unit 1 exploring business assignment 1 betec and talks about two organisation Tesco and RSPCA . This assignment got distinction and covers every criteria to achieve the grade distinction.
For my report, I will be researching and will be breaking down the features of two contrasting
businesses. I have chosen one not-for-profit organization which means they are there to not make
profit for the owners but to raise awareness or to raise money for a cause and usually is runned by
lots of volunteers. On another hand, I have chosen one public limited business which one of their
motifs is to make profits in which case I have choose these two contrasting business RSPCA (Royal
Society for the Prevention of Cruelty to Animals) a not-for-profit organization and Tesco a public
limited business. Firstly, I will be discussing and comparing both businesses feature which included
ownerships, liability, purpose, sector, scope of activities and size. Next, I will explain how the two
contrasting businesses are influenced by stakeholders and discuss the characteristics of the two
business. furthermore, I am gone write specifically how their structure is managed which enables
them to achieve their aims and objectives. Moving ahead through my report I will be analysing their
relationship and communication with the stakeholders and lastly come to a conclusion on how and
why the contrasting businesses were successful.
P1 explain the features of two contrasting business
Tesco introduction
The supermarket Tesco is a British retailer, which was founded 102 years ago in 1919 by jack Cohen
who made a profit a profit of £1 from the sales of £4 on his first day and that’s where the brand
started. The company is currently the 4 th largest food retailers in the United Kingdom with 1938
small convenience stores (one stop) and 795 large stores around the country. Tesco is not only
national but it is also an international company as it operates in 11 countries across Europe, Asia and
north America and it headquarter is currently located in Welwyn Garden city. Tesco currently sells
range of products which includes food and beverages, clothing, home appliances and also offers
financial services such as car insurances and loans.
Ownerships
There are 4 types of privately owned organisation’s: a sole trader which is the smallest type of
business and usually is runned as an individual, a partnership which is runned by two or more
people, a private limited company (LTD) where the owners owns the share and finally a public
limited company( plc) which is the largest type of business and the shares could brought of a
company if you are over 18 for example an adult who is 18 or over have to go online or go to market
exchange to buy the shares. The multinational grocery and general merchandise retailers Tesco is a
public limited company which tells me that it is owned by shareholders and runned by directors. The
current chainman is john Allan and the CEO is ken murphy. A reason for a Tesco being a private
limited company could be due to being a such as huge company ad having such a big expansion
around the world it would eventually be tough to raise funds for Tesco if it was owned by a sole
trader but however the company is currently is owned by shareholders who proved the funds for the
company. Shareholders are the people who invests their money to buy a percentage of shares from
the company and becomes the shareholders. Furthermore shareholders create their money
according to marketing the share back to company fronting a higher price than they brought it off
and procuring profits and then the business brings in its cash from the shareholders who puts their
cash “in the first place”.
,Advantages and disadvantages of a public limited company
Advantages
It would be easier for Tesco to raise funds and run successfully as it a very big company and
have global expansion which will promote the branding
Tesco and shareholders have limited liability which will not make Tesco or shareholders
bankrupt because they will only lose the money they have invested and will not be forced to
sell their personal possessions so overall it is very secure.
There are more growth and expansion opportunities such as opening more international
supermarkets in different countries or launching new products and services.
There is no limit of how many shareholders you can have
Improves branding and creates a huge reputation in public which could bring increase in
sales and more shareholders investing in the company.
Disadvantages
Anyone buying shares more than 51% of all the Tesco shares would be the new owner of the
company which could bring in major changes in the company.
Requires minimum of 2 directors
Before making decisions about the company, it has to be discussed and made in front of the
companies’ directors and major shareholders
The stakeholders who are investing their money wants regular accounting updates which
could be time consuming
Public limited company could be difficult to control due to being a big company
Shareholders will be expected to receive a percentage of profits as a dividends
Liability
As the company Tesco is a public limited company it has limited liability. The phrase limited liability
means if Tesco company fails the owners or the shareholders are not responsible for any debts and
only lose money that they invested in the company whereas if it was unlimited liability and the
company went bankrupt the owners and the partners will both lose the money they have invested
and so to recover the debts they might have to lose their personal assets such a personal money or
any building they own. Tesco is also a part of the private sector so therefore their main objective is
to make profit. This means the government has no control over the running of the business, unlike
the public sector of the economy, which is stately owned and controlled by the government.
Advantages and disadvantages of limited liability
Advantages
The shareholders and the owners of Tesco have limited liability meaning their personal
assets are protected
It gives Tesco more creditability meaning a sense of confidence to the investors
Shares are easily created and transferred
You can easily transfer the ownership
Disadvantages
a problem of a limited liability is that you have to take shareholders opinions and views in
considerations and if the shares ae bigger it means less ownership you have
, there is very less privacy because someone can easily access information about the
company, directors, shareholders and accounts
there is lot of legal formalities required to set up one up which could be costly and time
consuming
purpose
tesco is one of the largest supermarkets in the United Kingdom and sells a range of products such as
groceries, their own brand clothes (cheroke), their own brand electronic (technika), furniture and
other products but they also provide services such as home delivery, freshly handmade Tesco’s
bread in store. The business also offers financial services such as their own store cards and credit
cards, 8 types of insurance covers, provides personal loans, mortgages and finally provides foreign
currency exchange services. Tesco’s main purpose is to create value for customers and to earn their
lifestyle loyalty. Tesco has clearly written on their website what their main purpose is they have
stated that “our business was built with a simple mission – to be the champion for customers,
helping them to enjoy a better quality of life and an easier way of living. This hasn't changed.
Customers want great products at great value which they can buy easily and it's our job to deliver
this in the right way for them. That’s why 'Serving shoppers a little better every day' is our core
purpose. As a business, serving customers is at the heart of everything we do – from colleagues in
our stores to those of us in supporting roles. In the UK, we serve some 66 shoppers every second, so
it's our goal to ensure every one of those customers experiences just a little better service on each
visit”. Tesco’s has the slogan “every little helps” which highlights one of their purposes that every
little things can make a huge impact and Tesco is doing that by providing high quality products and
by friendly service.
sector
withing the economy business are classified into different sectors: primary sector which sources the
raw materials e.g. a farmer milks the cow, secondary sector which processes the raw materials
produced by the primary sector so they can be sold on e.g. canning the vegetables, the tertiary
sector which is the largest sector in the uk economy it provides with supporting services with store
and distributes the goods e.g. travel agents who sells the holidays and lastly the quaternary sector
which provides industries information e.g. telephone network. The tertiary and the quaternary
sector make up the 80% of uk employment. Tesco is in the tertiary sector because they provide
goods and services to the public and they buy their products from the primary and secondary
sectors. But however, Tesco can also come under as a secondary sector as they make and sell their
products such as their brand of electronics (tecknika).
Advantages and disadvantages of tertiary sector
Advantages
it saves lots of money, material and energy consumption
faster economic development
disadvantages
more experiences employees and workers are required
could take time for the products to arrive if its coming from the other countries
scope of activities
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