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Business Assignment 1

James Moriarty

Feature contributing to the success of contrasting businesses Tesco PLC – Explore the features of two contrasting businesses (P1): [ CITATION Wik18 \l 2057 ]

Tesco was founded in 1919 by Jack Cohan. He was an English grocer, and sold his products on market stalls. The first Tesco shop opened in 1931, with his business expanding rapidly, and by 1939, there were over 100 Tesco shops across the country. Nowadays, people can buy shares online for Tesco’s, and therefore have a small part of ownership. This is because it is a Public Limited Company (PLC), and they have shares that they buy and then sell on the stock exchange. Tesco provides a service to customers, and is therefore in the Tertiary sector. Tesco has limited liability, which means that if the business fails or goes bust, the owner’s will not have to pay it back. The purpose of Tesco is to make as much profit as possible, as they are competing with other supermarkets, and ideally would like to remain the number one supermarket in the UK. They achieve this by selling a variety of good quality products at a fair price. They have many different departments within Tesco, such as Tesco Mobile, F&F Clothing, butchers, bakery, fishmongers, deli counter, as well as a wide range of groceries. This attracts more customers of different target populations, to purchase a range of different products. Tesco has a large size, with 476,000 employees, in the UK alone. Tesco is also international, with hundreds of stores in countries such as Ireland, Thailand, Hungary, Czech Republic, Malaysia, Poland and Slovakia. Tesco also owns operations in France, US, Japan, South Korea and Turkey.

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Business Assignment 1

James Moriarty

British Heart Foundation – Explain the features of two contrasting businesses (P1): [ CITATION WikipediaBHF18 \l 2057 ]

The British Heart Foundation was founded in 1961 by a group of medical professionals, who were concerned about the increasing death rate from cardiovascular disease. They wanted to fund extra research into the causes, diagnosis, treatment, and prevention of heart and circulatory diseases. Due to this business being a non-for-profit business, within the charity sector, they have unlimited liability, which means that if the business goes bust, the company will have to pay all of the debts. These types of businesses rely on donations from supporters of the charity, and all the profit they make will go towards research. Their aim is to research as much as possible, in order to help people recover with heart-related conditions. To do this research they need to reach out to supporters. They do this via social media and local fundraisers in order to raise awareness. They also have many charities shops in many towns and cities across the UK, which brings in the profits for research very rapidly. There are over 950 BHF Healthcare Professionals caring for patients across the UK. BHF shops are predominantly staffed by roughly 22,500 volunteers and each shop also has a paid staff made up of a shop manager, assistant manager and they may also have a shop assistant.

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Business Assignment 1

James Moriarty

How is Tesco influenced by stakeholders? (P2) [ CITATION Lit18 \l 2057 ] Internal stakeholders: - Employees An employee is any individual hired by an employer to undertake a specific job, for a wage. Employees are of the same importance as any other stakeholder because they have the first contact with the customers, so if the customers want to enquire about the organisation or about a product, the employees can assist them with that and give an explanation of what it is, which could bring in more money for the business. If the employees at Tesco are welcoming and give a good impression to the customers, then the customers will be more likely to return to the store and have a positive view on it.

- Stockholders A stockholder is any individual who is a holder of supplies for manufacturers. Stockholders can act upon a concern in many ways. Stockholders have direct influence on a concern as they have voting rights on major corporate determinations.

External stakeholders: - Customers Customers contribute to net income and turnover through purchasing products and services. Customers do not want to pay extortionate prices for a product or a service, so if the price is cheaper in one business, than another, they will want to pay a cheaper price. For example, if a product is cheaper in Tesco than it is in Sainsbury’s, then the customer will more likely shop at Tesco.

- Suppliers Suppliers are people whose concern is to provide a particular service or good. Suppliers can decide whether to raise value of money for orders which can evidently impact Tesco’s net incomes. A supplier’s dependability is required for production. If the orders aren’t carried through, customers may not get their goods. Suppliers can alter the prices of products, and can decide whether or not to allow discount for bulk loads or loyal customers. Suppliers are just as important as any other stakeholders because they are giving the stores their goods, so they can further sell it on, and make a net profit.

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Business Assignment 1

James Moriarty

How is British Heart Foundation influenced by stakeholders? (P2) [ CITATION Stu18 \l 2057 ]

- Board of Trustees The board of trustees is typically the governing body of an organization and seeks to ensure the best interest of stakeholders in all types of management decisions. The board of trustees are responsible and are appointed as senior manager. They are liable for financial responsibility and other consequences of the British Heart Foundation. Their trustees are: Dr Doug Gurr, Andrew Balfour LLB, Professor Dame Anna F Dominiczak OBE MD FRCP FRSE BMedSci, Dr. Robert Easton BSc ARCS DPhil, Rt Hon Lord Feldman of Elstree, Daryl Fielding BSc, Professor John P Iredale, Professor David Lomas, Iain Mackay, Professor Sussan Nourshargh PhD FBPhS FSB BMedSci, Peter Phippen, Professor Liam Smeeth and Professor Sir Kent Woods. - Corporate Partners Partnership between a fundraising organisation and a commercial entity, where the commercial entity provides money, skills or other resources to the fundraising organisation. Within British Heart Foundation there are many big for-profit business that aim to support BHF in the fundraising and research that they do. An example of this is that Tesco and British Heart Foundation work together in order to prevent Type 2 diabetes and Cardiovascular disease.

