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Unit 1 – Investigating Business
Business Aims and Objectives
Most businesses have aims and objectives about how they are going to
make their business successful. Most businesses have different aims
and objectives. For example a schools main aim will be getting as
many students to a high educational standard. Some businesses may
state official aims in a statement that is part of the business’s policy.
The mission statement of First Direct, the telephone banking arm of
HSBC, is to `create harmony between the services it provides and the
way people live their lives with simple, straightforward products`.
Another example is BUPA, the private health care and insurance
company, has a vision statement of `taking care of the lives in our
hands.
Aims
An aim is a goal the business wants to achieve. For example to make a

good profit, the business has aims to reach their goals such as
expanding or improving their services or quality of goods.
All businesses aim to provide goods and/or services, either to their

local community or to the wider community.
The main aim of every business is to survive. The only way it can do
this is to make a profit. Its turnover, the goods or services it sells
must be bigger than its operating expenses, or the day to day cost of
running the business.
These are some examples of aims of a business:
Making a profit
Being environmentally friendly
Improving product quality
Expanding, providing goods and services to a wider community
Maximising sales
Providing excellent service
Providing charitable or voluntary service
Objectives
Mayur Patel Exam No: 2272 Centre ID: 13216 Page 1
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Business objectives are what the business will set itself to complete
the aims. To achieve your aims you will need to take specific steps
towards them. First, you have to decide what these steps are, and
then you have to keep on doing them.
Tesco’s objectives
A business such as Tesco also needs some way of measuring their

progress so that they know whether they are on target to achieve their
aims.
Tesco also need to decide what steps to take to achieve their aims and
to set targets or objectives along the way. Tesco may try to:
Sell more products than its competitors in order to increase their

income. They could make sure that their most popular products
are always visible and easy to get.
Tesco may provide more services than in the previous year
Tesco may produce new goods or provide a new service to
attract more customers. They could find out which services other
competitors are providing.
Tesco could also improve a product or service by doing market
research.
Below you could see what Tesco aims to provide to the:
Customers
Community
Operations
People
Finance

Tesco’s aims
Tesco’s main aim will be to provide a good service to all customers,

while providing an acceptable return for its shareholders. Tesco has a
key phrase which Tesco basis its business around, `Creating value for
customers to earn their lifetime loyalty`. Tesco listen to the customers
needs better than any other business, as they provide an excellent
service (customer service). This would help retain customers and gain
a healthy profit. Tesco have four types of stores so this will provide
them with a steady sales revenue. The four types of stores around the
UK and they are, Tesco superstore, Tesco Extra, Tesco Express and
Tesco Metro. Tesco have located each of these stores in an excellent
location around the UK. While they gain customer loyalty by doing this
they will also gain a steady income so they will be able to share some
of its profits with its shareholders. However if they don’t make
customer loyalty and gain a steady income, they will lose money and
so will its shareholders. The shareholder of a Tesco is always at risk of
losing their money, which is why Tesco offer a better return than that
of a bank where the shareholder is at no risk of losing money.
Another of Tesco’s aims is to look after their customers as customers

are very important because they provide income to the business. Also
Tesco need to do their best to deliver good products at a cheap price
to their customers and the public. Tesco aim to treat all their
customers in an appropriate manner. By doing this Tesco will gain
customer satisfaction and lifetime loyalty. By treating their customer’s
well Tesco will also get a good reputation and also they may gain other
competitors customers.

Tesco also aim to understand their external customers needs better.

Therefore, Tesco carries out market research to find out the customers
needs. They produce surveys and questionnaires for the customers to
fill out. Using market research, they can see how their products may
compare to other supermarkets and which products the customers like
the best. Tesco also understand what customers aim to look for in
their stores:
Good value products

Care and attention from employees working there
A good after sales service
Correct information about the product
Rapid response to enquiries
Clear and honest information
Help with individual or general issues
Tesco welcome all types of customers, which is why they have set
their aim to produce all different types of food to suit different people’s
needs. They also aim their food to different types of products. They
have `Tesco Finest` food for people looking for something special.
`Value food`, which are for people on a tight budget or are shopping
cheaply. They also have `healthy living` food for their healthy
customers. This aim brings in more custom meaning more capital for
the business expand. They also make sure all their prices are low
enough to attract more customers into the store. This is important as
the customers bring in income into the business.
Tesco aim to be enthusiastic towards their customers and help them

out whenever there is something wrong with the type of good, clothing
or any other product. Tesco’s aims are very good because people tend
to spend their money with a company, which provides good customer
service. However people will not like to shop at a supermarket which
has poor customer service. Customers will want clear and honest
information about the product the want to buy from the employee
working at Tesco. To improve the customer service, Tesco can send
their employees for away for customer service training.
Tesco has a long term strategy for growth, based on four key parts:
growth in the Core UK business, to expand by growing internationally,

to be as strong in non-food as in food and to follow customers into

new retailing services.
Tesco’s main purpose is to create a value for customers to earn their

lifetime loyalty.
Their success depends on people. The people who shop at Tesco and
the people who work for them.
If the Tesco customers prefer what Tesco offer to them, they are more
likely to come back and shop with them again.
If the Tesco team find what they do rewarding, they are more likely to
go that extra mile to help their customers.
This is expressed as two key values:

