from the OECD)

UK Government Spending and Taxation

Source: OECD World Economic Outlook

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

36

37

38

39

40

41

42

43

44

45

46

47

48

49

Pe

r ce

nt o

f GD

P

36

37

38

39

40

41

42

43

44

45

46

47

48

49

Total Tax Revenue

Government Spending Budget deficit where G>T

FINANCIAL SYSTEM

Banking system

The UK banking system has witnessed a substantial growth and change in recent

years. Major trends in the UK banking sector over the last years include the conversion

of building societies into banks, the consolidation of the UK banking industry and the

entrance of non-financial firms into the financial services market. Finally, supermarkets,

insurance companies and football clubs were allowed to enter the retail financial

markets in Britain and are now offering a range of financial services such as credit

cards, unit trusts etc. the UK banking sector makes a significant contribution to the UK

economy, accounting for an estimated 3.7% of the UK's GDP.

The Pound Sterling is the currency of the United Kingdom. It is the fourth most-traded

currency in the foreign exchange market after the Euro, US dollar and Japanese yen.

The Pound Sterling is the third-largest reserve currency, after the US dollar and the

Euro.

The UK currency hit a 26-year high of $2.1161 in 2007. However, with the heightening

of the global financial crisis since December 2008, the Pound lost value at a rapid rate

and reached a 24-year low of $1.35 per £1 in January 2009. It continued to decline

throughout the year, hitting an all-time low of 1.0219GBP in December. The Pound rose

in value in early 2009 and stood at 1.06GBP at the end of March.

CURRENT ECONOMIC CLIMATE

UK, a leading trading power and financial center, is one of the quintets of trillion

dollar economies of Western Europe. Over the past two decades, the government

has greatly reduced public ownership and contained the growth of social welfare

programs. Agriculture is intensive, highly mechanized, and efficient by European

standards, producing about 60% of food needs with less than 2% of the labor

force. The UK has large coal, natural gas, and oil resources, but its oil and

natural gas reserves are declining and the UK became a net importer of energy

in 2005. Services, particularly banking, insurance, and business services,

account by far for the largest proportion of GDP while industry continues to

decline in importance. Since emerging from recession in 1992, Britain's economy

enjoyed the longest period of expansion on record during which time growth

outpaced most of Western Europe. In 2008, however, the global financial crisis

hit the economy particularly hard, due to the importance of its financial sector.

Sharply declining home prices, high consumer debt, and the global economic

slowdown compounded Britain's economic problems, pushing the economy into

recession in the latter half of 2008 and prompting the UK government to

implement a number of measures to stimulate the economy and stabilize the

financial markets; these include nationalizing parts of the banking system, cutting

taxes, suspending public sector borrowing rules, and moving forward public

spending on capital projects. Public finances, weak before the economic

slowdown, deteriorated markedly during 2009, as did employment. The Bank of

England periodically coordinates interest rate moves with the European Central

Bank, but Britain remains outside the European Economic and Monetary Union

(EMU). UK govt. is also facing a tough situation trying to balance its domestic

unemployment levels and its liberal business policies with regards to immigration. As

per latest macroeconomic indicators in UK, national economy of UK shrank at a rate of

1.5% in final quarter of fiscal 2008.

TRADE OR TIES WITH INDIA AND OTHER COUNTRIES

TRADE OR TIES WITH INDIA AND OTHER COUNTRIES.

The diplomatic foreign relations of the United Kingdom are implemented by the United Kingdom's Foreign and Commonwealth Office.

Australia – United Kingdom relations

Australia – United Kingdom relations are close, marked by shared history, culture, institutions and language, extensive people-to-people links, aligned security interests, and vibrant trade and investment cooperation. Australia fought alongside Britain in World War I at Gallipoli and in World War II. Until 1949, the United Kingdom and Australia shared a common nationality code. The final constitutional ties between United Kingdom and Australia ended in 1986 with the passing of the Australia Act 1986.

