Unit 1 – The Business Environment
Task 2a – Describe the influence of two contrasting economic environments on business activities,
within a selected organisation.
Jaguar Land Rover is a business started in the UK, meaning it has significant ties with the island. This
being the case, Jaguar Land Rover make up a modest section of the UK in terms of revenue as well as
employment. Due to this, the UK government would not want the company to leave the country, as
well as wanting them to increase jobs in lower employed areas. One incentive was the government
funding 25% of the expansion of the £5 million technology plant in Solihull. They also assisted in
Whitley, giving Jaguar Land Rover £1 million to create over 1000 jobs, and helping to revive the local
community. This funding in turn persuaded Jaguar to invest a reported £3 billion in their Whitley
plant to help them meet an aim of ultra-low emissions and technologies. These incentives would
mean that Jaguar Land Rover would want to conduct business activities in the UK as they would have
to pay significantly less for the buildings and employment of workers.
On top of this, Jaguar Land Rover also gained a 5 year tax exclusion to help them gain back some of
the money from the expansion. The UK would want Jaguar Land Rover to stay in the UK because
around £70 billion of the UK revenue comes from car sales. This would mean that Jaguar Land Rover
would have a large reason to employ and expand in the UK, as a 5 year tax break would result in an
extremely large amount of money being saved by Jaguar Land Rover.
Jaguar Land Rover recently opened a factory in China, making a 50/50 partnership with government
owned Chery Automotives to produce multiple cars in China. They did this due to the Chinese
authorities imposing a 300% import tax on goods coming into the country. This is meant as a way of
stimulating Chinese made goods in the country, and to persuade leading producers of goods, such as
Apple, or Jaguar Land Rover to build factories in China. Despite this being the case, while Jaguar Land
Rover were importing cars with the 300% import tax, 30% of all exported sales were to China. In
addition to not having to pay import tax due to the vehicle being created in China, the government
also gave the company a 5 year tax free period to stay in China, which is similar to the UK
government. In the last couple of years Jaguar Land Rover sales in China dropped significantly, by
around 20%. Many economists believe that this is due to the import tax persuading the wealthier
Chinese customers to buy a car due to the status associated with the cost of the car, and making it
more widely available dissuaded these customers from purchasing another. With the lower
customer demand for vehicles, and the factory not making a profit in the years it has been active,
Jaguar Land Rover is considering pulling resources from China to look for another market with a
higher return
Task 2a – Describe the influence of two contrasting economic environments on business activities,
within a selected organisation.
Jaguar Land Rover is a business started in the UK, meaning it has significant ties with the island. This
being the case, Jaguar Land Rover make up a modest section of the UK in terms of revenue as well as
employment. Due to this, the UK government would not want the company to leave the country, as
well as wanting them to increase jobs in lower employed areas. One incentive was the government
funding 25% of the expansion of the £5 million technology plant in Solihull. They also assisted in
Whitley, giving Jaguar Land Rover £1 million to create over 1000 jobs, and helping to revive the local
community. This funding in turn persuaded Jaguar to invest a reported £3 billion in their Whitley
plant to help them meet an aim of ultra-low emissions and technologies. These incentives would
mean that Jaguar Land Rover would want to conduct business activities in the UK as they would have
to pay significantly less for the buildings and employment of workers.
On top of this, Jaguar Land Rover also gained a 5 year tax exclusion to help them gain back some of
the money from the expansion. The UK would want Jaguar Land Rover to stay in the UK because
around £70 billion of the UK revenue comes from car sales. This would mean that Jaguar Land Rover
would have a large reason to employ and expand in the UK, as a 5 year tax break would result in an
extremely large amount of money being saved by Jaguar Land Rover.
Jaguar Land Rover recently opened a factory in China, making a 50/50 partnership with government
owned Chery Automotives to produce multiple cars in China. They did this due to the Chinese
authorities imposing a 300% import tax on goods coming into the country. This is meant as a way of
stimulating Chinese made goods in the country, and to persuade leading producers of goods, such as
Apple, or Jaguar Land Rover to build factories in China. Despite this being the case, while Jaguar Land
Rover were importing cars with the 300% import tax, 30% of all exported sales were to China. In
addition to not having to pay import tax due to the vehicle being created in China, the government
also gave the company a 5 year tax free period to stay in China, which is similar to the UK
government. In the last couple of years Jaguar Land Rover sales in China dropped significantly, by
around 20%. Many economists believe that this is due to the import tax persuading the wealthier
Chinese customers to buy a car due to the status associated with the cost of the car, and making it
more widely available dissuaded these customers from purchasing another. With the lower
customer demand for vehicles, and the factory not making a profit in the years it has been active,
Jaguar Land Rover is considering pulling resources from China to look for another market with a
higher return
