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DISTINCTION Unit 1 - Assignment 1 - Exploring Business
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- Unit 1 - Exploring Business
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Features contributing to success of contrasting businesses Amazon
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FEATURES CONTRIBUTING TO THESUCCESS OF CONTRASTING
BUSINESSES
UNIT 1 ASSIGNMENT 1
Sukhdev Rehinsi
Isaac Newton Academy
, Sukhdev Rehinsi Unit 1 Assignment 1 Exploring Business
Contents
Introduction: ................................................................................................................................... 2
Explain features of two contrasting businesses ............................................................................. 2
Stakeholders influence on two contrasting businesses: ................................................................ 3
Stakeholders influence on Amazon: ............................................................................................... 3
Stakeholders influence on Redbridge food bank: .......................................................................... 4
The relationship and communication with stakeholders: .............................................................. 5
Structure and organization of two contrasting business:............................................................... 8
Amazon organizational structure: ................................................................................................ 11
Redbridge food bank organizational structure: ............................................................................ 12
How organization structures help meet business’ objectives: ..................................................... 13
How does Amazon meet their long term aims and objectives? ................................................... 13
How does Redbridge food bank meet their long term aims and objectives? .............................. 14
Business’ reasons for success: ...................................................................................................... 16
References: ................................................................................................................................... 18
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, Sukhdev Rehinsi Unit 1 Assignment 1 Exploring Business
Introduction:
During this report, I will be exploring the features of two contrasting businesses and analyzing
what makes them successful. Firstly, I will simply explain the features of the two businesses and
then show how the contrasting businesses are influenced by their shareholders, both external
and internal. I will also explore the organization structures and aims and objectives of both
businesses. Finally, this will allow me to evaluate the reasons for the success of the two
contrasting businesses, by reflecting on all of my evidence gathered.
Explain features of two contrasting businesses
The first business I will explain is Amazon. Amazon is the world's largest online retailer and
prominent cloud services provider. They sell a wide variety of consumer goods and digital
media as well as their very own electrical device, known as the kindle. Amazon’s ownership is
private as they are a public limited company. The advantages to this type of ownership are that
they have a better access to capital – i.e., raising the share capital from new investors. This
ownership will also give the company a more prestigious profile and there is an opportunity to
more easily make acquisitions – e.g., by offering shares to the shareholders of the target firm.
However, there are some disadvantages too such as once they are listed on a stock exchange,
the company is likely to have a much larger number of external shareholders, to whom
company directors will be accountable. Also, financial markets will govern the value of the
company through the trading of the company's shares and will represent the market's view of
the company's performance over time. This can lead greater public scrutiny of the company's
financial performance and action. Amazon have limited liability to reduce the legal liability of
the company’s owners in the event of a lawsuit. The purpose of the business is to aim to be
earth’s most customer centric company and they want the use of internet and technology to
help consumers find, discover and buy anything – all from Amazon. They belong to the tertiary
sector, as they already produced goods and services. Amazon are an international business as
they ship products to their customers world. Finally, they are a large organization as from July
2020 they had 1,000,000 employees.
The contrasting business that I have chosen is Redbridge food bank. They collect donated food
from the community and pack parcels of food and give to the people in need at the Redbridge
food bank. The ownership of this business is a not for profit as they are doing voluntary work.
The advantages of this ownership are that they will have a tax-exempt status and simply that
they are doing a good deed for the local borough. This will lead to other boroughs being
motivated to help – which in the long run, will lead to less people being in need. However,
there are some disadvantages too, for example if there is a lack of funds or donations at any
point, they won’t be able to provide food packages to those in need. Also, there will be a low
pay to the workers, as it is mainly a voluntary scheme and not a job. However, they will have
limited liability which means that they won't be personally held liable unless they have
committed fraud or serious harm to someone. The purpose of this business is to provide a
short-term emergency plan supply of food to an individual or family in need or a crisis while a
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, Sukhdev Rehinsi Unit 1 Assignment 1 Exploring Business
long-term strategy can be put into place. They belong to the tertiary sector because they are
passing on the finished goods such as tinned foods, or pasta which are ready to be consumed.
