[The Corporate Failure in UK Retail Sector.]

by

[Name of the Institute]

[Name of the Subject]

CHAPTER 1: INTRODUCTION

The purpose of this study is to expand the boundaries of the researcher's knowledge by conducting analysis of corporate failure in the UK retail sector. There are many different causes of retail business failures in the UK; however, most of them are related to the inexperience or incompetence of managers in retail stores (Cuthbertson & Hudson 1996, 301-302). The main causes of retail business failure are:

Lack of leadership

Inadequate management and the challenges of globalization

Deficiencies, such as taking the wrong decisions, lack of professionalism.

Lack of competitive products

Lack of appropriate policies for product development, marketing and distribution

Weakness in the management of finances

Lack of adequate financial structure in the short and long term

Acute competition

External factors beyond the scope of business management

Each of the deficiencies listed above cause the demise of retail companies in the UK (Curwen 1990, 306-345). Each of the deficiencies listed above cause the demise of retail industry in UK (Curwen 1990, 306-345). These weaknesses can be solved if managers have professionalism, authority, and resources to drive the retail stores towards better performance. Currently the retail sector of every country in the world undergoes a transformation that seeks new ways of organizing and structuring that meet the challenges of globalization of markets (Anonymous, Pp. 54-55, 2008). Companies are seeking first, how to achieve international standards in their business and second, how to achieve levels of operation to be recognized as "world class companies" in its line of business. Economic crisis forces organisations to invent and build productive emerging forms of organisation of the work process. Inadequate planning within the administration could definitely lead to failure. This could be considered as the main cause of corporate failure in UK retail industry. The main causes of administrative failure in retail industry include, Lack of preparation of company executives, Lack of vision across borders (commercial and business area), No long-term planning and inability to compete with competitors in terms of quality and market levels (Appiah & Abor, 2009, Pp.432-444). Apart from internal failures in the retail industry, external factors are also causing failures in the industry, it includes: Inflation, Debt due to currency devaluations, competition between commercial and industrial sectors of the country and lack of government protection to domestic firms (Daily, 1994, Pp. 263).

Management of finances is also a major issue that is causing failure of UK retail industry. The weaknesses in the management of finances fall into two categories, the first is about weaknesses of the system relating to business acquisition, and the second is related to weak financial structure of the retail industry (Hossari, 2007, Pp. 76). The retail stores usually have two funding cycles. One is related to short-term money, known as "working capital”. It is used for the daily operation of the business. The working capital should be monitored to minimize investment, so that shareholders earn higher returns on their assets. Following are main issues of working capital in retail industry:

Lack of cash due to ...