India – United Kingdom relations

India was a colony of Britain since the British East India Company ruled over large parts of central and eastern India from the 18th century. Around 2 million Indian immigrants live in the UK. India is the second biggest investor in the UK . Indian culture and cuisine are very popular in the UK. Tea is imported to Britain from India. Both India and the UK are members of the Commonwealth of Nations.

United Kingdom – United States relations

The United Kingdom and the United States are close military allies. The two countries

share cultural similarities, as well as military research and intelligence facilities. The UK

has purchased military technology from the USA such as Tomahawk cruise missiles

and Trident nuclear missiles, and the US has purchased equipment from Britain (e.g.

Harrier Jump Jet). The USA also maintains a large number of military personnel in the

UK.

MAJOR INDUSTRIES

United Kingdom is an open economy, in which international trade plays a vital part. About one-quarter of its GDP comes from the export of goods and services. UK is a leading manufacturer and exporter of mechanical equipment, electrical and electronic goods, and chemicals. Productivity has grown sharply in industries like metal manufacturing and vehicle building. About 77% of visible exports consist of manufacturers or semi-manufactures. Microelectronics is increasingly used in production processes. Computer-aided design facilities have taken up by about 60% of all engineering plants.

United Kingdom is the world’s ninth largest steel producer (by volume). In addition to its large output of non-ferrous metals, United Kingdom is also a major producer of specialized alloys used by the aerospace, electronic, petrochemical and other industries. Other mineral products include glass, bricks, cement and ceramics. United Kingdom is the world’s leading manufacturer of fine bone china and the biggest exporter of China clay. Mechanical engineering is an important source of export earnings. Major products include process plant for large-scale industries such as oil refining and nuclear power generation.

United Kingdom is the Western world’s largest producer of agricultural tractors. It is also an important manufacturer of railway and motor vehicles. The British aerospace industry is the third largest in the world, its products including civil and military aircraft and satellites. Over 70% of British manufacturing businesses now use computers to assist production. The Chemical industry is the third largest in Europe.

The clothing industry, one of the largest in Europe, meets about two thirds of domestic demand. The woolen industry is one of the worlds largest and United Kingdom is a leading producer of woven carpets. Footwear factories supply 36% of the British market and one-third of leather production is exported. Other manufacturing industries include food and drink, timber and furniture, printing and publishing, paper and board, and rubber. Security printers of banknotes and postage stamps are important exporters. Jewellery, gold and silverware have a strong craft tradition.

DEMOGRAPHIC PROFILE

According to the 2001 census, the total population of the United Kingdom was

61,789,194 and the 21st-largest in the world. Its overall population density is one of the

highest in the world. Almost one-third of the population lives in England's southeast with

about 8.2 million in London. The United Kingdom's extremely high literacy rate (99%) is

attributable to universal public education . Education is compulsory from the ages of 5 to

16. The Church of England and the Church of Scotland function as the official national

churches in their respective countries. There are 11 cities which exceed 300,000

inhabitants, these

being London, Birmingham, Glasgow, Leeds, Sheffield, Liverpool, Manchester, Edinbur

gh, Bristol, Cardiff and Coventry.

Age structure

The age groups are not evenly distributed around the country, with some areas having

many young adults and children and some areas having large numbers of older people. 

FACTORS FOR BUSINESS SUCCESS IN UNITED KINGDOM

The UK private label market: Key success factors

The most important factor that promotes private label growth is retailer concentration.

The UK retail market is consolidated which gives them enough presence and resources

to compete with manufacturers of established brands, in aspects like advertising,

innovation and supply chain. Another important success factor has been the dynamism

and innovativeness of UK retailers. Faced with intense competition from other players,

they have continuously re-invented themselves, and modified products to suit changing

consumer demands.

In addition, the following factors reinforce UK’s position as a business major in the world. 

