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Unit 1: Exploring Business
Understanding Business (BUSI1649)
University of Greenwich
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In this assignment, I will be contrasting the features of two contrasting businesses, their purposes, how they are influenced by stakeholders and describe their communication with stakeholders. The two businesses I chose are Tesco and London & Quadrant (L&Q).
Features of TESCO
Tesco is a Public Limited Company with stores all around the UK. Tesco is a multinational groceries business that operates in 12 countries across Asia and Europe with their market leader in the UK. There are many things that differentiate Tesco from other multinational companies and one of it is that it focusses not on its investors but on its customer service. The one in Woolwich is a very big supermarket in the middle of the centre so it attracts a lot of passer-by customers. One of the features that make them successful is that their strategy focuses on the changing customers need to help drive their growth. Tesco has always been finding ways to meet its customers’ needs. They do that by providing nutrition information on the labels of their own products, by going through the use of additives in their goods and providing healthier alternatives to standard products. They also come up with innovation solutions such as their app on mobiles to make it easier for customers to shop in shop or online. This are some of the things Tesco do to satisfy their customer needs and it has enhanced their customer service reputation.
A Public Limited Company is a large business and it usually very known after the registration with Company House. It sells shares to the public through a Stock Exchange. To set up one of this business, the owners must at least be 2 or more and they must be registered with Company House. A limited company gives limited liability to its owners and management and as a public company it grants the owners to sell shares to the investors which can be very beneficial in raising a capital. Public limited companies are usually a chain of traders who trade on the stock exchange.
Advantages of it being a PLC is that the business is a separate entity from the owners so in case the business is in debt, the owners are not liable for it. Unlike Private Companies, the shares of Public companies are easily transferable to the shareholders. Banks are more likely to fund their business because PLC businesses are well known and could get money from investors. PLCs can sell shares on Stock Exchange to raise capital so they can always grow bigger and bigger. And last, with a lot of shareholders, they can exchange ideas and work together with their different skills in the specific area and this will help bring new developments to the business.
Disadvantages include a lot of legal procedures to go through to set it up and this could result in it being expensive and time consuming. To set it up the shareholders need a minimum of £50000. With a lot of shareholders, it might be difficult to reach to a decision since they all have the same power to decide whether to do or not do something regarding the company. This can be time consuming and might slow down the business. Lastly, they might face management difficulties since they are a large sized company.
The purpose of many businesses is to produce, sell products and/or offer services to customers. Other organisations such as charities or voluntary organisations exist for social or environmental reasons. Another purpose of businesses is to satisfy their customers’ needs which are the wants and desires of customers. Businesses satisfy customers’ need by offering goods or service they demand. For example, there might be a need of a pizza shop in my local area as there is only one shop that
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sells pizza. This is a gap in the market in my local area and businesses will try satisfying the need of the customers by setting up one in the local area.
The purpose of Tesco is to provide great products and value for money (balance of quality and price of the product) to their customers. Their new core purpose is ‘Serving Britain’s shoppers a little better every day’ which means giving customers the best shopping experience.
Tesco is part of the tertiary sector. The tertiary sector is a very important sector as it sells good and services to the members of the general public. Tesco offers both as it sells grocery products, clothes, homeware and electronics and offers services such as insurance, mobile phone services and opticians. There are other sectors in the industry and they are primary secondary and quaternary. The primary sector extracts raw materials for example ‘’metals and coals have to be mined, oil drilled from the ground, rubber tapped from trees, foodstuffs farmed and fish trawled’’. The secondary sector processes the raw materials produced by the primary sector for example ‘’ making plastics from oil or building houses, bridges and roads’’. The tertiary sector provides goods and services to the members of the general public. This involves selling goods such as homeware, electronics, grocery products and clothes and the services might include insurance, transport and education. The last business sector is quaternary which also provides support services (bbc.co/schools/gcsebitesize/business/aims/aimsandactivitiesrev3.shtml).
Tesco is a large international business with stores in 12 countries. Tesco has over 3500 stores and over 310000 colleagues only in UK deserving its position as the UK’s leading supermarket.
One of the reason Tesco is successful is that their strategy focuses on the changing customers need to help drive their growth. Tesco has always been finding ways to meet its customers’ needs. They do that by providing nutrition information on the labels of their own products, by going through the use of additives in their goods and providing healthier alternatives to standard products. They also come up with innovation solutions such as their app on mobiles to make it easier for customers to shop in shop or online. These are some of the things Tesco do to satisfy their customer needs and it has enhanced their customer service reputation.
Organisational structures Organisational structure is a model used to describe a progressive system inside an organisation. It distinguishes every job role, its function and where it reports to inside the association. This structure is produced to set up how a business works and helps it in acquiring its objectives to take into consideration future development. Types of structures include: Hierarchical, Flat and Matrix.
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Marketing director is responsible for the overall marketing function and its aims and objectives. Advertising manager is in charge of advertising and liaising with agency staff over marketing campaigns Market researchers are responsible to find out customer opinions on current and upcoming products and services. Within the production area, the jobs involved are: Production director is responsible for the entire production and its operations. Operation manager is responsible for the monitoring of all goods as they need to be ready as scheduled and to the quality required. Purchasing manager is responsible for the acquisition of raw materials. Chief engineer is responsible for all the maintenance staff and for scheduling equipment maintenance and recommending modifications.
