Appunti Inglese

Retail trade involves the sale of goods in small quantities directly to consumers, not for

resale. A retailer buys goods in small quantities from wholesalers and sells them to

consumers. The main forms of retailers include:

Shops: Where customers receive personal assistance from shop assistants.

 Supermarkets, department stores, and discount stores: Where customers serve

 themselves and find a wide variety of products.

Nowadays, the internet and e-commerce technologies provide new distribution channels.

Through the internet, suppliers can advertise products, provide transaction details (prices,

payment methods, delivery), and enable customers to order from computers or

smartphones. Additionally, various retail chains are possible:

Producer consumer

Manufacturer consumer

Producer manufacturer retailer

consumer

Producer manufacturer wholesaler

consumer

c- Consumption

• Goods (always plural noun) and merchandise (always singular noun) mean goods of all

kinds intended for sale;

• Commodity is specially used for useful and necessary articles, (food, drink, etc);

•Wares is used for manufactured goods.

Product Identification and Protection: Summary

In primitive economies, land and farm products were bartered without specific names.

Eventually, they were traded for money and later identified by their geographic origin, such

as silk from China. Starting in the 18th century, with numerous inventions, three legal

protections became essential: patents, trademarks, and copyrights.

Patent: Provides legal protection for inventions, preventing others from creating

 similar products.

Trademark: Protects brand names and logos, registered with a government office

 to prevent misuse by competitors. Famous examples include Apple's trademarks.

Copyright: Protects the intellectual property of authors, including writers,

 photographers, and composers, from being copied.

Some trademarked names have become synonymous with the product type itself, like the

biro, Walkman, and Scotch tape. Modern products, resulting from extensive research,

development, and investment, require these legal protections to safeguard company

investments.

Demand and Supply: Summary

Products are made to be sold and consumed.

Demand: Reflects how much consumers want to buy. Individual actions make little

 difference, but collective actions can change the market. Market demand is the sum

of all individual buyers' demands.

Supply: Represents the amount of a product offered for sale at a certain time.

 Producers can usually increase supply when demand rises, but some products, like

diamonds, have production limits. Market supply is the sum of all individual sellers'

supplies.

Factors Affecting Demand and Supply: Key factors include price, income

 availability, fashion, tastes, and promotion. Since supply often responds to demand,

factors influencing demand typically impact supply as well.

Types of Economy: Summary

There are three essential types of economic systems operating globally, differentiated by the

extent of government intervention: centrally planned economy, free market economy, and

mixed economy.

1. Centrally Planned Economy:

Description: The government determines what and how many goods and

o services are needed and arranges their production and distribution.

Example: North Korea.

o Drawbacks: Lack of competition can lead to poor management, inferior

o products, supply problems, and shortages of essentials like food and

clothing.

2. Free Market Economy:

Description: Prices and availability of goods and services are determined by

o supply and demand with minimal state interference. Private companies

compete freely, and the market decides purchases.

Example: Countries in Southeast Asia, such as Singapore.

o Note: Governments may still intervene to control business activities with

o significant national economic implications.

3. Mixed Economy:

Description: Combines elements of both free market and centrally planned

o economies. Private companies compete for most goods and services, but the

government typically provides public transport, education, healthcare, and

utilities.

Examples: Italy and the UK.

o

Publicly-Owned Businesses: Summary

Governments are major employers and provide various services, primarily funded through

taxation. They may also run enterprises that offer services or sell products, the extent of

which varies by the country's economic system.

1. Centrally Planned Economies:

All means of production are government-owned.

o The government decides on production and distribution, with prices set by

o the government rather than supply and demand.

Consumers have no influence on prices.

o

2. Free Market Economies:

Market forces determine the needed goods and services.

o The state runs only essential enterprises, such as social or national security

o services.

3. Mixed Economies:

Governments provide public interest services and run enterprises.

o Public enterprises are typically not profit-driven, with the state covering

o losses.

Managers are government-appointed and subject to political changes or

o pressures.

Historically, many European governments owned numerous companies, but the trend over

the past two decades has been towards privatization. These companies are often converted

into Public Limited Companies (PLCs) with shares traded on the Stock Exchange.

Types of Business Ownership: Summary

This chapter discusses setting up a business and company structure.

1. Definition of a Company:

A company is a management unit that trades under a specific name and

o manages the use of land, labor, and capital.

