Unit 1 – The business environment
P1 – describe the type of business, purpose, and ownership of two contrasting businesses.
I have chosen two contrasting businesses, Cancer Research UK, and Lee Fish Bar. I will explain the
differences in types, purposes and ownerships between the two businesses.
Cancer Research UK
Cancer Research UK (CRUK) is a cancer research and awareness charity in the United Kingdom
founded on the 4th of February 2002 by the merger of The Cancer Research Campaign (founded in
1923 as the British Empire Cancer Campaign) and the Imperial Cancer Research Fund (founded in
1902). A charity is an organisation set up to raise funds and support other people for a good cause.
The headquarters and place of registration is in Stratford, London. Working on a local, national, and
international basis, CRUK is the largest global independent research charity and is the largest single
charitable funder at The Institute of Cancer research. They are publicly funded through grants,
donations, fundraising groups, legacies, and corporate partners. In 2019/2020, they raised £656
million - £423 million from donations, £108 million of sales revenue from their stores, £7 million
from their portfolio of investments, and £118 million from royalties and grants. Their purpose is to
reduce the number of deaths from cancer, with a vision to bring forward the day when all forms of
cancer can be cured. They conduct and fund research into the prevention, diagnosis and treatment
which are performed by their own employees and grant-funded researchers in institutes,
universities, and hospitals across the UK. Furthermore, they make information about cancer more
accessible to everyone (such as on the internet and posters) and they run campaigns aimed at
raising awareness and influencing government decisions/policies related to cancer and research.
CRUK is a not-for-profit organisation with 40000 regular volunteers as of 2015 and is thus not profit
motivated, but rather generates income to cover the running costs of business operations with
surplus revenue going towards combating cancer, benefitting the wider public. They are a company
limited by guarantee, meaning that the business’s liabilities are covered by members, acting as
guarantors (trustees), instead of shareholders of a conventional limited company. Cancer Research
UK operates in the tertiary sector, as their activities involves providing services.
Lee Fish Bar
Lee Fish Bar is a small, family-run, private limited company established in 2002 with a purpose of
selling food and drink products, operating on a local scale in the private sector in Lee, London as a
licenced restaurant. They specialise in the sale of fish and chips, but their menu also includes a
variety of other food and drink products such as fried chicken and burgers, with everything ranging
from £1 to £8. Private businesses are owned by private citizens, in this instance it is owned by a sole
trader. In 2002, they bought the small retail premises and paid all the other necessary start-up costs
to begin trading. The business immediately became successful because of the staffs’ dedication and
positive reviews from customers in the local area. The business is restricted in ownership and run as
a family business so shares cannot be purchased by others through the stock exchange but
depending on the importance and relevance of the person wishing to buy a share, they may be able
to do so through internal negotiations with the sole trader. A sole trader has full control over the
business and its decisions but would also be responsible for the business’s liabilities. Being a private
business also means that they are profit motivated in their operations, aiming to sell more to make
greater amounts of sales revenue while reducing costs as much as possible to make a profit.
Furthermore, this also means that they are more likely to take risks. They only have one restaurant
and are not part of a chain of restaurants although being only one of the few businesses of its type in
,the area, there is little competition locally, so Lee Fish Bar sees a sustained and stable flow of
customers.
All businesses in the economy come under at least one of four sectors:
The primary sector refers to the extraction of raw materials/natural commodities and production of
unfinished, low value goods, mostly involving physical work (e.g. coal mining and farming).
The secondary sector is concerned with turning raw materials/natural commodities into finished
goods. For example, the manufacturing of products and construction.
The tertiary sector refers to the action of providing services, both business-to-business (B2B) and
business-to-consumer (B2C) (e.g. sales of goods, advertising, transportation, and insurance).
The quaternary sector relates to the industries providing training, education, information, and
research & development.
Cancer Research UK operates mainly in the quaternary sector, as their key activities involve
providing informational and educational services and research & development concerning cancers.
However, they are also involved in the tertiary sector as they sell clothing, home, and accessory
items in their shops and online.
Lee Fish Bar operates in the tertiary sector as they provide food and drink services to the local
community.
Sources:
https://www.cancerresearchuk.org/
https://companycheck.co.uk/nonLimitedCompany/1070324/LEE-FISH-BAR/summary
https://www.zomato.com/london/lee-fish-bar-lee/info
P2 – describe the different stakeholders who influence the purpose of two contrasting businesses.
A stakeholder is any party (individual, group, institution etc) with an interest in a business who can
influence and/or be influenced by the business’s activities and decisions. There are four types of
stakeholders: primary stakeholders, secondary stakeholders, internal stakeholders, and external
stakeholders.
Internal stakeholders – these are people within the business (e.g. managers, employees, owners
and investors). These stakeholders are directly involved within the business.
External stakeholders – these are people not within the business who are affected by the business’s
activities and decisions (e.g. customers, and suppliers). They care about the business because it can
affect them. For example, suppliers may be interested to know about the business’s financial
position and performance to know if they are going to make payments on time.
Primary stakeholders – these stakeholders participate directly in financial transactions with the
business. This may include employees, owners, suppliers, communities, trade unions and the
government.
Secondary stakeholders – these tend to be external stakeholders; they do not have a direct
involvement in the financial transactions within a business. They are still affected by the business’s
activities and decisions. This may include the public, communities, and the media.
, Stakeholders influencing the purpose of Cancer Research UK
Key stakeholders: Influence:
Customers Customers looking for the best value, highest quality products
while also wishing to spend their money on a charitable
organisation may be satisfied with Cancer Research UK and
would recommend it to other people, leading to greater sales
revenue for the business, helping them to achieve their aims
and objectives a lot faster.
Employees Employees work within Cancer Research UK to carry out their
given tasks and are provided with a wage in return. The
productivity of the business is largely dependent on its
employees so if they can work at a more efficient rate then
more activities can be performed in a shorter time leading to
lower long run average costs.
Suppliers Suppliers who supply to Cancer Research UK will want
continuous orders and prompt payment and have a large
impact on the cash flow of the charity. Suppliers may be
inclined to reduce their prices or offer deals if CRUK are loyal
customers who would in turn make it easier to serve their
purpose.
Local and national communities The community will have experience with the business and are
external stakeholders so they can provide the employees with
feedback and other things they know to help improve Cancer
Research UK.
Trade unions Trade Unions represent groups of employees who exist to fight
for better wages and working conditions, this could potentially
affect the performance of the workforce within CRUK if they
fail to satisfy the workers’ needs.
Government The government provides grants to Cancer Research UK, having
a major positive impact on their finances which ultimately
leads to the benefit of the public. They receive tax reliefs, so
the charity is not taxed on their income if it is used for
charitable purposes.
Stakeholders influencing the purpose of Lee Fish Bar
Key Stakeholders: Influence:
Customers Customers are Lee Fish Bar’s main source of income, they buy
food and drink products, and Lee Fish Bar receives sales
revenue in return, which they need to survive and fund any
future expansions or improvements in the business. An influx
of customers means that Lee Fish bar would have a better
financial position.
Employees Lee Fish Bar is a family-run business, so its employees are
closely related to the business. This means that they work to
improve Lee Fish Bar as it directly affects their livelihoods. If
the employees provide a better-quality service, then there will
be more loyal customers and people are more likely to
recommend it to others, this increase profits.
Suppliers Lee Fish Bar buys in their cooking supplies to make the food. As
selling food and drink is their primary activity, they rely on
