Unit 8 Assignment 1 Example work PDF

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Assignment 1 of Unit 8 BTEC Business Level 3. Example Distinction work...

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2018 Assignment 1:Succesful Businesses

Khalid, Fareeha

Assignment 1 : Successful Businesses Ownership Asda is a public limited company owned by an American multinational retail corporation called Walmart. The shareholders buy and sell shares in the company, so it could be said that the owners vary from time to time and there are thousands of them. Being a public company Asda are required to publish their financial position as potential shareholders need to know if the shares are worth investing in. Oxfam is a non-profit organisation therefore the organisation is dedicated for other purposes which are not about generating profit. Since Oxfam is a non-profit organisation the company does not have shareholders however they do have stakeholders which do not gain dividends from the business however they oversee the organisation of the business. The day-to-day operation of Oxfam is overseen by a corporate leadership team made up of the chief executive and seven divisional directors. The Chief Executive is responsible to the trustees for the management of Oxfam. The business can earn a profit however this then has to be re-invested back into the organisation.

Liability Asda is a PLC and the shareholders will have limited liability, meaning that the shareholders will have a separate legal identity to the owners of the business. If Asda was to go into debt shareholders would not be held personally responsible or experience financial losses of the whole business instead they lose no more than the sum they invested. Having limited liability could be the reason why Asda has thousands of shareholders due to gaining positive publicity because of trading on the Stock Exchange. Oxfam is a not for profit organisation therefore the company has limited liability. If the charity was to incur debt the assets of the charity would be seized by the charity’s creditors, so the private property of the trustee or board would not be seized. In some cases, trustees could lose their limited liability for example if they co-mingled non-profit funds and personal funds.

Purpose of Business ASDA's purpose is to make profit, once the profit is made the business has a choice whether to use the profit externally for example paying shareholders in dividends or retaining the profit in the business perhaps to re-invest it back into the business to use on the buying of

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extra stock or machinery. Retained profit is also a very important factor for a profitable business such as it is a cheap source of finance which requires no payment of interest.

Since Oxfam is a non-profit charity organisation their purpose is to raise money to help those in need. They would have more emphasis on generating profit for funding projects rather than paying employees this could be said as Oxfam’s main purpose which is found on the website is to ‘help create lasting solutions to the injustice of poverty.’ However Oxfam would still need to legally pay employees so they need to ensure they manage their budget to have enough money for funding and to pay employees.

Sectors Asda operates in the secondary and tertiary sector of business. Asda operates in the secondary sector as they manufacturer their own products such as food and clothes with Asda’s own brands such as George at Asda or Asda smart price. Asda also operates in the tertiary sector as they are responsible for the management of products which are on the final stage of the chain of production. Asda also provides services for customers such as Asda mobile or Asda cafes which are situated in some Asda stores. It could be argued that Oxfam operates in the secondary and tertiary sectors as the charity makes products to sell as merchandise is in their product range. For example Oxfam gifts available on the website such as notebooks, key rings, mugs etc. However, they also operate in the tertiary sector as their purpose is to help those in need which means they provide a service through projects and campaigns. And the shops they have on the high street means that they operate in the tertiary sector. Scope of Business Asda operates at a national scale with 631 retail units in total. 339 being Asda superstores, 206 Asda supermarkets, 33 Asda living, 32 Asda supercentres and 21 petrol fuelling stations of 2017. Each of these stores vary in size and what they have to offer. ‘Oxfam is an international confederation of 20 organizations working together with partners and local communities in more than 90 countries. Today, there are 20-member organizations of the Oxfam International confederation. They are based in: Australia, Belgium, Brazil, Canada, Denmark, France, Germany, Great Britain, Hong Kong, Ireland, India, Italy, Japan, Mexico, The Netherlands, New Zealand, Quebec, South Africa, Spain and the United States.’(See source table) Size of Business

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Asda is a large business as it has 165,000 employees. This large number of employees is very important as the business operates on a large scale everyday with thousands of customers’ every day at different times of the day. Therefore the business would need day time and night time staff to serve the thousands of customers who enter their doors every day. Oxfam is also a large scale business as it has 5,300 employees and 22,000 volunteers all doing a number of activities such as working in the Oxfam shops and taking part in the projects.