No-one tries harder for customers, and
Treat people as they like to be treated.
Tesco regularly ask their customers and their staff about what they
can do to make shopping at Tesco better.
This is our Every Little Helps strategy:
Shopping trip
The customers can get what they expect from Tesco

The prices are all reasonable
There is not a lot of queue
The staff are great
A great place to work
To be treated with respect

A manager which provides help
An interesting job
An opportunity to get on with
The way we work
Tesco try to get it right first time

Tesco make jobs easy to do
Tesco always try to save time and save money

Tesco also provide delivery service
Tesco focuses on 4 main areas, which it aims to improve in the future.

These areas are:
A strong UK market. The UK is the core market if the Tesco

business with over 2500 stores. Their strategy is to provide good
customer service. This is a very important area where Tesco
should focus on as they have main stores in the UK and lots of
competition. They need to keep working at how to give a better
service than the rest of the supermarkets in the UK.
Non food. Tesco aims to expand its business even more by
introducing more non food items such as cosmetics, clothing,
jewellery, electronics etc. This is a good aim to achieve, as it will
bring in more customers who come into Tesco to shop for non
food items. Tesco could also make more money by producing
their own brand. It is another reason to bring in more capital and
expand. They aim to make their market share bigger than 8%.
Retailing service. Tesco continues to produce new products and
services to bring in more custom to make the business better
and bring in more success. They also questionnaires to help
them to analyse their customer’s trends and see which food, non
food and services the customer needs. Tesco also have a website
where people can order food and non food products to their
house. This is more convenient as busy parents or old people to
get their weekly shopping. This is a very good way in which the
business can reach its aim of increasing profit as more people
use the internet for shopping.
International. Tesco also have 440 stores outside the UK. By
expanding abroad, Tesco is making itself a very well known
name to everyone. Having stores outside the UK brings in more
capital and reason to expand to other countries.

Year Number
Sales area Planned store
of of
(million sq openings
entry stores
ft) 2006/07
UK 1,897 25.9 153
Czech This
1996table shows35 2.5 44
Republic that Tesco have
opened new
Hungary stores
1994 around the87 4.3 30
world. So this
Poland means
1995 Tesco 105 4.8 39
will increase
Rep. of their
1997sales by 91 2.1 8
Ireland opening more
stores.
Slovakia 1996 37 2.3 10
Turkey 2003 8 0.6 12
China 2004 39 3.5 12
Japan 2003 111 0.3 10
Malaysia 2001 13 0.9 4
South 1999 62 4.1 47

Korea
Taiwan 2000 6 0.5 42
Thailand 1998 219 6.8 207 Nokia

Nokia is the UK’s
market leader in mobile phones and recognised for leading the way in
wireless data and mobile communications. Nokia has helped UK
network operators increase the UK mobile phone market to over 50
million phone subscriptions. The UK also has one of the world's highest
subscription penetration rates, with well over 75%. In bringing
together mobility and the Internet, Nokia is working with a wide range
of companies and organisations in the UK to apply advanced solutions
and new services.

The union of the mobile communications, information technology and

media industries opens possibilities for Nokia to create new product
and service categories, such as mobile games, multimedia and
enterprise solutions.
In January 2004, Nokia UK reorganised to further support the
company’s overall structure with its strategy. Nokia’s structure
includes four business groups in forming the main reporting structure
in:
Mobile Phones;
Multimedia;
Networks
Enterprise Solutions
This provides us with a strong organisational base from which to make
progress in the mobility industry.
The new structure is based on a global re-organisation and includes
three horizontal groups that support the business groups: Customer
and Market Operations; Technology Platforms; and Research,
Venturing and Business Infrastructure.
Nokia do very well as a business. In 2006 Nokia were:
World’s leading manufacturer of mobile devices
An estimated 36% share of the global device market
Mobile device volume of 347 million units
Net sales of EUR 41.1 billion
Operating profit of EUR 5.5 billion
68,483 employees of more than 120 nationalities
Strong R&D presence in 11 countries
R&D investment of EUR 3.9 billion
21,453 people in R&D (approx. 31% of the Nokia workforce)
15 production facilities in nine countries
Sales in more than 150 countries
World’s sixth most-valued brand (ranked by Interbrand)
Nokia Aims
Nokia’s main aim is to:
Maximise phone sales throughout the globe and attract a wider
range of customers