Britain’s position as Europe’s leading e-commerce market  Its wealth of R&D facilities and world-leading telecom infrastructure  The English language speaking population  The position of London as Europe’s business capital  The country has a stable parliamentary democracy  India enjoys the status of Most Favoured Nation (MFN) in the UK

BUSINESS PLAN 1

Guildford Dry Cleaning Service is a sole trader, start-up enterprise, to be established in Guildford, Surrey. The company will provide dry cleaning, laundry, and garment alterations, offered with regular home pick-up and delivery services.

The company will have a production facility, but will not need retail shop front because of our pick-up and delivery service. However, we will need delivery vans, and customer service trained drivers.

Customers can choose payment either at the time of each delivery, or by monthly credit card billing. The Service will send statements to each contract customer, itemizing service fees and the charge for the service to their credit cards for payment, at the end of each month.

The business provides a new door-to-door dry cleaning, laundry, and alteration service in Guildford that surely will attract customer attention. Working customers may find this service is convenient for them and want to try it. If they are satisfied with the service quality they are likely to become repeat customers. When the patronage happens continuously, they become loyal customers of the service. These customers will recommend Guildford Dry Cleaning Service to their friends and coworkers. As more and more customers use this service, Guildford Dry Cleaning Service's image is enhanced and we will gain more and more market share.

Sales forecast gradually increase over Years 1-3 and comprise total sales of £324,700. We project solid Net profits in the first year.  Third year Sales and Net Profits increase significantly

1. Mission

We will offer dry cleaning, laundry, and clothing alteration services with free home pickup and delivery. Our high quality and convenience will save time for working customers.

2. Keys to Success

1. The business is entering the first year of operation therefore a comprehensive marketing strategy will be the key to success of the business.

2. It is important to remember that the target customers have money and want to be provided with a high quality service; therefore they will only use this service if they are entirely satisfied.

3. Furthermore, the hours of operation must be convenient and service completion must be timely in order that customers are not harried after a long day working.

3. Objectives

In providing laundry and garment alteration services for customers in Guildford area, Guildford Dry Cleaning Service aims to:

Attain a 30% market share by the end of the first year Have first year total sales in excess of £324,000 Producing net profits of over £75,000

4. Company Summary

Guildford Dry Cleaning Service is a sole trader, start-up enterprise, to be established in Guildford, Surrey.  The company will provide dry cleaning, laundry, and garment alterations, offered with regular home pick-up and delivery services.

The company will have a production facility, but will not need retail shop front because of our pick-up and delivery service. However, we will need delivery vans, and customer service trained drivers.

Initially, the production facility will be rented. Cleaning equipment will be leased with accompanying maintenance contracts.

Start-up financing will be through owner investment and bank loans, with a line of credit established for operations eventualities.

4.1 Company Ownership

The proposed legal form of business is sole trader. This is a small business and need not publicly disclose its finances. The business can immediately start without the complicated procedures associated with partnerships, limited liability companies, or co-operatives. The owner/founder will be the director and will initially handle the bookkeeping responsibilities.

4.2 Start-up Summary

Capital resource plan

Loan: Lending plan has to be completed and submitted to the bank six months before starting the business. Loan will be needed two months in advance.

Leasing equipment: Buying new machines costs approximately £30,000 as opposed to leasing which costs £10,000 per year including maintenance. Evaluating the leasing solution shows NPV higher than that of buying machines. Moreover, the business is new and has less experience in maintenance and repair of machine breakdown,

therefore the optimal solution is leasing machines. The following machines will be leased:

1 Washer - 17kg capacity, high spin, microprocessor control, electric heat 1 Tumble dryer - 18kg capacity, stainless steel drum and gas heated 1 Dry cleaning machine - 11kg 1 Roller Iron 1000 x 300 mm, variable speed and vacuum exhauster 1 Ironing table with steaming vacuum board, integral 7 litre boiler, iron, water

pump and light

4.3 Capital plan: The owner will invest £32,000 in the business. Additional capital for the business will be borrowed from a bank.

Buying a new van, and office/facilities equipment (computer, printer, fax, telephone instrument, tables, chairs, shelving, work tables, racks, etc…) and initial leasing of laundry machines: £19,500

Buying another new van in April: £7,000

Annual interest of 6.48% has to be paid on the long-term loans secured with fixed assets.