Influence of stakeholder activity A stakeholder is anyone who is interested in a business for example shareholders or employees. Internal Influence In a customer-based environment like Asda it is important to keep internal stakeholders such as employees happy as this will have a knock-on effect with the customer service given. There are many ways in which employees can be kept happy such as good working conditions and good pay, by providing employees with these basic factors they would be motivated to work. An incident occurred at Asda where owners were not paying the employees or giving them bargaining rights, leading many employees to go on strike this did have a knock-on effect for customers as many stores were closed and customers did not receive products on time. The result of this was that customers were switching to other supermarkets as they did not have the same problem elsewhere. http://news.bbc.co.uk/1/hi/business/5107156.stm.

For Oxfam it is key that the charity generates as much profit as possible, as this is what would help them achieve their aim and purpose. Volunteers have a big part to play in this as they represent the charity. Volunteers influence decisions based on the scale and type of project Oxfam would do. If the volunteers donate large sums of money large scale projects can be done however if lesser amounts are donated projects would be small too due to not having enough funding. Those who donate to charities may have personal preferences based on factors such as customer service in their stores. As charities do not provide a service which benefits its donors the same way perhaps a supermarket would so again it is important that the customer service is kept to a high standard to achieve the same knock on affect as mentioned. External Influence Suppliers are a crucial element to Asda’s decision making as the business relies on them for the main purpose of the business which is to sell products to customers. It is important that Asda picks good suppliers as is necessary that customers are able to receive their products

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on time and have a wide range of products. Some of Asda’s suppliers include big brand companies such as Kellogg’s and walkers. By maintaining a good relationship with suppliers this could then attract other potential suppliers as the company would have a good reputation to work with. In this article it was found that Asda were deducting money from invoices without notice. https://www.theguardian.com/business/2017/jun/26/asdasupermarket-suppliers-walmart-morrisons. This suggests that they don’t have a good relationship with suppliers therefore finding it hard to build relationships with new suppliers perhaps limiting their product range. Suppliers also influence Asda’s decisions as if they put their price up this would mean that Asda may have to increase prices for customers to gain a higher profit from sales. Competitors are another influential stakeholder which affect Asda’s decision making. The activities of competitors could determine Asda’s strategies and opportunities. Competitors include other lead supermarkets such as Sainsbury’s or Tesco these supermarkets would affect the pricing of Asda as customers would use price comparison websites such as ‘My supermarket’ to compare prices of everyday items in order to get the best deal. Therefore Asda would need to make sure that they have good prices so that they are ahead of their competition. A key external stake holder for Oxfam when making its decisions are donors. One of the reasons being is that they could affect the scale of the projects Oxfam decide to do. If the donors funded a lot of money Oxfam could perhaps do a project on an international scale such as helping crisis’ in different countries like Syria however if they donated small amounts of money they may stick to doing a national project instead such as their projects to help improve women’s access to work and wages. Another external stake holder that has influence on the decisions made by Oxfam are its beneficiaries. Beneficiaries are those that benefit from the work of Oxfam for example those hit by natural disasters would need emergency aid therefore Oxfam would have to respond quickly to aid these people and decision making would have to be of speed whereas for local projects such as ‘reducing the need for food banks’ is a project that is continuous and would require constant decision making as the need to use food banks may vary over time according to factors such as the economy.

Relationship and communication with stakeholders

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Asda use Twitter which allows them to communicate with their customers by tweeting which is a form of interaction by sending out public messages on their twitter page. This method of communication is very effective as it allows customers to interact with Asda 24 hours a day so when they complain they get a response within a suitable time frame which is positive for the business as the customers would feel like they are being listened to and are valued by the business. This would mean that it creates customer loyalty since customers feel like they are important whereas if they were not listened to they would perhaps go to an alternative supermarket. However there is a big drawback of using twitter as once a customer tweets the information they have put out cannot be withdrawn unless they want to. This means bad publicity for the business affecting their reputation and decreasing customer loyalty and profit for the business which would mean that Asda would have to find alternative methods to bring profit and reputation back up otherwise competitors could take the lead. Another key advantage is that twitter can be used for promotions which would attract customers to go in store and take advantage of the deals increasing sales.