As Nokia maximise on phone sales, their income would increase as

their sales have increased. So sales in a business such as Nokia are
very important as that is a way they bring income into the business.
Nokia intend to capitalize on their leadership role by continuing to
enter a part of the mobility industry that they believe will experience
rapid growth or grow faster than the industry as a whole. As demand
for mobile services increases, they also plan to lead the development
and commercialization of high capacity networks. Historically,
expanding into segments with these characteristics during the initial
stages of their development has helped Nokia to establish itself as one
of the world's leading players in mobile communications and has
enabled Nokia to significantly influence the ways in which voice and
other services have been transferred to a wireless, mobile
environment.
As Nokia aim to continue to do this, Nokia’s three main strategies are

to:
expand mobile voice

drive consumer mobile multimedia
Bring extended mobility to enterprises
Expand mobile voice
Nokia believe that many opportunities for growth exist in the mobile
voice market, and they plan to continue to focus on this area. The
markets on which we intend to focus include markets with low mobile
subscription rates relative to the size of the population, geographic
areas where it is more cost-effective to build wireless infrastructure
than fixed-line networks, and heavily populated areas, where factors
such as poor housing infrastructure or theft of materials tilt the scales
in favour of wireless solutions. Nokia also intend to focus on markets
where the need for network capacity is growing as a result of mobile
network operators promoting the replacement of fixed networks with
wireless.
Drive consumer mobile multimedia
Nokia intend to enter new product and service niches, which we expect
will emerge as technologies from various industries start to join,
especially in the area of consumer multimedia. Our strategy is to
explore, identify and extract revenue from the most profitable and
fastest growing segments of the consumer multimedia business and its
value chain by anticipating consumer needs in this area, and
developing new products and services. In the near term, they intend
to focus on imaging and games, where they have already introduced a
number of products.
Bring extended mobility to enterprise
Nokia intend to capture profitable segments of the commercial market

by offering products and services that will benefit companies and
individual business people alike, including a diverse handset range as
well as security and mobile connectivity solutions specifically modified
for enterprise needs. As we do this, we intend to capitalize on
companies needs for mobility and seamless mobile connectivity in their
operations, and also expect to team up with leading technology and
systems integration partners.
Nokia believe that their three main strategies will position our business
favourably as different digital technologies and industries converge.
They also aim to drive open standards, specifications and
interoperability, for the purpose of ensuring the introduction of new,
interoperable mobile services worldwide. In this context, they intend to
continue our pursuit of new business areas in the world of mobility,
while continuing to build on our leadership in mobile voice. This in turn
means that we must cultivate a strong local presence in all growing
markets and pursue collaboration and investment opportunities in
order to obtain complementary technologies and a strong market
position.
Nokia objectives
Nokia also have objectives which can improve the business

To be safe and use environmentally sound products and to be
energy efficient
To be good cooperate citizens and act responsibly
Nokia Business Group Structure

Nokia comprises three business groups:
Mobile Phones connects people by providing expanding mobile voice

and data capabilities across a wide range of mobile devices.
Multimedia gives people the ability to create, access, experience and

share multimedia in the form of advanced mobile multimedia
computers and applications with connectivity over multiple technology
standards.
Enterprise Solutions offers businesses and institutions a broad range

of products and solutions, including enterprisegrade mobile devices,
underlying security infrastructure, software and services

Business Ownership
There are several different types of business ownerships. Depending

on the type of ownership, the owners have different responsibilities
and involvement in a business. One aspect of this is who bares the
business risk and whether the owners have limited or unlimited
liabilities. Different types of owners are:
Sole trader
Partnerships
Co-operatives
Franchise
Public sector
Company
– Private Limited Company
– Public Limited Company
Sole Trader
There are many businesses in the UK which are sole traders. The
owner has complete control of the business, and is totally responsible
for its success or failure. Running your own is business in extremely
hard work because you working on your own. The risks are great, but
so are the rewards in job satisfaction.
Advantage
There are many advantages of a sole trader and the main one is that
the owner keeps all the profits. Though the owner must save enough
money to pay tax, interest charges on loans and Vat. It is simple and
inexpensive to set up as sole traders as start up costs are usually low.
However, before starting your own business you must notify the
income tax authorise and the department of social security, as you will
be taxed and will pay self employed national insurance contributions.
The business will be very flexible because if the business is not
profitable, the owner has the choice to close. Also the working hours
and days worked can be flexible.