Start-up Requirements

Start-up ExpensesLegal £150 Stationery etc. £1,200 Brochures £2,250 Recruitment and Training £400 Insurance £570 Rent £600 Utilities £500 Leased Equipment £834 Research and Development £0 Expensed Equipment £5,000 Other £2,790 Total Start-up Expenses £14,294

Start-up AssetsCash Required £10,000 Start-up Inventory £500 Other Current Assets £0 Long-term Assets £14,000 Total Assets £24,500

Total Requirements £38,794

Start-up Expenses to Fund £14,294 Start-up Assets to Fund £24,500 Total Funding Required £38,794 Assets Non-cash Assets from Start-up £14,500 Cash Requirements from Start-up £10,000 Additional Cash Raised £12,706 Cash Balance on Starting Date £22,706 Total Assets £37,206 Liabilities and CapitalLiabilitiesCurrent Borrowing £0 Long-term Liabilities £19,500 Accounts Payable (Outstanding Bills)

£0

Other Current Liabilities (interest-free)

£0

Total Liabilities £19,500

CAPITALPlanned InvestmentInvestor 1 £32,000 Investor 2 £0 Other £0 Additional Investment Requirement £0 Total Planned Investment £32,000 Loss at Start-up (Start-up Expenses)

(£14,294)

Total Capital £17,706 Total Capital and Liabilities £37,206 Total Funding £51,500

5. Services

Guildford Dry Cleaning Service is going to provide the following services for customers with free home pick-up and delivery in the Guildford area:

Dry cleaning Laundry for personal clothes and large items such as blankets, duvets, curtains,

etc. Alteration service

5.1 Operations plan

There are two ways for customers to take part in the service. Customers can sign contracts with Guildford Dry Cleaning Service to get regularly scheduled service, or they can also order over the telephone or e-mail to Guildford Dry Cleaning Service.

Customers can choose payment either at the time of each delivery, or by monthly credit card billing. The Service will send statements to each contract customer, itemizing service fees and the charge for the service to their credit cards for payment, at the end of each month.

No retail shop will be rented in order to reduce the operation cost.  An operations facility for installing machines and equipment, washing and cleaning activities, and storing not yet cleaned and cleaned products is needed. The operations facility will require about 200 square meters divided into four main sections as follows:

1. Machine installation and cleaning activities 2. Sorting and storage of dirty garments received 3. Storing cleaned garments after finishing prior to delivery 4. Garment alteration workroom

The whole operation process will be controlled and monitored by a laundry expert employee, and generally managed by the business owner.

5.2 Market Analysis Summary

There are a number of reasons for choosing the dry cleaning, laundry, and alteration service industry:

Payment for the service is by cash, cheque, or credit card. No capital stagnancy, receive payment every month, easy to get instant profit. Capital requirement for purchasing commercial laundry equipment is minimal;

therefore the risk of this business is low. This service only requires a few staff. Supplies needed service for customers’ frequent demand (laundry - clean

clothes). Customers use this service as there are few or no alternatives (dry cleaning,

carpet cleaning…).

The demand for using service is increasing due to changing life styles, incomes, and the increase in clothing expenditure

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers

Growth CAGR

Full-time employees

5% 49,400 51,870 54,464 57,187 60,046 5.00%

Part-time employees

10% 14,625 16,088 17,697 19,467 21,414 10.00%

Other 2% 1,500 1,530 1,561 1,592 1,624 2.01%

Total 6.12% 65,525 69,488 73,722 78,246 83,084 6.12%

6. Target Market Segment Strategy

Table in the previous topic shows the percentages of males and females working full time from the period 2001 – 2002 which are a lot higher than that of those working part time.

This show that more and more people have money (standard of living increased) but have less time to do their housework (laundry) in Guildford. They are often tired after working all day and tend to spend money to hire someone else to do the housework for them. Moreover, the demand on clothes of these working people (particularly professionals) usually increases proportionately with their income. Buying more clothes, especially expensive clothes, makes them pay more attention to the care and cleaning of those clothes. With careful research, this business focuses on working and professional class customers as a target segment market.