- Customers The customers want the business to produce quality products at a reasonable price. BHF has many types of customers; loyal, young, old, families or one-time customers. They would be influenced by BHF as they like to donate money towards a particular cause, which in this case is British Heart Foundation. They would buy products from their charity shops or just donate.

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Business Assignment 1

James Moriarty

Organisation structures, aims and objectives of Tesco PLC (P3) [CITATION Myl \l 2057 ] [ CITATION Org18 \l 2057 ] Aims of Tesco:   

To make profit To provide a good quality product at a reasonable price Stay leading supermarket in the UK

Objectives of Tesco:   



Sell more products than its competitors To maximise sales, whilst making profits Attract more customers by lowering prices and offering more deals through loyalty cards Have more healthy food within the store to attract more customers. Have a range from organic meats to healthy living ready meals

Reasons for success:    

Reputation for good value of customers, club card giving rewards Low prices for high quality products Large range of products in store and on the website More stores – ownership of one stop

Tesco follows a hierarchical organisational structure, as shown above. In this structure, positions and obligation are divided into many parts to ensure work will be done efficiently and smoothly. The ones at the top of the business pyramid have the maximum responsibilities and authority. This is an

example of a flat structure, meaning there isn’t that many layers of authority. Above is an organizational structure chart example at store level. It’s often questioned that four layers of management within a store can generate annoying bureaucracy with a bad effect on coordination and collaboration among managers. So it’s suggested that reducing layers of 5|Page

Business Assignment 1

James Moriarty

management must be done as soon as possible to create more flexibility and faster flow of information. It is also an example as a tall structure, as meaning they have lots of bureaucracy, when they have many detailed procedures that have to be followed.

Organisational structures, aims and objectives of British Heart Foundation (P3) [ CITATION Bri18 \l 2057 ][ CITATION UKE18 \l 2057 ] Aims of BHF:

   

Reduce the number of deaths from cardiovascular disease in the under 75s by at least half Ensure that at least two thirds of people under 75 survive a heart attack Reduce the level of heart-related deaths in all UK local authority areas to the current level in South East England or below Reverse the increase in childhood obesity

Objectives of BHF:

    

To pioneer research into the causes of heart disease and improved methods of prevention, diagnosis and treatment To provide vital information to help people reduce their heart health risk To press for government policies that minimise the risk of heart and circulatory disease To help attain the highest possible standards of care and support for heart patients To reduce the inequalities in levels of heart disease across the UK

Reasons for success:   

Researching and finding new drugs to help people with heart problems with money raised through the charity A lot of volunteers take help out and raise money through fundraising or working in the charity shop, which helps raise money efficiently without having to make a profit Offers support to the victims of heart illnesses/diseases

It has a hierarchical structure, with the board of trustee’s overseeing the charity, and arranging and directing people in order to raise money. As we go down the chart, the hierarchy decreases, with less direction and authority. It is also an example of a tall structure, which means that there is lots of bureaucracy, meaning that detailed procedures have to be followed.

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Business Assignment 1

James Moriarty

What is the relationship and communication between the stakeholders of Tesco PLC like? (M1): In Tesco PLC, two stakeholder groups that communicate with each other are the Board of Directors and the shareholders. The Board of Directors have strategic oversight of the business, and will approve any dividend payment made to the shareholders. Although there may not be any direct communication between the Directors and the shareholders, their decisions will be communicated via a formal letter or statement. This might ask whether the shareholders would like their dividends paid in cash, or whether they would like to purchase more shares. This method of communication is very formal because there are many shareholders and each will require accurate and precise information. Less formal forms of communication risk important information being lost or misunderstood. Another way the Board of Directors and shareholders might communicate is at the Annual General Meeting. This is where shareholders have the chance to vote on important strategic issues. Shareholders are formally invited to these meetings by letter and this method of communication is very effective because the shareholders have a clear idea on what the agenda for the meeting is and what they are able to vote on. Another two stakeholder groups that communicate with each other are the store managers and suppliers. The store managers the person ultimately responsible for the day-to-day operations of a retail store, and in this case Tesco PLC. All employees working in the store will report to the store manager. The suppliers provide products that are then sold in Tesco PLC, in return for a compensation. They would communicate via formal phone calls and emails in order to inform them of how many of what products that they need, for what date. This method of communication is very formal, and efficient, as if there is an urgent message that needs to be put across, it can be done quickly. This is formal because Tesco would still like to keep the relationship between the store manager and the supplier good, so they are able to get well-known quality stock. With the more local products, the relationship is less formal because they are not as worried about running out of their stock. Within Tesco PLC, another two groups of stakeholder groups that communicate are the customers and the shop floor staff. This communication is always verbal and face-to-face, in order to try and give the customer a positive experience within Tesco. The customer always hopes to have a positive experience with Tesco, and the shop-floor staff aim to provide this to them. This is an informal and friendly, so the customer feels comfortable, with the customer having a helping hand if they need it. This is extremely effective as the staff are able to portray Tesco PLC as helpful, with the customers having a brilliant experience shopping there.