Disadvantage
There are also disadvantages of a sole trader. One example is

unlimited liability. This is when owners are personally responsible for
all the debts of their business. So this risk of being a sole trader is
high because there are chances of failure as there will be competition.
The owner will need money when running a business so it will be
difficult to raise capital. However the government schemes have made
this somewhat easier as they provide grants to help them in their
business. The firm’s growth is often slow as one person can do only a
limited amount of work. The owner may have no experience of running
a business or have any business skills therefore it will be difficult to
start a business. If the owner is ill this can create problems and also if
the business is closed, then expenses continue but no money is being
made. A sole trader must register the business with the Inland
Revenue and is responsible for keeping accurate business accounts
and completing an annual self assessment tax form. If the owner dies,
then the business comes to an end as there is no one else to run the
business.
Partnership
A partnership is when two – twenty partners control and finance the

business. They are operating a business as joint owners.
Partnerships are relatively small. They include accountants, dentists

and estate agents. Many partnerships exist in professions where the
professional exist in professions where the professional body insists
that members are personally responsible for their actions.
There are also a few larger organisations which are run on a

partnership basis where the employees become partners when the join
the company. The largest company of this type is the John Lewis,
where all the staff who works for John Lewis and Waitrose
supermarkets are classed as partners and receives a share of the
profits as a bonus each year.

Advantages
Partnerships can be set up in any kind of business, and are found in

the retail trade and among small firms in the services sector.
Partnerships provide the business with a range of skills which can

specialise in their own areas and increase the range of services they
offer to customers. In a firm such as solicitors, one partner might
specialize in wills and trusts; another in criminal law; and a third might
be in criminal law. As there are more than two people involved in the
business, the partnership may have more profitable ideas than a sole
trader. Also, it will be easier to raise money as each partner
contributes a share. If an expansion was taking place it would be easy
to obtain start up capital and raising money for expansion as all the
partners contribute.
Disadvantage
Although some partnerships have worked successfully for years, there

are probably more chances of argument in partnerships than in any
other form of business organisation. Therefore that is a reason why
there is a `Deed of partnership`. This is a legal document which
covers such matters as who provides the capital, control of the
business, distribution of profits, settling disputes, etc. So this
document covers all possible points of disagreements that could arise.
When you form a partnership, you must remember that all the
partners are legally responsible for partner’s ship’s debt. This includes
sleeping partners, who invest money or lend their name to the
partnership, but take no part in its management. Also in law, partners
are liable for the actions of each other. For example, if one partner ran
up large debts and the disappeared, the remaining partners would be
responsible.
In partnerships, partners are self-employed similar to sole traders, so

they must register their business with the Inland Revenue to keep
accurate accounts and complete self-assessment tax forms.
Partnerships have unlimited liability, so they are responsible for all the
debts of the business.

Co-operatives
A co-operative is different from any other type of business. It is owned

and run by the whole work force. The owners of the co-operative
business try it on democratic principles and sometimes support local
events. There are three different types of co-operative businesses and
these are:
Worker co-operative
Consumer co-operative
Marketing co-operative
Worker co-operative
A worker co-operative is different from any other type of business. It is

owned and run by the whole work force. Its members believe in
working together for a common purpose. It tries to ensure that
everyone has a say in how the business is run. In a worker co-
operative membership is open to all workers. Any profit made is
distributed to members in a fair way. Members are in control, not
outside shareholders, though some workers co-operative employ a
general manager. The workers co-operative would reduce conflicts
because the worker and the owner is the same person. Members
would have a greater sense of responsibility and work harder to make
the business succeed.
Working in the business would become more enjoyable and provide

greater job satisfaction. Increased motivation among the workforce
would provide better goods and services.
As local people are involved in the business, the co-operative would

have closer links with the local community.
Consumer co-operative
Co-operative societies have more than 8 million members and a

turnover of £7.5 billion a year. However, they still have many smaller
shops that find it difficult to compete with big supermarkets. These
local stores are kept partly for idealistic reasons, as some of their older
or less well—off customers find it impossible to visit out of town stores.

Marketing co-operative
There are also the marketing co-operatives. Marketing has always

been a problem for small businesses. It is where separate businesses
join together so they can market all their products.
Advantage
Each worker in the business has an equal share in the business. Also
each person has an equal share of the profits. All decisions are made
jointly by the owner and in the collective interest of everyone. Jobs
can be rotated so people can extend their skills and the least popular
jobs can be shared. Workers are not forced to be owners, so each
worker can make an independent decision.
Disadvantage
Co-operatives must make a profit or they will fail, that is the same for
all ownerships. Poor management, planning and financial controls have
closes some co-operatives.
Co-operative are often formed by the workers of a big company that

closes down an unprofitable business. If the company, with all its
resources cannot make a profit, the chances of the doing so are small.
An example is the Minehead Shop co-operative which had survived for
only 14 years.
Another disadvantage is that it is often difficult for co-operatives to

raise finance or to attract business, since some people have no faith in
this type of organisation. Some of the most popular co-operatives are
catering, computers and cleaning.
Financial organisations such as banks are often wary of lending money

to co-operatives because there is no recognised leader. Decision
making can also take a long time if everyone is involved. Members
working in the business often lack financial and business skills.
Franchise
A franchiser is a firm which allows another person to use its tried and
tested product, and to trade under its name, for a fee. A franchisee is
a person who pays an initial fee and payments for the privilege of
trading under another firm’s name. A Franchise is an agreement