They function locally as the food is donated from within the local community and is passed on
to those in need in Redbridge. Redbridge food bank is quite the opposite to Amazon as they are
a very small business with around 50 employees compared to Amazon’s 1,000,000.
Stakeholders influence on two contrasting businesses:
Stakeholders are a person or a group of people with an interest in a business. Internal
stakeholders are the employees and owners of the business. However, the external
stakeholders are the suppliers, customers, debtors, creditors and community etc. Stakeholders
are important to a business as they can provide their expertise in an attempt to help the
business thrive. Also, they increase the chances of the businesses success as whether they are
internal or external, they will have a big influence on the business which will ultimately lead to
either the success or failure of a business. Businesses must consider the opinion of stakeholders
because without any stakeholders, the business wouldn’t be able to succeed, therefore they
should consider the stakeholders opinions when making decisions to try and keep them all
happy. For example, if customers would like a certain product to be re-released, the business
should try and make this happen, as the customers will feel involved and happy with the
business and also the business is more likely to succeed.
Stakeholders influence on Amazon:
Shareholders:
Amazon’s shareholders have a massive influence on Amazon, for example Jeff Bezos is the
majority shareholder therefore he has the biggest say when making decisions. All Amazon
shareholders determine the decision making that the company need to make. As they are the
most important, they basically control the business and therefore have the biggest influence.
For example, the shareholders can sack directors or managers and if they are unhappy, they can
sell their share of the business to someone else. So, amazon’s shareholders have a massive
influence on the company, as they make the biggest decisions and can sack any staff below
them.
Customers:
Amazon have millions of customers which suggests how big of an influence that they have on
the success of the business, as without them they wouldn’t be making a profit. The customers
will always want the best value for their money but also top-quality products. All of Amazons
profits come from their customers buying their products, therefore the customers also have a
very large influence on Amazon. This is also due to Amazon providing their customers with
great customer service, for example Amazon prime. So, the customers buy more products
which provides a greater influence on the business.
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, Sukhdev Rehinsi Unit 1 Assignment 1 Exploring Business
Employees:
Amazon have over 1,000,000 employees which shows how great the influence they have on the
business. They influence a lot of things which make the business run from day to day, for
example they determine how many products that they pack and ship to their customers. If the
employees weren't hard working, Amazon wouldn’t run nowhere as well as they run today. This
is due to the massive influence the employees have on the business, as without them Amazon
wouldn’t be very successful.
Suppliers:
Amazon’s suppliers also have a big influence on the business as without their suppliers, Amazon
wouldn’t be able to sell any of their products. They also determine how much of certain
supplies Amazon get which gives them a greater influence on the success of the business.
However, a lot of Amazon’s suppliers are slowly losing negotiation power which gives Amazon
more leverage to get more products for a cheaper price which makes Amazon make more
profit. Therefore, the suppliers have a big influence on the company as without them Amazon
wouldn’t have any products to sell but also determine how much profit Amazon make from
selling their supplies.
Local Community:
Although Amazon are an international business, the local communities have a little influence on
Amazon as well. This is mainly due to Amazons community fulfillment themselves as they are
fully committed to giving back to the communities where their employees live and work. This
influences Amazon as they give back by offering jobs or sales on products which in the long
term will help Amazon a lot.
Stakeholders influence on Redbridge food bank:
Shareholders:
As redbridge food bank is a not for profit, they have no shareholders, however they have
founders of their business. They play the same role that shareholders would. Therefore, they
have the biggest influence on the business as they will have the decision of how much food is
donated. For example, they made the decision to donate three days' worth of food to each
person and nobody else would make this decision.
Customers:
In this case the customers are the people in need at the foodbank. These ‘customers’ have a
massive impact on the business, as without them there will be nobody for the food to go to and
will eventually go to waste. Therefore, the customers have a massive influence on the business
as without them there will be no purpose of the business.
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, Sukhdev Rehinsi Unit 1 Assignment 1 Exploring Business
Employees:
As they only have around 40 employees, this makes the influence of these employees even
bigger. This is because they are doing a lot of the work such as packing the food into parcels
and handing out. Without them, the food bank wouldn’t run as nobody would be doing the
main work which is packing the food and handing it out. They have a massive influence as they
determine how many packages get packed and if not, a lot get packed, the business wouldn’t
be successful.
