P1: Explain the Features of two contrasting businesses
Tesco is a public limited company meaning it is a separate title from the owners so it has limited liability, this type of ownership is under the private sector category, meaning their ultimate goal is to make profit. Tesco was originally a self-service that became England’s first supermarket. In 1955 they brought 19 stores and by 1960 they had over 500, this marks a milestone for the business as it was their first big step into expansion. In the 1960’s the company started to introduce the green shield stamp, this stamp could be traded in for the selection of goods they had in the catalogue, this obviously gave them a USP because it made them different to other supermarkets because no big retailer had done something like this at that point. A factor that contributed to the success of Tesco was in 1982, a man called Sir Ian MacLaurin, had the innovative idea to launch ‘Checkout 82’ this would involve cutting down prices from between 3%-27% on over 1000 food items. This idea worked because the demand increased because the price dropped, it also created a need to find out what the discounted items are. This project helped polish Tesco’s success, it added character to the brand and increased the customer loyalty, which overall created a better brand image for the supermarket. The main intention behind it was to drive up sales and increase consumers.
2919095424600Tesco has a hierarchical structure because it has many positions of authority and many ways to progress through the functional areas within the job. Large companies usually have this organizational structure as it is more of an effect because of the close control it brings to the employees and has different leadership qualities. This ultimately means in Tesco all the workers will have a set of instructions that need to be completed throughout the time period, these would be issued for the benefit of the supermarket. In a hierarchy communications are established throughout the network until it gets to the necessary person, for example a regional manager would set the store manager multiple tasks at the start of the week so that they can begin to issue out the tasks across the team of workers or, if they had caught a shoplifter the security guard would have to contact the store manager because it would be their decision on what happens next.
A disadvantage of having a hierarchical structure is that it allows limited communication between employees which could cause a decline in team motivation, so say someone got promoted and another person thought they were doing a better job it could lead to an uneasy atmosphere between the staff and jealousy could arise. Another disadvantage often seen for this structure is that some leaders don’t see the bigger picture which could pre-empt a failure of the overall objective whatever it may be.
Tesco is well known for and has won multiple awards for things such as its customer support, retail supremacy and its consistent pricing. It also has a long history in the UK with a consistent reputation for being one of the most profitable distributors. Their records show that it will be recognised as a top supermarket for the years to come, this is shown by this will attract a larger base of customers because it will make Tesco seem trustworthy and reliable which will expand the target audience. A key factor in Tesco’s clout is that they are an international business spread across 13 countries such as France, China, India, South Korea, the UK and the states. The ideology behind Tesco’s scope is very beneficial for their business because it increases their overall activity and will allow them to gain more net profit.
Though Tesco has many strengths, it also has disadvantages through its weaknesses, for example the competitors, ASDA Sainsburys etc. have all started to do price drops which has lead to a never ending war on who creates the best profit margin. Whilst the price dropping goes on it would be smarter for Tesco to think of a smarter approach, which effectively they have done by introducing the Clubcard
Tesco has thousands upon thousands of stakeholders which also means they have a lot of relationships to maintain, these consist of their; suppliers, customers, employees, the local community, the government and the trade union. Tesco is a large business because it has over 500,000 employees, across 6,680 stores. Employees are stakeholders in Tesco’s business because they have a common interest in whether the store is doing well or not.
Tesco manage their employees by developing new surveys and operations such as the listen and fix operation this was introduced to make it a better environment and to cover all the areas that are essential to be covered within a business, this was launched to better the two way communication between the employees and employers preformed through multiple platforms such as: internet, text and emails. This benefits the success of Tesco because it improves the workplace for the staff which would fundamentally improve the working environment, as a result of this customers would also be more inclined to shop in a happier and more motivated place because it makes them feel included in the stores lifecycle whilst shopping.
Customers are stakeholders within Tesco because they want high quality products at a reasonable price and Tesco says that no ones tries harder for customers, they do this by meeting the customer’s needs with respect, trust and support. This is valuable for the relationship as trust and respect only works if it’s two ways. if the purchaser trusts the supermarket with the product they are going to get the sale and the loyalty will begin to increase with each individual. I believe this is a contributing factor for Tesco’s current accomplishments because without the customers they would get no sales which would then lead to their brand image and reputation not being as substantial as it is at this point in time.
Tesco’s vendors have common interests as they want persistent orders, reliable payments and to be associated with companies that have high prominence in the industry. This is what makes them stakeholders as there is something in the exchange for both of them, Tesco get their supplies and the suppliers get their money and clout. However, reports from news agencies such as the BBC and Telegraph. The BBC’s report shows that Tesco’s relationships with the suppliers isn’t at top spec due to “delaying payments to benefit its own financial position” this brought dramatic exposure to the supermarket, consequently their stock dropped by 32% in that year this also led to Tesco being threatened with a financial penalty of £500m for its accounting infringements however they were not persecuted .
The Telegraph go on to say in their report that in 2015 Tesco is trying to re establish relationships with their suppliers by introducing the ‘Tesco Supplier Network’ which will allow 5,000 suppliers to have their input on how their being treated, what the issues are and how the issues can be dealt with. Following this project Tesco’s shares rose 35pc in a month due to the positive reaction from the forward-looking investors. This reaction would’ve been very beneficial for Tesco as their damaged reputation was slowly fixing as it was actually sticking to its values.https://businessteacher.org.uk/swot/tesco.php
https://www.tescoplc.com/about-us/history/Ownership: public limited company which comes under the private sector meaning they are there to make profit
Purposes: the purpose of Tesco is to offer a wide range of services and provide their customers with the essential products, ranging from Tesco mobile to Tesco bank
Sector: Tertiary because it provides a service across all bases and it doesn’t fit under the other ones.
Scope: Tesco is a national business because its based in the UK
Size: Tesco is a large business as it has 335,000 employees across the country it has a turnover of ….
Reason for success: Tesco’s success has thrived because they have made themselves a national based company with good products at an affordable price.
Organisation structure: the multiple different roles within Tesco’s hierarchy
Oxfam is a non for profit business