between two businesses which allows one to use the other businesses
name and reputation. An example of a franchise is Pizza Hut. There
are more than 300 pizza Hut restaurants around the UK. Pizza Hut is
owned and controlled by Whitbread and with Tricon Global
Restaurants, but many of the outlets are often franchise operations.
This means that there is a manager in charge who operates the
business with the agreement of Pizza Hut. Therefore Pizza Hut has
used franchising as a way to enable their reputation to grow faster and
more cheaply rather than buying all the restaurants itself.
Advantage
Franchises have a greater chance of success compared to most small

businesses as the product has been tried and tested and are reliable in
the market. As the name of the business will be well known, it has a
higher success rate than other small businesses. Franchisees also
benefit from being able to use a brand name which is advertised
around the UK. When starting a franchise there are fewer decision to
make in relation to operating the business and problems can be
discussed with the franchisor. Franchisers provide continuous support.
So if there are any problems, the franchisee can get good advice
quickly and easily. There is also a better chance of solving problems as
they may already have been met and overcome in other franchises.
The franchisee will also find it easier to raise money from banks as
they are taking less of a risk with a franchise operation that with an
untested small business. Most of the profits made from the business is
retained by the owner. The franchisor provides initial training and
ongoing advice and support to franchisees.
Disadvantage
There are also some disadvantages of a franchise. The obvious

disadvantage will be that some of the profits must be paid to the
franchisor because the franchisee is using the firm’s name. The owner
does not have the freedom to make all the decisions, particularly in
relation to the product range or sale prices which may be controlled by
the franchisor. When selling products in the shop, only the franchisor’s
products or services can be sold. All The terms of the franchise
agreement are drawn up by the franchisor. They are likely to restrict
the sale of the business and may include performance terms. So this
means that if target sales are not met, the agreement between the
franchisor and the franchisee may be terminated. Business success will
not be guaranteed as success is still dependant on the skill of the
franchisee and also the dependability of the franchisor. If these

qualities are lacking, the business may fail. The franchisee will not be
able to sell the business without the franchiser’s agreement.
Public Sector
Organisations and businesses from the public to the private sector and
also allowing the private sector to provide public services. Public
sectors are services provided by the government and the local council.
The people who run the council are nominated by the public to serve
as their councillors. They are not paid for the work they do but they
can claim expenses for their voluntary work.
Public corporations
The public sector is a very large employer in the UK, but it used to be
even bigger. This was because the state used to own a large number
of public corporations. There are few public corporations. The main
organisations still owned by the state are:
The Bank of England

The BBC
British Nuclear Fuels
Royal Mail
Many services are taken over by government departments and local

authorities have also been privatised because this is considered more
efficient.
Disadvantage
Many of the public sector services were labour intensive which is

expensive to provide because so many wages and salaries have to be
paid. Most of them were also monopolies as there was either no or
very little competition.
Local Authorities
Councils receive money from the government through revenue support

grant and also charge householders council tax and charge business
tax to all businesses. Other income comes from loans, council house
rents and the sale of council services such as leisure centre charges.

They spend the money on providing a range of services as shown in

the diagram below.
Private Limited Company
A private limited company a firm whose financial liabilities are limited

to the amount of money put up by shareholders. To conform with the
European Union Law, one person alone can now form a private limited
company. Its shares cannot be sold to the public. In a private limited
company the shareholders own are usually family members of the
persons who set up the business. Some of the shares may also be
owned by family friends, business associates and employees.

Part of the company’s profits may be kept back, or retained, to pay for
improvements to the business, and some is distributed to shareholders
in the form of dividends.
Advantage
The founders of the business are usually the main shareholders and
directors of the form. The chairperson of the board of directors takes a
leading part in deciding the company’s policy. He or she is often also
the managing director who carries out the policy day by day. Therefore
the people who started the business actually own the company and
control it.
A private limited company financial liability is limited to the nominal

capital they invested. Unlike a sole trader, who has unlimited liability
for their debt, but a private limited company has limited liability.
Limited liability is limiting the financial liability of shareholders to the
money they have invested.
So all the shareholders have the protection of limited liability and can
lose only the amount they have invested no matter how much money
is owed. Banks are more willing to lend money to limited companies,
both for start up capital and for expansion.
Also the company has a separate legal identity from the owners. This
means that it:
Owns property, hires and pays staff, not the owners.

