BTEC National Level 3 Extended Certificate in Business
Learning aim A: Explore the features of different businesses and analyse what makes them successful
A1 Features of a business
In this task, I have been asked to research how the well named supermarket Tesco was founded and its history. Also I have been asked to explore the different features of the business and why they make them successful.
In 1919 in Londons East End, the first ever Tescos was founded by Jack Cohen when he sold surplus groceries from a market stall, where Cohen made a profit of ?1 from sales of ?4 on his first day. Jack Cohen came up with the name Tesco when he bought a batch of tea from T.E Stockwell, he used the first three letters of the suppliers name, TES, and the first two letters of his surname, CO. Creating the name Tesco. The first Tesco supermarket was a converted cinema in West Sussex and opened in 1968. Now Tesco have a total of over 4800 stores in 13 different countries, making Tesco the largest retailer in Britain and fourth-largest in the world behind Wal-Mart, French Carrefour, and German Metro. Tesco opened its first petrol station in 1974, which would then make Tesco the largest independent petrol retailer. By 1979 total petrol sales topped ?1billion and then 3 years later, in 1982, sales had doubled to more than ?2billion. In 1994 Tescos fought and won Sainsburys for control of the firm that is based in Dundee, which operated 57 stores. By winning this, it made it possible for Tesco to expand into Scotland then into Ireland in 1997. The loyalty scheme, Tesco Clubcard, was introduced in 1995. It now has 32 million active holders. In the same year they introduced the online shopping which is still active to this day.
All businesses are owned in one of three ways:
Private- privately owned businesses are owned by citizens and those citizens are responsible for all parts of the business. The person who owns a private business is more likely to take risks because they want to make a profit from the business. Private businesses can be any size and owned by many partners. Four of the largest private businesses include Cargill, Koch Industries, Albertsons and Deloitte.
Public- public owned businesses are owned by the government. These businesses may have been created by the government or bought from the private sector to save them from financial ruin or for investment. Such as Northern Rock and the Royal Bank of Scotland. Public businesses are less likely to take risks than private businesses, this is because the government are liable for the success or failure of the business and because they aim to benefit the public.
Not-for-profit- charitable organisations are often not-for-profit businesses, examples of British businesses would be Cancer Research UK, Oxfam, British Heart Foundation and RSPCA. Businesses like this are very similar to a private or public business, but they only seek to make enough money to cover the running costs of the business.
Tesco is a PLC (public limited company). A PLC is a company that sells/trades its shares to the public. These shareholders fund the company which makes it possible for Tesco to expand.
Tescos purpose is to sell a wide range of products and services to customers to create value and for customers to earn a lifetime loyalty. They also aim to maximise profits by maximising sales, as well as providing goods and services that are affordable for the general public. Another aim of Tesco is to remain the number one retailer in the UK and to be better than other competitors such as Aldi and Lidl.
Every business operates in a different sector according to the nature of their business and the product/service they provide. These sectors are:
Primary- they source and produce the raw materials and basic foods. E.g. agriculture, mining, forestry, farming, fishing and quarrying.
Secondary- this sector takes the output from the primary sector and manufactures it into useable products for other businesses, for export, or to sell to domestic consumers. E.g. industries that produce a finished and useable product or are involved in construction.
Tertiary- also known as the service industry/sector, the tertiary sector provides services to its consumers. E.g. financial institutions, schools and restaurants.
Quaternary- this is based on knowledge applicable to some business activity, which usually involves the provision of services. E.g. information gathering, distribution and technology, research and development, vocational education, business consulting, and strategic financial services.
Tesco is a retailer and provides services such as wholesale sales, transportation and distribution to the general population and other businesses. Therefore, they would be in the tertiary sector as they make profit from it. However, they could come into the secondary sector because they make and sell their own products for example they have their own brand of food, and they have bakerys in store that create fresh baked goods daily.
Businesses always operate either:
Locally- operating with multiple locations to a local population in a specific area.
Nationally- a business that operates within a certain country.
Internationally- a business that operates over multiple countries.
Tesco is an international business which has stores across Europe and Asia. These include United Kingdom, Thailand, Poland, Hungry, Czech Republic, Slovakia, Ireland and Malaysia. In total Tesco have over 6,500 stores in those 8 countries. With the most amount of stores being in the UK and Thailand. It no longer has stores in France, Japan, South Korea, Turkey and United States. Tesco can also be seen as a local business because it is trying to fight other local businesses with the use of the Tesco Express and Tesco Metro stores.
The size of a business is determined by the amount of staff they have.
Micro- up to 9 staff members
Small- 10-49 staff members
Medium- 50-249 staff members
Large- 250+ staff members
Tesco would be classed as a large business because it has around 460,000 staff internationally including more than 300,000 in the United Kingdom.
Reasons for success
Tesco has many reasons for their success over the past 100 years. I will be talking about a few of the main ones.
Customer loyalty, reliability, quality of products, offers, price
A major reason for Tescos success is their customer loyalty and the strength of their brand. Tesco are constantly committing to provide high quality goods with low prices, which makes it clear that their main priority is their customers and their loyalty to Tesco. In the stores, Tescos constantly have deals on in-store, such as buy one get one free deals or two for one deals.
Tescos constantly have advertisements that play on the TV and radio.
Diversity (other products/services), online shopping, technology
Another major reason for Tescos success is that they offer a wide range of products and services. These range from groceries to home d?cor to insurance.
Another reason for their success is that they have different types of stores. Tesco metro/express which are smaller stores that are in locations that dont have a large superstore. These create a quick and easy shop and it is more convenient for some people. They also have stores that are open 24/7 which also make it more convenient for customers as they dont close so customers can go whenever they want. Almost all of Tescos superstores have Tescos own petrol stations which could also be convenient if a customer needs petrol as well as their weekly shop. Overall, the amount of stores and the different types of stores draw customers in because they are quick and convenient.
In the next part of my assignment, I will be talking about the charity organisation WaterAid. I will talk about what features make the business successful.
Water Aid was officially established on 21st July 1981, with their first projects starting in Zambia and Sri Lanka.
Ownership and liability
To provide clean water and decent toilets to those in need
Reasons for success
Comparison table for Tesco and water aid
A2 Stakeholders and their influence
In this task, I have been asked to research the shareholders of the supermarket Tesco, and how they influence how the business is run. Stakeholders are people who are interested in a specific company or business. They can be either internal or external, internal normally having direct control of the business, whereas external would usually be in indirect control of the business.
Internal (Owner of all Tesco in general, managers of stores/area, staff in stores/HQs, shareholders)
I have researched Tescos stakeholders and I have found out that the internal stakeholders would include the owner of Tesco, the managers of each Tesco store, the stores employees, and the shareholders of Tesco. Owners are internal because they decide how much money goes into the business and where new stores would be opened. External (Suppliers, customers)
I also have researched the external stakeholders of tesco and I have found that they would be the suppliers of goods, the customers that go into stores and shop online,