It makes decisions on production methods and product marketing.

o A company is distinct from production units like factories, farms, or mines

o but may control multiple production units.

Companies engage in activities across various areas such as research and

o development, marketing, production, sales, and customer service.

They vary in size from individual entrepreneurs to large firms employing

o thousands.

2. Types of Traders:

Sole Traders: Individual merchants or shopkeepers operating under their

o own name.

Trading Firms: Associations of people doing business together.

o

Both types aim to meet demand by buying and selling goods, often with the help of

employees or intermediaries.

3. Intermediaries:

Direct trade between firms is rare; intermediaries often facilitate business

o transactions.

Agents: Manage business affairs for others and include:

o General Agents: Handle general affairs.

 Special Agents: Employed for specific transactions.

 Sole Agents: Exclusively represent a firm in a region.

 Shipping and Forwarding Agents: Send goods to other places.

 Agents earn a commission for their services.



Commercial Travellers: Obtain orders or sell goods while traveling. They

o earn a fixed salary plus potential commissions.

Brokers: Act as intermediaries between buyers and sellers, earning a

o percentage called brokerage. Types include stockbrokers and ship brokers.

Proxy: Authorized to act and sign on behalf of another person.

o

4. Retail Employees:

Shopkeepers employ assistants and, in larger shops, shop walkers to guide

o customers.

Merchant Houses: Summary

To aid in the distribution of their products, manufacturers often sell through merchant

houses or export agents.

Functions of Merchant Houses:

 1. Buying for Sale Abroad: Purchasing goods on their own account to sell

internationally.

2. Buying on Behalf of Businesses: Purchasing goods abroad for domestic

business houses.

They typically handle general merchandise and can act as both buyers and sellers.

Staffed by trading experts with overseas connections, merchant houses charge a

small commission for their services. This method spares manufacturers the

complexities of distribution, insurance, and shipping.

Direct Method: Large industrial companies often establish their own export

 departments, managing packing, insurance, shipping, and appointing their own

agents overseas.

Types of Business Ownership: Summary

This chapter discusses the various forms of business ownership, focusing on sole traders,

partnerships, and companies/corporations.

Sole Trader

Definition: A business owned and operated by one person with unlimited liability.

 Characteristics:

 Simple to set up with full control and decision-making power.

o Common among small-scale businesses like market stall owners,

o shopkeepers, window cleaners, carpenters, and car mechanics.

Advantages:

 Direct oversight of all operations.

o All profits go to the owner.

o Quick decision-making.

o

Disadvantages:

 Unlimited liability risks personal assets if the business fails.

o Limited financial resources and capital.

o No one to share workload or ideas with.

o

Partnerships

Definition: An association of two or more people or businesses sharing

 responsibilities and profits.

Characteristics:

 Common in small retail and service businesses like restaurants or courier

o firms.

Partners contribute capital and share profits and losses.

o

Types:

 Unlimited Partnership: All partners have unlimited liability for the

o business debts.

Limited Partnership: Some partners only contribute capital and have

o limited liability, while at least one partner must have unlimited liability.

Advantages:

 Shared responsibilities and workload.

o Combined capital and expertise.

o

Disadvantages:

 Unlimited partners risk personal assets.

o Potential for disputes among partners.

o

Companies/Corporations

Definition: An association of investors (shareholders) with limited liability.

 Characteristics:

 Formed by at least two shareholders.

o Shares represent capital investment, and profits are distributed as dividends.

o Shareholders’ liability is limited to their investment.

o

Types in the UK:

 Private Limited Company (Ltd):

o Shares not quoted on the Stock Exchange.

 Shares can only be sold with all shareholders' agreement.

 Limited liability for shareholders.



Public Limited Company (Plc):

o Shares can be freely bought and sold on the Stock Exchange.

 Requires Plc designation.

 Limited liability for shareholders.



US Equivalent: Incorporated companies (Inc), registered with state authorities and

 regulated by the SEC for share sales.

These business structures offer various advantages and disadvantages, depending on the

needs for control, liability, and capital.

Companies can expand through:

Franchising or licensing

 Setting up a joint venture

 Becoming a holding company

 Becoming a multinational

 Becoming a cooperative



Corporate Structure Can Change When Companies Form an Alliance

Many co