Continues after the death of the owners.
Can be sold by its owners, simply by selling the shares
Can take legal action in its own name, and have legal action
taken against it. So if you broke your leg because you fell on a
slippery floor on the company’s premises, you would sue the
company not the owners.
All the profits after tax belong to the shareholders. This is usually
distributed according to the proportion of shares held but it is usually
to keep some back as reserves for financing future developing.
Disadvantage
Starting a private limited company is very expensive compared to a

sole trader. A company needs to be registered with the Companies

Registration Office. To do this, the company needs to employ a

solicitor, or a firm which specialises in this work, which will cost around
£150. The company pays corporation tax on its profits to the Inland
Revenue. The company also pays the directors and staff a salary on
which they pay income tax as employees.
The company’s accounts must be audited, so this means it has to

employ an auditor as well as an accountant. There are also other legal
formalities: for example, a company must hold an annual general
meeting and send details of the company’s financial affairs to the
Companies Registration Office every year.
Public Limited Company (PLC)
A public limited company is a limited company whose shares can be

bought and sold by the public and other firms. A public limited
company is different from a private limited company as its shares can
be bought and sold by the public. To become a PLC a firm must have a
minimum of £50,000 share capital. Most PLC’S have a much bigger
share capital totalling millions of pounds. All the shareholders have
limited liability over the business. So if the business is going into debt
the money invested into the business by its shareholders us used to
keep the business running.
Advantage
The amount of capital for expansion and development is increased

rapidly because there are thousands of shareholders. So if the
company is successful the value of the shares increases. Therefore this
increases the overall value of the company. Additional finance can be
raised in several ways. The company can borrow from a range of
financial institution, issue additional shares or ask for special loans,
called debentures. A PLC has limited liability. So all the shareholders
have the protection of limited liability and can lose only the amount
they have invested no matter how much money is owed. Limited
liability is limiting the financial liability of shareholders to the money
they have invested.
Disadvantage
A public limited company is registered with the Registrar of Companies

and must comply with many external regulations. The shareholders
expect to receive a dividend in return for their investment and will also

want the shares to increase in value. If the company is in difficulties

and share values fall, then many shareholders may sell their shares,
which will lower the price further. This can make the company
vulnerable to a take over bid.
The shareholders often have different aims from the directors. The
shareholders want quick results so that the share value increases,
whereas the directors may be looking at the long term prospects of the
company. Most of the share holders in a PLC are institutional investors
who hold large blocks of shares and can easily outvote smaller
shareholders. The original owners of the company will lose much of
their control over the company, even if they retain some shares.
Tesco is a Public Limited Company. Below I will write about the

advantages and disadvantages of Tesco being a Public Limited
Company.
Advantage
As the company Tesco is very large, it needs a lot of managers to take

control over it. The managers need to look after all the stores over the
world so it doesn’t go bankrupt, and also the mangers set targets for
each store so it performs well. Tesco have four different types of
stores in the UK. They are:
Tesco
Tesco is the main type of shop as it has 277 large and 81 compact
Superstores around the UK, as well as 224 other supermarkets. Many
trade 24 hours a day and all have a sharp customer focus. It offers a
large food range, and many have great non food ranges as well.
Superstores tend to be large and on the edge of town, with free
parking and facilities that include cafes and petrol stations.

Tesco Extra
Tesco Extra is a larger version of Tesco as it sells a wide range of food

and non food products. It focuses on breadth rather than depth in non
food, all under one roof. It is very successful in the UK and other
countries. Tesco plan to expand worldwide to 120 of these
hypermarket style operations, which concentrate, on a bigger non food
offering than superstores.
Tesco Express
Tesco Express is a convenience store serving local neighbourhoods. It
meets customer demand for longer trading hours and greater
convenience. Express stores are usually found at petrol stations and
are aimed at local customers who want a convenient place they can
trust when doing their shopping or replace home essential. Each Tesco
Express is a single unit of up to 3000 sq ft, stocking around 2800 lines,
including fresh and frozen food, a bakery and wines and spirits. The
stores are very busy and it’s a very fast moving, on a busy
environment.
Tesco Metro
Tesco Metro is a compact store located in busy areas. Metro is like a
smaller version of Tesco as it brings grocery shopping back to the high
street. It’s a modern day version of the convenience store which is
brought up to date as it offers customers a wide range of products.
There are an estimated 45 Metro stores, with more developments
planned.
If Tesco need more money to expand by building a new store or
refurbishing an existing store, they can get more money by selling
their shares to the public. Therefore it is easier for a PLC to raise easy
money by selling shares and is also there is less risk compared to a
sole trader.
Another benefit of Tesco being a PLC is that its owners are its
shareholders. So the amount of capital for expansion and development
is increased rapidly because there are thousands of shareholders. So if
the company is successful the value of the shares increases. Therefore
this increases the overall value of the company. Tesco’s shareholders
have limited liability so if the business is in debt they’re only liable up
to the value of their shares. So it is easier for a PLC to raise capital as
a PLC has less of a risk compared to a sole trader.
As Tesco is a PLC its owners are its shareholders, and they have
limited liability so they won’t have to pay any more money and still