6.1 Service Business Analysis

There are two competitors in dry cleaning, laundry and alteration services in Guildford: Trend Cleaners and Woodbridge Hill Cleaners and Launderers. They are both small-scale services but have quite a lot of customers (this information is collected by self research and observation). However, these shops do not provide door-to-door service free of charge for customers. Here under are the strengths, weaknesses, opportunities and threats pertaining to this business.

7. Competition and Buying Patterns

Strengths:

We offer a new service for dry cleaning, and laundry, providing another choice for customers.

We provide quick and convenient service in order to save customer’s time.

Weaknesses:

Strong competition from already established competitors in Guildford. Starting at no market share at all. Less experience than competitors.

Opportunities:

Expenditure in clothing is increasing, including expensive clothes; therefore the demand of taking care of clothes also increases.

There are more and more women – who traditionally do the laundry and cleaning work in the family – going to work outside the home. The target market of this business is working-class and professional-class customers.

Average income of Guildford citizens is increasing. People tend to spend more time on leisure activities rather than doing the house

work. Participation within a steadily growing service. The forecast of the dry cleaning

and laundry service goes steadily up through 2010. There is a high likelihood of repeat business. The ability to decrease the fixed costs as the sales volume increases.

Threats:

If the business is successful, there will be new competitors who supply the same kind of service.

New technology changes may bring out new family washing machines for dry cleaning.

7.1 Competitive Edge

As the UK's economy grows rapidly and quality of life is increased, people tend to spend more time and money in leisure activities rather than doing their house work. They

prefer that someone else does the cleaning work for them. Guildford has a population of 129,701 served by three dry cleaning and laundry shops. These existing shops wait for customers to bring their garments in and pick them up later. Customers have to drive cars to town, find parking places, carry their clothes or large items such as curtains, blankets, etc. to the shop, and to queue for being serviced. Then they must repeat this boring process when they come to collect their items. Moreover, these shops are only open from 9am - 6pm, and closed on Sunday, which are almost the same working hours of offices; most inconvenient for customers especially those with full-time jobs.

By understanding and addressing this need, our new dry cleaning, laundry and alteration service will be established, providing door-to-door service free of delivery charge. We make our customers' lives simpler by saving them time, and eliminating waiting in queues, parking problems, forgetting to collect clothes, missing meals, and going home late.

7.2 Marketing Strategy

Place: Trading directly with customers, conveniently in the customers' houses in Guildford. We are choosing to not rent a shop in high street in the town centre, thereby reducing costs. Guildford Dry Cleaning Service will receive clothes from and return them to customers' houses. Requests for urgent situation pickups and deliveries will be accommodated, and a nominal fee charged.

Product: Free home pickup and delivery service, coming to customers' house between 6 - 9 pm twice per week. We provide convenience and high quality dry cleaning, laundry, and alteration services.

Price: Normally, new businesses set their initial prices lower than their competitors. In our situation however, the business has higher costs for our delivery service and promotions to increase customers' awareness and establish our brand name. We will set our prices to match those of our competitors. The pricing scheme is based on a per-service price. Moreover, the business targets working and professional customers who often pay less attention to price than the quality and convenience of service. Kelvin Clancy (in Kotler, 2003) shows that only between 15 and 35 percent of buyers are price sensitive. People with higher incomes are willing to pay more for features, customer service, quality, and convenience.

Promotion:

Advertise our new service in the Surrey Advertiser, the Internet, public areas such as buses and train stations, shopping centres and supermarkets etc., and drop advertising material into families' mailboxes.

Offer 10% discount as an incentive for customers who sign one-year contracts. Issue coupons with lower price for loyal customers.

8. Sales Forecast

Sales forecast gradually increase over the year and comprise total sales of £324,700.