Suppliers:
The suppliers of Redbridge food bank also have a huge influence as if they are low on
donations, they will turn to suppliers for cheap food in bulk packages. Without these suppliers,
the people in desperate need won’t be getting anything to eat, therefore the suppliers have a
massive influence on how the foodbank runs. This is due to the food being the main product of
the business and without it the business has no purpose.
Local community:
They have a large influence on Redbridge food bank as it’s a voluntary business and the local
community are the ones who donate the food to the business which allows them to give food
to the people in need. Therefore, they have a big influence on the business as without their
donations, the business wouldn't be as successful as they would have to pay for supplies and
may see the business go into debt as it is only a voluntary business. Also, without them there
wouldn’t be a lot of goods for the food bank and it will give a bad representation of the local
community.
The relationship and communication with stakeholders:
What is communication?
Communication is the sharing of information. For it to be effective, it must be to the right
people, at the right time and in a format that is understandable. However, the barriers to
communication could be information overload, jargon and the use of inappropriate method.
Businesses communicate with their stakeholders all the time and now I will discuss the
communication methods that each of my chosen businesses use.
Amazon stakeholder communication:
Amazon’s communication with their shareholders is through annual newsletters. They
communicate via annual newsletters from the main shareholder: Jeff Bezos to the other
shareholders, giving his aims and objectives on what he wants the business to achieve etc. For
example, due to the coronavirus outbreak this year, he released his annual newsletter earlier to
address the company’s efforts to the crisis. He outlined the company's plans to build a lab to
test employees and the social distancing measures it implemented in its facilities among other
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, Sukhdev Rehinsi Unit 1 Assignment 1 Exploring Business
initiatives. Other than the coronavirus pandemic, Bezos also discussed the retail giant's efforts
to combat climate change and its impact on job creation. Therefore, this is how the
shareholders would communicate and find out any information about the business and this is
important as the shareholders are the most important people of a business so they would need
good communication for the business to be running smoothly. However, this type of
communication can be improved by having annual face to face meetings rather than through a
newsletter which makes it more convenient and easier for everybody to communicate. For
example, if somebody was unclear about something, they could ask instead of having to directly
contact the busy shareholders through email.
Amazon also have to communicate with their suppliers, and this is especially important as bad
communication with their suppliers could lead to the business not having certain products to be
sold. They communicate to the supplier's procurement team either through meetings or emails.
If amazon wanted to place an order, they would organize a meeting with their supplier via an
email, in order for them to discuss what they want to purchase and to negotiate a price. For
example, if they wanted to negotiate a price for a product, the procurement team would be
negotiating with amazon while also communicating with their project management team
regarding the prices. So, thi is how amazon would communicate with their suppliers and it is
important to have that good communication and relationship with them in order to be getting
the best possible deals and ensuring they get the goods they need for their business. However,
this type of communication can be improved by having a presentation along with them, in case
the supplier wants to revisit any information.
Amazon also must communicate with their employees, so they know any information that they
need to know such as shift changes or pay changes. Some methods of communication are face
to face meetings or emails. For example, if an employee is getting a pay rise, they would most
likely be held in a meeting with a manager as it is an important thing. However, if it was
something less important like a shift change, they would be emailed or messaged via SMS. It is
vital for the significant information to be held face to face with the employee as it allows for
two-way communication and clarification and can also reach a larger audience at one time
while doing this. It is important to communicate well with the employees as it will ensure they
know their roles and motivate them.
Finally, another stakeholder group that amazon must communicate with is their customers.
Such information may have to be communicated like if there is an issue with a delivery or new
sales. The method of communication they would use is through digital media for example
advertisement or email their regular customers. Also, in some rare circumstances they may
even use letters and leaflets to their customers door, for them to be aware of any upcoming
sales or important information. They need to have good communication with their customers
because else they will have fewer sales, and nobody will know about any important information
about amazon for example if there is a huge sale coming up. This also builds a positive
relationship between the business and their customers, which will benefit amazon as they will
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