carry out all the business activities if the business were in debt.
However a Sole trader is personally liable for all of the company’s
debt.
As Tesco is a PLC, they can find it easy to borrow money from banks
as they limited liability.
Disadvantage
Tesco is a PLC, so this means that there are many managers and
board of directors. If someone had an idea to improve Tesco’s sales
they would need to discuss this board of directors, as they have to
decide if the idea is going to take place before anything can happen.
Therefore a lot of decisions would be made before anything can
happen. So decision making is a disadvantage in a PLC such as Tesco
as it would take long time to decide on.
PLC’s do not have a strong communication links between their
shareholders and employees because they have a large organisation.
So this means that information has to travel through a certain amount
of people before getting to the owner. So if there was a complaint
from a Tesco store. The complaint should be reported to the owner. In
order to get the report to the owner, the complaint would go from the
employee, the manger of the store, the directors and finally to the
owner.
Another disadvantage for Tesco being a PLC is that it can take a long
time to set up. Also shares can continuously being bought, so in the
end the business could end up being taken over as shares can easily
be bought on the internet. Therefore PLC’s such as Tesco should keep
a record on how much shares are sold so the business is not
completely taken over.
A PLC can be very risky as the business needs to spend lots of money
before they actually receive income. So to protect the business they
can use insurance companies.
Public limited companies such as Tesco need to obey to certain rules

such as keeping their accounts in a certain way and it needs to be
audited and sent to the register of companies. Also the accounts must
be published annually.
Does the ownership suit the business?
The owners of Tesco have made an excellent decision in making Tesco

a public limited company (PLC), because they can make raise quick

and easy capital by selling more shares to the public. This gives Tesco
a chance to expand the business and most importantly to achieve their
aim of getting more customers to their store. It also gives Tesco a
chance to expand on their non-food products which can lead to more
sales. Tesco have located their stores in the middle of large populated
areas, where their customers are. A busy area is perfect for a PLC such
as Tesco as this will attract more customers to the store and also
people may be interested in buying their shares. Therefore Tesco will
be achieving their aims of gaining more customers as they have
located their store in the ideal environment. A PLC suits Tesco as they
can employ professionals to run each department through their
recruitment agency. Another benefit of Tesco being a PLC is because it
suits Tesco’s activity of being a retail sales store as they can gain
capital easily to buy large stores to display goods for customers to
buy.
Justification of ownership for Tesco
The reason for Tesco being a public limited company (PLC) is because
it is the easiest form of ownership in regards to their business and also
the most suitable. Tesco cannot be a sole trader because it will be
difficult for one person to run Tesco as because of the shier size of
company and a sole trader will not have enough money to start up the
business. They can’t be suitable for a partnership ownership as there
would be too many implications in decision making and also the
liability for each partner is a large amount which isn’t advisable as it
could ruin the business by lack of funds or lack of co-operation of the
partners. Finally Tesco couldn’t become a public sector run business as
public sectors aim not to make profits and the direct contrast is that
Tesco aim to make very large profits so there interests and aims
conflict to much for them to be run as public sector.
They could consider being run by a co-operative ownership as there

are already many co-operative super markets however Tesco would
just be on a larger scale however I believe the reason Tesco didn’t
choose to run there business like this is because the 3 types of co-
operatives don’t make much profit as Tesco potentially could as
working co-op’s there would be disagreement over many decisions this
is to risky, also retail and wholesale co-ops don’t get much profit as
they put the money back into the business to buy products and they
won’t be able to offer the full range of services that Tesco do. Market
co-op might be a good ownership for Tesco as they would make profits
and it can be used for different purposes e.g. expansion however the
bad point to this is separate business join so there could be
disagreements over decisions in regard to the business and also they
market new products in the business and if some fail and do not sell
they make losses and the reputation goes down which is not very
advisable for such a large business. So in conclusion Tesco being a PLC
is a very wise choice as they have limited liability there funds are
mostly generated by the public in return also act as customers to
Tesco and through this they have many opportunities to expand and
so the shareholders are very beneficial to the company. Tesco can
expand and continue to make money and have limited liability and at
the same time have a many customers and attractions to their
company by being a PLC so through all the ownerships this is the best
suited for Tesco as it will let them achieve high profits in a simpler
more efficient way.
Nokia is a Private Limited Company. Below I will write about the

advantages and disadvantages of Nokia being a Private Limited
Company.
Advantage
A private limited company such as Nokia’s financial liabilities are

limited to the amount of money put up by shareholders. So if the
business does not succeed, the shareholders would only lose the
money in which they had invested in the company. If the business had
large debts, the people who this money was owed to could not sue the
directors to get their money back. So the company’s assets would
have to be sold to raise the money to pay off the debts.
Also as Nokia is a private limited company, this means that they can
only sell their shares privately to other people. Therefore Nokia can
restrict the amount of shares sold so the business can not be taken
over by its stakeholders.
If they have good valuable shares they will achieve more shareholders.
At the end of the year they have to produce an account showing the
financial year and as Nokia is exceeding in terms of performance and
profit, others may be interested in Nokia and want to invest there
money into the business not only does Nokia have other shareholders
and sources of money this way there business gains a better
reputation.
Below is the document which Nokia show to their shareholders.