According to forecasts, turnover of total market continues to rise and the price of dry cleaning and laundry services also increases from 5-10%.

Assuming the sales figure of three consecutive years, we can draw the following table:

Sales ForecastYear 1 Year 2 Year 3

SalesDry Cleaning £116,89

2 £151,960

£197,548

Laundry £185,079

£240,603

£312,784

Alteration Service £22,729 £29,547 £38,412 Other £0 £0 £0 Total Sales £324,70

0 £422,110

£548,744

Direct Cost of Sales Year 1 Year 2 Year 3Dry Cleaning £14,027 £18,235 £23,706 Laundry £14,806 £19,248 £25,023 Alteration Service £6,819 £8,864 £11,524 Other £0 £0 £0 Subtotal Direct Cost of Sales £35,652 £46,348 £60,252

9. MANAGEMENT SUMMARY

The owner of the business will be director and accountant working full time.

A laundry expert will be employed and will be in charge of the operation and the quality of garment cleaning. Workers will report to the laundry expert who reports to the owner.

9.1 Personnel Plan

Through the consultation of British Cleaning Council, the term of reference of a laundry expert and workers are prepared. Employment information will be advertised in the newspaper. The laundry expert and two part-time workers who have experience in laundry work will be employed.

The laundry expert will be in charge of the operation and the quality of garment cleaning. Workers will be responsible for cleaning and classifying work and have the duty to report daily work to the laundry expert. The expert has to report their working results and problems to the director.

Two part-time drivers for picking up and delivering clothes work from 17.30 to 21.30, Monday through Saturday.

The staff should be able to carry out working conditions and requirements:

Understand and apply dry cleaning and washing processes Meet set standards by following instructions Work in hot, humid surroundings Perform the same work continuously Overtime may be required during peak seasons such as spring and autumn

9.2 Important Assumptions

Sales increase gradually over the 12 months showing the positive trend of sales. Guildford Dry Cleaning is steadily gaining market share.

Gross profit and net profit rise proportionately to sales revenue.

BUSINESS PLAN 2

Studies have shown that as many as 30% of home users leave their computers on

all the time, which means for these people, switching to a Go-Green-PC could save

as much as £342 in electricity over the next 4 years in UK.

Go Green PC manufacture and supply a range of low energy, very small, eco friendly computer systems and provide a variety of energy saving computer solutions. With all our computer systems we aim to create the absolute best mix of affordability, performance, simplicity, and energy efficiency. We are working as MARKETER OF GREEN PC TECHNOLOGY.

Switching to a Green PC can save you money on your electricity bills and help to reduce your carbon footprint.

All our energy efficient computers and servers are manufactured in Derby by Go Green PC to a very high standard using the latest low energy, high quality energy efficient component.

With the increasing cost of electricity, awareness of energy efficiency and carbon footprints is it time you considered using a go-green-pc.

Business Solutions - Never has the management of energy consumption within IT been more important for business organizations.

At Go Green PC we offer a variety of business solutions to reduce the cost of your current IT power usage, and lower your carbon footprint.

From small businesses through to large corporate clients we can help you to reduce your electricity bills and your carbon footprints.

Leasing Options - We are able to offer competitive leasing options on all these products and will work as lease masters. .Lease master offers vast technology finance experience in an ever changing and rapidly evolving marketplace. With national representation and facilities with key funders they offer a complete service and the company has seen substantial year on year growth. Clients range from large nationals to small & medium size enterprises including:

Local Government Education

Small & Medium Ltd companies

Large Corporates

Professionals, Sole Traders & Partnerships.

Some facts related to our leasing options:

What is a lease?

It is a simple agreement between the finance company and the user. We arrange

to buy the equipment from the supplier and lease it to you over an agreed period

for a regular fixed installment. A typical lease runs from 3-5 years.

Why should any business lease?

You probably remunerate your staff on a "pay as you earn" basis, normally via a

monthly salary. Leasing allows the user to do the same and use IT as it works for

user Company - as an overhead rather than a rapidly depreciating asset. And as

business grows and develops, so does technology. Leasing allows you to take

advantage of these changes without dramatic changes in budget.