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Business Assignment 1

James Moriarty

What is the relationship between stakeholders of the British Heart Foundation like? (M1): In British Heart Foundation a pair of stakeholders that would communicate are the volunteers and the donors (members of the public). The volunteers give up their time to help out, whether it be working in one of the BHF’s charity shops, or working at a fundraising event. The donors would often be fundraising, by doing a cake sale, a skydive or even a run. They would speak face-to-face, usually at fundraising events. It would be a very informal communication, and usually wouldn’t be carried on professionally. It is an effective way of communication as they are able to exchange questions the donor may have, and they will be given the recognition that they deserve. The final pair of stakeholders that would communicate is the volunteers and the customers. The volunteers give up their time to help out, and in this case it would be in charity shops across the country. The customers would be buying things that appeal to them from the shops. This, again, would be informal communication face-to-face. It would be friendly, with the volunteers willing to help the customers within the store. This is an effective form of communication as it enables the customers to have a helping hand within the store, as well as to know more information about what the charity does. The final pair of stakeholders that would communicate are the trustees and the government. The trustees are a board given control or powers of administration of property in trust with a legal obligation to administer it solely for the purposes specified. In this case they would be overseeing the British Heart Foundation. They are liable for financial responsibility and other consequences of the organisation. The government would provide money for the charity in order for them to research into heart diseases. These stakeholders would communicate through letters and emails. This would be formal, as the charity would want to get the message across to the government successfully, in the hope of them supporting them. This is effective as they are able to get all the content of what they need to convey in a simple letter or email.

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Business Assignment 1

James Moriarty

How does Tesco PLC’s organisational structure allow the business to achieve its aims and objectives? (M2)[ CITATION Org18 \l 2057 ] Tesco aim to stay the leading retail supermarket and provide good quality services and products at a low cost so that they are cheaper than their competitors. By doing this they have to follow objectives. Tesco PLC’s aims and objectives:

Aims o To make more profit o To provide a good quality product at a reasonable price o Stay leading supermarket in the UK

Objectives o To sell more products than its competitors o To maximise sales, whilst making profits o Attract more customers by lowering prices and offering more deals through loyalty cards o Introduce more healthy eating products

Based on my research on Tesco PLC, they have a hierarchical organisational structure, which means that the power within the business increases as you go up the chart. Positions and obligation are divided into many parts to ensure work will be done efficiently and smoothly. For example, the management of Tesco stores are able to contact local suppliers in order to provide a wider range of products which are sourced locally. This could potentially provide Tesco with a positive name, as they are supporting local businesses, which could mean that they maintain the title of ‘leading supermarket in the UK’. However, on store level, it is also an example as a tall structure, as meaning they have lots of bureaucracy, when they have many detailed procedures that have to be followed. This type of organisational structure allows the management to allocate different tasks to the varying levels of staff, which provides a stable and efficient working environment. This organisational structure will help to achieve Tesco PLC’s aims and objectives as if all the staff work together in order to achieve a common goal, such as give out more loyalty cards than the previous years. If they work together to provide a good service, and a welcoming atmosphere, then it is bound to make a profit due to attracting more customers, as the shop floor staff are essentially the ‘face’ of Tesco. Furthermore, Tesco customer service employees on the shop floor are at the bottom of the organisational hierarchical structure, however, to the customers they are the members of staff who have the potential to increase the sales for Tesco, which will eventually increase profitability. One of Tesco’s objectives is to ‘introduce more healthy living products. Its organisational structure enables Tesco to meet its objectives as the food trading manager (left) is able to focus on the selection marketing of the food products. This helps Tesco to make more profit as it may attract more customers. The increase in profit will lead to Tesco staying leading supermarket in the UK, which is one of their aims.

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Business Assignment 1

James Moriarty

How does the British Heart Foundation’s organisational structure allow the business to achieve its aims and objectives? (M2)[ CITATION Bri18 \l 2057 ] British Heart Foundation aim to reduce the number of deaths from cardiovascular disease in the under 75s by at least half and ensure that at least two thirds of people under 75 survive a heart attack. In order to do this they need to raise money from donors in order to pay for research into this. British Heart Foundation’s aims and objectives: Aims o Reduce the number of deaths from cardiovascular disease in the under 75s by at least half o Ensure that at least two thirds of people under 75 survive a heart attack o Reduce the level of heart-related deaths in all UK local authority areas to the current level in South East England or below

Objectives o To pioneer research into the causes of heart disease and improved methods of prevention, diagnosis and treatment o To provide vital information to help people reduce their heart health risk o To help attain the highest possible standards of care and support for heart patients

However, based on my research of the British Heart Foundat...