BTEC Business Level 3 - Unit 1 Exploring Business Assignment 1. Distinction* Assignment on ASDA and Water AId. "Features contributing to the success of contrasting businesses". P1: Explain the features of two contrasting businesses. P2: Explain how two contrasting businesses are influenced by stake...
In this unit, I am going to be comparing two contrasting businesses, which are Water Aid and
ASDA, one is a business, and the other is a charity. ASDA is a retailer founded in 1949. Whereas
Water Aid is a not-for-profit organisation: this means that they do not take any profits from the
surplus money they gain, as they are a charity, Water Aid was founded in 1981.
The history of ASDA and Water Aid
Asda Stores Limited was founded as Associated Dairies & Farm Stores Limited in 1949 in Leeds
by Noel Stockdale. The adoption of the Asda name occurred in 1965 with the merger of the
Asquith chain of three supermarkets and Associated Dairies; Asda is an abbreviation of Asquith
and Dairies, often capitalised. In 1981 they had opened their 100 th ASDA store, Peter Firmston-
Williams left the business and John Fletcher became Asda’s new Managing Director. Following
the next couple of years, Asda also launched the grocery home shopping business, later to be
followed by the launch of the non-food online business. 1
Water Aid was inspired by David Kinnersley and started in 1981 because no charity like them
existed.2 The Thirsty Third World Conference brought members of the UK water industry
together. They decided to unite, to reach the millions of people living without clean water,
decent toilets, and good hygiene. In 1981 their first projects had started in Zambia and Sri
Lanka. In 1993 they began work on their 1000 th project. By 2009 they ad reach 13.4 million
people with clean water and 8.1 million with decent toilets. Water Aid continued to grow even
further and by 2019 they had reached 27 million people with clean water, another 27 million
people with decent toilets and 20 million people with good hygiene. 3
Ownership and liability of ASDA and Water Aid
ASDA
ASDA’s ownership is an LTD (Private limited company) which means that ASDA is a limited
liability company.4. Being a limited liability company means that if ASDA undergoes financial
distress, the personal assets of the directors will not be used to pay the debts of the company.
However, because ASDA is a private limited company it means that they cannot sell shares on
1
https://corporate.asda.com/our-story/our-history
2
https://www.independent.co.uk/news/obituaries/david-kinnersley-753823.html
3
https://www.wateraid.org/uk/our-history#:~:text=The%20Thirsty%20Third%20World%20Conference,decent%20toilets%20and%20good
%20hygiene.&text=WaterAid%20is%20officially%20established%20on,in%20Zambia%20and%20Sri%20Lanka.
4
https://www.locusassignments.com/solution/unit-1-ASDA-plc-business-environment-merit-copy#:~:text=ASDA%20PLC%20as%20the
%20name,the%20CEO%20of%20the%20company.
1|Page
,the stock market. Although, they can sell shares of their business to private investors. If they
could sell shares on the market, then they could have gained substantial amounts to invest in
their business.
Water Aid
Water is a not-for-profit organisation and has limited liability. 5 An advantage to Water Aid being
a charity is that they are not taxed in most cases, meaning that if the money they have made is
going to be used for charitable purposes, then Water Aid can claim back the tax that has been
deducted. Furthermore, because Water Aid is a not-for-profit organisation, they become tax-
exempt; this means that they have restrictions on their lobbying and their political activities.
This could affect Water Aid's ability to uphold their causes. However, being a not-for-profit
organisation means that it is not owned by its founders, a not-for-profit organisation belongs to
the public. If it dissolves, its assets must be given to another not-for-profit organisation with a
similar purpose.6
The purpose of ASDA and Water Aid
The purpose of ASDA is to supply affordable goods and services to customers and to make large
profits, which they can use to expand the business. ASDA does this by selling high-quality, low-
priced goods, and services. Whereas Water Aid’s purpose is not to make a profit but to provide
clean water, decent toilets, and hygiene knowledge to people who do not yet have access to
them.
ASDA and Water Aid’s business sector
ASDA
ASDA’s business sectors are the tertiary sector and the secondary sector. ASDA is within the
tertiary sector because they purchase products from businesses within the secondary sector
and then sell them to customers. ASDA is also part of the secondary sector as they have
factories where they produce their clothing brand named George, and then sell them within
their store.7 This expands the product range, which makes ASDA involved in more than one
sector.
Water Aid's business sector is often referred to as the third sector (Voluntary sector); this is
because an organisation like Water Aid creates social wealth rather than material wealth. 8 This
is because Water Aid encourages the act of giving to the people that need it. Donating is a
caring act, which Water Aid relies on because if there were no people that were interested in
giving then Water Aid would not be able to be successful, as they would have no source of
income.
The scope and size of ASDA and Water Aid
ASDA
ASDA has 339 stores in the UK and has more than 165,000 employees serving more than 18
million customers that shop in their stores every week, this means that ASDA is a large
business.9 ASDA only sells in the UK under the ASDA brand name; however, Walmart bought
them in 1999, which made them a part of an international retailer. It was only until 2020 that
Walmart sold ASDA. This means that ASDA only sells in the UK. ASDA is continuously growing
and expanding, for example, ASDA’s grocery click and collect option was launched in 2011. This
has grown to more than 15 million orders a year. This led to ASDA increasing their revenue and
lowering their costs because this was done through e-commerce and not in store, which means
an employee, was not needed. Therefore, this decreased costs, which lead to ASDA making
more profit.
Water Aid
Water Aid has its central office premises in London, but they do most of its charitable work in
28 other countries such as Ethiopia, Uganda, Bangladesh, and Nepal to just name a few. 10
Water Aid has 178 employees; this means that Water Aid is a medium-sized business excluding
the volunteers. The reason Water Aid has a small number of employees is that most of the
people that work for Water Aid are volunteers. This means that they are not paid for the work
that they do, however, Water Aid does have to pay for their travelling fees and accommodation
for their volunteers.
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