What are the major advantages of leasing?

Improved cash flow, making budgeting and forecasting easier.

Save Corporation Tax - all rentals are 100% tax deductible.

Leave your other lines of credit in place so you can use them as and when

required.

You can equip your businesses today and use the working capital to develop

your business tomorrow - and get a higher return on the cash investment.

What happens if user requirements change during the lease?

Our flexible agreements enable you to keep pace with the ever-improving

hardware and software products available to IT. We can add to, exchange

and even upgrade your whole system, usually with only a small increase in

your installments.

What sort of businesses takes advantage of a lease?

Those ranging from the largest of blue chip corporations to the smallest

businesses choose to lease. On the whole these are companies that

recognize the benefits of a lease over a "cash" purchase. Our lessees also

include schools, universities, local authorities and the NHS. Leasing is a

universally accepted finance option for any size and type of business.

Local Authorities, Education, Schools

all these organizations have to keep pace with developments in I.T. Often

budget constraints do not allow capital projects to go ahead. Revenue

budgets need to be utilized; leasing allows access to the technology of today

and our upgrade facility removes the problem of replacing outdated

equipment.

All our computer systems are carefully manufactured using the latest energy

efficient quality components and are very small compared to a normal desktop

system. They are very quiet and consume a fraction of the electricity compared to

a standard PC.

Did you know...?

Over 40% of the UK adult population regularly use a PC at work, and as many as

one-sixth (18%) of these computers are never switched off at night or weekends,

with a further seventh (13%) not switched off on some days each week.

The resulting energy wastage is estimated to amount to 1.5 billion kWh (1.5TWh) of

electricity per annum, at a cost in the region of £115m.

Never has the management of energy consumption within I.T. been more important for

business organizations. Ensuring your company is reducing its carbon footprint is both

commercially attractive and environmentally friendly.

What we can do for user business:

Produce a report of your current IT systems energy usage

Reduce energy costs and help reduce CO2 emissions

Install energy saving software and advise on power usage

Supply & install intelligent power switching devices

Provide rapid return-on-investment through network-wide power savings

Identify the areas of your IT infrastructure that require review and/or investment

BIBLIOGRAPHY

1. http://europa.eu/abc/european_countries/eu_members/unitedkingdom/index_en.htm

2. en.wikipedia.org/wiki/Politics_of_the_United_Kingdom3. http://www.nriol.com/welcome2uk/politics-in-uk.asp4. http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/india/5. http://en.wikipedia.org/wiki/Foreign_relations_of_the_United_Kingdom 6. http://www.nationsencyclopedia.com/economies/Europe/United-Kingdom-

INDUSTRY.html#ixzz0gG8L0P.7. http://news.bbc.co.uk/2/hi/europe/country_profiles/1038820.stm8. http://en.wikipedia.org/wiki/File:Flag_of_the_United_Kingdom.svg9. http://en.wikipedia.org/wiki/United_Kingdom10.http://en.wikipedia.org/wiki/United_Kingdom#Law_and_criminal_justice11.http://www.economywatch.com/world_economy/united-kingdom/12.The UK financial system: Theory and Practice, By M.Buckle, John l. Thompson

Page n.54, 55, 87, 88. Third Edition 198813.The UK monetary and financial system: An Introduction, By John Gilbody. 1988.14.http://repec.org/mmfc05/paper45.pdf15.http://www.economywatch.com/economic-conditions/uk.html16.http://www.hepcindia.com/unitedkingdom.htm17.http://www.statistics.gov.uk/downloads/theme_compendia/foop05/

Foop_Demographic_profile.pdf18.http://www.indiaretailing.com/Expert-view-private.asp19.http://www.imsme.org/ViewFolder.aspx?

FolderName=Business_Environment&FolderID=14920. http://www.earthtimes.org/articles/show/uk-offers-compelling-case-for-

investment-global-business-leaders-say,1174054.shtml