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Oxfam also uses twitter to communicate with its stakeholders. This method of communication is in particular effective for a charity like Oxfam as they would be able to display their work on their page which would encourage donors who view their page to donate as they would see how their money would be spent and also touch them emotionally encouraging donations. The downside to this form of communication is that twitter has a limit to the characters that can be used in one tweet which is 140 and being a charity Oxfam would want to be informative as possible enabling donors to feel as if they can trust the charity which they wouldn’t be able to do in this short limit. Another disadvantage is that Oxfam has a small following of 271k, suggesting that their twitter platform is not effective as people may use twitter for other reasons other than following charities and perhaps the donors may be of different demographics to who use twitter.

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Employees have a huge part to play at Asda as they are in charge of the day to day running of the business therefore communication with them is vital so they know what they are doing and to understand how their behaviour effects the business. Asda’s ‘Total Package’ is an employee portal which allows employees to view old and new payslips. This allows the company to do things paperless and the fact that you can access historic pay slips means that if employees want to apply for a mortgage or have got a letter from HMRC to give an estimate of how much tax they need to pay they can use these pay slips to do this whereas if the pay slips were on paper they could perhaps be harder to find. This method is also effective to communicate with employees as the website has ‘ Asda Stars Recognition’ site to nominate a colleague or to use star points which is a scheme that lets colleagues nominate each other for points. Each point is equivalent to one pound allowing them to build these points and spend them in store. This is a subtle but effective method of communication as it allows recognition amongst employees making them feel valued but it may not be effective as it does require the internet also older colleagues may prefer paper pay slips instead as

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they may not trust computer systems. Also they could improve this method by doing something similar in store for those who do not feel comfortable using the internet. Oxfam’s leadership team which is made up of divisional directors and chief executives who have meetings to communicate with each other. This allows them to sit together and speak about the aims and activities of the charity so that they all have a good idea of what is expected of them. This method can be useful in an emergency as they could quickly get together and make decisions whereas a method like emails could take time and would defeat the purpose of acting fast in an emergency. While meetings can be good there is a huge disadvantage of this method being that those taking part in the meeting may not have evidence of what has been said in the meeting which could mean disputes among each other so this method could be improved by perhaps using a recording method such as a tape recorder or video camera during the meeting. To conclude twitter can be an effective method of communication depending on the type of company using the site and also the stakeholders. A company such as Asda would find twitter really effective as they could deal with customer complaints quickly and also be an effective method besides advertisements on television, radio etc. Whereas for Oxfam this method may not be as effective due to not having a big enough platform and donors using other methods of communication. The employee portal is not a very effective method of communication as it is very brief and may not be used by some employees as they may find it effective however the point scheme is effective as it can act for an incentive for employees boosting staff motivation. Meetings would be one of the best methods as they can be thorough and a strong form of communication however there is no evidence of what has been in the meeting leading to potential disagreements.

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Source Table Image or source

Website https://corporate.asda.com/our-story/our-history

https://www.youtube.com/channel/UCP19oUtmzamYAOTuOpTfThg

Asda operates at a national scale with 631 retail units in total. 339 being Asda superstores, 206 Asda supermarkets, 33 Asda living, 32 Asda supercentres and 21 petrol fuelling stations of 2017. Each of these stores vary in size and what they have to offer. ‘Oxfam is an international confederation of 20 organizations working together with partners and local communities in more than 90 countries. Today, there are 20-member organizations of the Oxfam International confederation. They are based in: Australia, Belgium, Brazil, Canada, Denmark, France, Germany,

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https://www.statista.com/statistics/300543/asda-number-of-storesin-the-united-kingdom-uk/

https://www.oxfam.org/en/countries/history-oxfam-international

Great Britain, Hong Kong, Ireland, India, Italy, Japan, Mexico, The Netherlands, New Zealand, Quebec, South Africa, Spain and the United States.’ https://twitter.com/asda?ref_src=twsrc%5Egoogle%7Ctwcamp %5Eserp%7Ctwgr%5Eauthor

https://twitter.com/oxfamgb

https://www.asdatotalpackage.co.uk/

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