Tesco’s aims and objectives (student-notes/2012/04/30/tescos-aims-business- coursework)
Tesco has a lot of aims and objectives and they are as follow:
- To grow the UK core
- To be an astounding international retailer in stores and online
- TO be as strong in everything they sell
- To grow retail services in all their markets
- To put their responsibilities to the communities
- To be a creator of highly valued brands
- To build their team to create more value
Stakeholders
Stakeholders are anyone with an interest in the business. A stakeholder is an individual or group of people that has attention in a particular company and these individuals can have a degree of power or an influence in the business’ activities, goals and guidelines. There are two different types of stakeholders: external stakeholders and internal stakeholders. An external stakeholder is an individual such as a customer that impacts or influences the company but is not a member of the organisation. However, an internal stakeholder is someone within the business that some degree of power in it for example employees.
Tesco has a lot of stakeholders. The first one is an external stakeholder and these are the customers. Customers are very important as stakeholders as they are the main source of income of many businesses. Customers are all the people who buy goods and services from Tesco. Customers want an excellent shopping experience when they go to Tesco, they want good value of money meaning that the quality of the products balance with the price, and they also expect the goods to be in a good state when they are buying them. Customers influences Tesco as they are a very customer oriented business, so they try to offer goods and services the customers demand. Another way
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customers influence Tesco is by deciding to shop at their store. If for any reason, the customers stopped buying Tesco’s products, the business would lose their main source of income and might then decide to shut the business or find new ways to attract the customers to the business.
The next is an internal stakeholder: employees. Employees are everyone that works for Tesco for example assistants, store managers and receptionists. Employees are interested in the business as they might lose their job if the business were to decline in sales. Employees have different needs such as fair wages, promotions if they were to do a good job in the business, training when they are starting as they will need to be guided as to how to operate in their sectors and discounts if available. They would likewise expect that their managers will have a positive relationship with them, to make them feel they are invited and part of the workforce. They would impact on the achievement in the business, as by their efforts and proficiency in the occupation.
Another important stakeholder of Tesco’s are shareholders and they are internal stakeholders. These individuals can be members of the public who might invest in Tesco to get a profit or dividend from the business. Shareholders can also be companies or organisations that own a share in the business’s stock. Shareholders can have a degree of power depending on the shares they own in the business and can suggest actions to be taken by the organisation.
Another internal stakeholder are managers. They are accountable for a issuing tasks to the employees and other members of staff, and they ensure everything runs smoothly. They are Tesco’s key to success as they can make big decisions such as offering discounts to the customers or decide who to employ for the available decisions. All these decisions can greatly impact the success of the business so managers are key stakeholders. If there were no managers, Tesco would not have the capacity to achieve their general aims and objectives, as they are the ones who assign the tasks to the employees to run the business daily.
Communication with stakeholders
Tesco uses various techniques to communicate with their stakeholders. Communication is important as you can find out certain problems that are occurring and there are many ways to communicate such as:
Face to face (Interviews)
Video conferencing
Focus Groups
Emails
Posters
Advertisements
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L&Q aims to build homes that provide the needs for their tenants – the people who have interest in buying or renting the homes. They aim to make their homes have a family touch and want to create a good neighbourhood for people to live in and to make them happy. Their main objective is to make sure their tenants are happy and that there are no problems so they do not go to their competitors.
L&Q is a charitable organisation which is claimed by a gathering of individuals called Trustees: these are individuals or an association named in a trust agreement by the court and their occupation is to ensure the business is effectively working. In terms of liability, L&Q has unlimited liability which means that the trustees have full responsibility for all the debts of the housing association. It is guaranteed that the loss of each trustee is a specific amount of money which is sorted out when a person becomes a trustee.
L&Q purpose is stated in their slogan: ‘creating places where people want to live’. They want to build high standard homes, that would meet their customers’ needs and wants, in their current income. They also want to give their full potential to find the best homes for everyone in the greatest degree of sustainable way. They want to create places where people would want to live; they take into mind the long term benefits for individuals. They are also a not-for-profit business which means they do not run the business to seek profit; they want to provide quality homes for the general public to fulfil their potential dream home. As they are a charitable organisation, they want to provide for individual people. They want to put all the income in support for the charitable objective. As they put their customers in their heart, they want the public as a biggest advocate; they try to decrease as much of the impact on the environment.
Organisational Structure and Functional Areas
L&Q has a flat structure. It also have a wide span of control as the Chief Executive Officer (CEO) is directly linked to everyone and this can be a
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good thing because the departments and workers can go to the CEO if there are any problems however it could be a bad thing because there would be too many people going to the CEO, they might not have time for everyone and finally it also has a small chain of command. Rather than a tall association, a flat association will have moderately few layers or only one layer of administration. This implies the "Chain of Command" start to finish is short and the "span of control is wide". Span of control alludes to the number of employees that every director oversees. On the off chance that an administrator has lots of employees answering to them, their range of control is said to be wide. A manager with a little number of direct reports has a thin span of control. Because of the little number of administration layers, flat associations are frequently small businesses. Advantages include good communication between management and as there are fewer employees, it is also cost efficient. Disadvantages may include that employees having more than one manager may cause confusion when giving orders. For example, GI Barbers has the flat structure as the manager only controls two people.
This business has eight functional areas which help the business to function and they are:
Information systems – they make sure that they give knowledge about the information that is happening
Human Resources – they specialise in recruiting and interviewing workers. They also manage and direct the company
Finance – they organise the money an organisation has and can give loans.
Strategy marketing and sales – they make sure that they are using the most suitable method for their marketing and saes
Resident services – they supervise in looking after the residents
North reign
South reign
Development – they develop the business
Stakeholders
Some of the stakeholders for London and quadrant are;
Tenants/Residents
Trade Union
Unit 1: Exploring Business
Module: Understanding Business (BUSI1649)
University: University of Greenwich
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