In this assignment I am going to be researching 2 different business in detail and explaining why they’re so successful. The type of research I will be looking at will be, their size, their ownership and liability, their organisational structure and their aims and objectives. The two businesses I am going to be looking at are, Tesco PLC and Cancer Research UK.
P.1/Explain the features of the business
Tesco PLC is a multinational supermarket that originated from the UK.
With around 6,849 stores worldwide containing 362,370 full time employees. And 3,710 UK stores that have 225,192 employees. They were founded in 1919 in East London by Jack Cohen. Tesco was originally started by Jack Cohen selling surplus groceries from a market stall in the East End of London in 1919. Jack Cohen then bought tea, in 1924, from Thomas Edward Stockwell, whose initials make up the first three letters of the name Tesco.
As a PLC, Tesco’s shares are available for purchase from the public.
For Tesco an advantage of being a public limited company is having the ability to raise share capital. However, as their financial situation effects their share price, the company’s financial performance is always visible to the public. As a PLC, Tesco is also an LLC (Limited Liability Company) this means that all debt incurred by Tesco isn’t directly the legal liabilities of owners and shareholders.
Tesco PLC offers a wide range of products and services from groceries, household products, clothing to insurance (travel insurance). This is not only done through Tesco supermarkets but through many of their subsidiaries.
As a retailer Tesco is part of the tertiary sector. However, Tesco do sell own-brand products so they could be classes as a secondary sector business as well.
According to Tesco’s website their core purpose it to serve shoppers a little better every day. Tesco’s values are; Understand customers, be first to meet their needs, Act responsibly for our communities. Tesco’s purposes and values are all about customer experience, they aim to satisfy their customers by improving each visit from the last. This is important to them because this creates a positive relationship with each customer, resulting in a positive brand loyalty.
P.2/Explain how stakeholders influence the business
A stakeholder is anyone who has a connection to a business. Internal stakeholders for Tesco would be; employees, owners and managers. Whereas external stakeholders would be; customers, suppliers, government and shareholders.
Employees will want Tesco to give them higher discount on products as well as higher salaries and/or bonuses. They may influence this by requesting wage rises from their managers. Rarely some employees could arrange a strike, where they won’t work, to prove a point to the higher ups at Tesco. They could also be influenced by working harder as this could potentially result in a wage increase or promotion.
Its important that everything we do as a business is built on open and honest conversations between colleagues. Over the last few months weve tried to throw open a bigger discussion about the direction of our business internally; focusing on face to face communications is just one way that we can ensure all colleagues can be heard.
Managers at Tesco will be interested in customer and employee satisfaction. By satisfying the needs of customers it will make them more likely to return to the store and spend more money there. Employee satisfaction matters because if you have happy employees, theyre more likely to be more productive at their jobs. They could push employee satisfaction by offering bonuses for hard workers, or even offering higher employee benefits.
Owners of Tesco care very much about how much profit Tesco brings in. The reason for this is so they know if big shareholders will be happy with the outcome of the finances. Theyll also want to find more investors so that they can expand Tesco and continue to grow the brand. They may keep investors happy by paying them dividends yearly to keep them interested in the business. In 2019 they paid their investors a dividend of 3.67p per share that they have in Tesco.
Customers will hope for Tesco to reduce their prices of products because they won’t have to spend as much money. They may influence this by not buying certain products that are priced too highly, often in this case Tesco will hold a sale to decrease stock. They may also want improved service from Tesco, and staff employed by Tesco. In this case they would speak to a manager or HR to report any issues in their local store that is dragging down service.
The most important skill in our business is listening and that starts and ends with the way we listen to what customers tell us about our business. This year weve tried to work harder than ever to respond to the issues our customers are raising and our business plan for the future is built around the feedback customers have given.
Tesco’s suppliers would be interested in making sure that Tesco pays them an accurate worth of the products they’re selling. They will influence the business by refusing to sell products to Tesco if they’re not paying reasonable amounts. They will also influence this by ensuring that theyre selling satisfactory products, otherwise Tesco may refuse to pay.
Since our new CEO joined the business, he and our new Chief Product Officer, Jason Tarry, have visited many of our suppliers personally to hear what we need to do differently. Weve also brought in a new Supplier Helpline to make sure were responding quickly to any issues that arise.
The Government will be interested in Tescos as they are the biggest private employer in the United Kingdom and all money that they make is taxable. The government could influence Tesco to pay correct taxes by double checking all payments and ensuring everything is legit. As well as this they will have to do many checks for food quality with Tesco’s products, especially because they’re so widely available.
Shareholders are interested in Tesco’s financial situation as then may have a lot of money invested into Tesco’s operations. They could influence Tesco to keep doing well and raising prices of shares by threatening to withdraw any investments, or by rewarding profits with extra investments. As well as share price increases, shareholders will also want yearly dividends from the business that theyve invested in although this isn’t required by businesses.
P.3/Explore the organisation structure, aims and objectives of the business
Above is a picture of what Tescos oranisational structure would look like for a store.
Tesco has a tall structure. This is visible from the multiple layers of hierarchy presented in the diagram. One of the features of Tesco’s organisational structure that stands out is the face that is it based on function rather than location.
A hierarchy is a system where members of an organization are ranked according to relative status or authority. In this case, top of Tescos hierarchy would be the regional manager. In business, span of control means the manageable number of subordinates of a superior. An example for Tesco would be that the Fresh Food Section Manager has a span of control over 4 others. In an organizational structure, a chain of command is the way things are communicated. If something had to go from the Regional Manager to a Produce Assistant then it would follow a specific line down the hierarchy until it reached the person, it was intended for. The chain of command also helps to establish accountability. Some managers may often delegate important decisions to other employees, usually employees they manage, if it reduces the workload for the manager. The manager should only do this if the chosen employee has experience in their field and knows the effects of the decisions. Throughout Tescos organisational structure, delegation may appear when the Store Manager has too much work and he may ask a departmental manager, e.g. Personnel Manager, to complete simple task to help reduce workload.
One of the aims that Tesco have is to retain their control over the supermarket industry, owning 27.9% of the market share, while continuing to provide good services and products at a lower price than their competition.
This objective is specific because it talks about what they want to do in simple form, increase customer satisfaction without losing market share. Although there’s many things that could be done to affects these aims, it is still a specific end goal.
This is a measurable objective because Tesco can view their control of the market share whenever and see if they’re still in control of as much as before. They can also request that their customers do surveys monthly or bi-monthly about the service that they receive at their local Tesco, this will portray how customers feel about shopping at Tesco and possibly how service could be improved throughout all Tesco stores.
Tesco will do their most to achieve this goal by ensuring that they focus on customer service throughout their stores as well as their subsidiaries. Ensuring customer satisfaction is a way to promote the brand and possible gain free advertisement through word of mouth. Tesco would also need to focus on their finances to keep in control of their cash flow.
Tesco know this is a realistic aim as theyve dominated the market for so many years and its well within their grasp to be able to continue control. The long running control of the industry portrays to Tesco that this aim is relevant to their brand.
Tesco have set themselves a 3-year period in which they want to achieve this aim in. So, this means that the aim is time-bound to 3 years.