Another advantage of Nokia being a PLC is that the owners only have
limited liability as the shareholders have to pay back the rest however
they only pay the amount they put into the business. This is a safer
way of managing debts or financial problems Nokia come into instead
of one person having the cost it is shared around and if they want to
they can sell shares to cover costs.

Disadvantage
As Nokia is a private limited company, there will be many

disadvantages. Nokia will has to comply with rules set down by the
Companies Act, so proper audited accounts and annual returns have to
be registered with the Companies House. If this is not done, legal
action will be taken against Nokia and the company will be fined and
the directors may be prosecuted. Being a LTD is very expensive
because Nokia need to engage accountants to audit and prepare
accounts.
Starting up a private limited company is very expensive so this could

mean the owner will not have a lot of money to spend on the business
once set up. Therefore the owner will need a lot of money while
running the business.
A PLC business such as Tesco will be able to sell their shares on the
stock market. However private limited companies such as Nokia are
forbidden to sell their shares on the stock market. This would mean
that it would be very hard to find someone to sell the business to.
Does the ownership suit the business?
Nokia has chosen the right type of ownership by being a private

limited company. As Nokia is LTD Company, this means the business
does not have to pay as much tax compare to a partnership or a sole
trader. Another benefit of Nokia being a LTD company is because if the
business was to fail, the Nokia owner wouldn’t have to sell up or loose
as much money compared to a sole trader.
Justification for Nokia being a PLC
Nokia is a very large business that has many sectors and many
placements of their business and so it needs to be split up and
managed bit by bit by certain people so it being a sole trader would be
impossible as they wouldn’t be able to handle the responsibility of the
company and also the liability for them would be far to great.

Nokia could go into partnership but yet again like Tesco they are faced
with the problem that there are too many decisions that have to be
made by partners and this will result in disagreement over things and
it will result in failure of the business or decrease in profits due to lack
of co-operation and other factors like partners leaving the company.
If Nokia went into the ownership of Public sector they would have their
profit margin reduced enormously as they are funded by government
and so they won’t have the option of expanding when they want to
and introducing new products. Also the biggest factor would be that
Public sectors don’t aim to make much profit and just like Tesco, Nokia
has the same aim as they want the money to invest and expand so
this ownership isn’t suitable.
If Nokia wanted to become a Co-operative business they would be

faced with the problem of them not having much control over their
business as the people that worked in it would own it and run it, the
other major problem is that business market their products and this
could ruin Nokia as there products may not be marketed and
researched properly and extensively enough for them to be sold. If for
instance they became a retail and wholesaler there isn’t much profit to
be made their either. What Nokia would need is a ownership that is
suitable to their business and lets them control the business but also
make profit for them and have possible shareholders for a source of
finance and so that is why Public Limited Company is very efficient for
Nokia to run their business as it suits their needs well and is efficient
for them. They could become a Private Limited Company if they
wanted however the major downfall to this is that the owner is liable
personally for the business and so it is risky a if the business if the
business gets into trouble and the owner is left liable it would be very
hard for them to try and re gain control of the situation and start up
again.
Location of a business

Location of a business is very important as that can be a factor on how

well the business is running. Ideally, the location will keep costs to a
minimum while helping to generate maximum revenue, while the
overall aim is to be successful. As there are different types of
businesses, this means that each business must be located in different
places where their business is well suited.
The types of businesses are:
Primary
Secondary
Tertiary
Primary Business
This is when getting raw material such as oil, fish or coal from the land
or sea.
Secondary Business
Processing raw materials into finished goods.
Tertiary Business
This is when providing a service to any branch of industry or direct to

a consumer. This includes distributing and transporting goods.
As you could see from the

pie chart, the primary
production has decreased
between 1982 – 2002.
Also there is a rapid
increase of tertiary
production. Therefore if
the primary production
decreases the will be a
shortage of raw materials.
Many factors may effect where a business is placed. These are some
factors which could influence where a business is located:

Skilled workers
Cost of labour
Financial help
Cost of premises
Transport Links
Government
Suppliers
History
Sales technique
Competitors
Customers
These factors can influence a business’s choice of location. Also some

factors may conflict with each other. For example, it is impossible to
locate near to both suppliers and customers if supplies come from
Scotland and customers are in London.
Skilled workers
Skilled workers are those who are experts in a particular trade, such
as electronics. Businesses need to locate an area where there is low
unemployment as this gives the business a chance of employing more
workers, or where there are people with high skills in the labour force.
Also if there are employees who have worked in the same type of
business and are experienced, so this means that the business would
not need to send them away for training.
Cost of labour
The cost of labour is influenced by the number of available workers in

an area and by the type of skills required. Where labour is limited, the
cost is likely to be higher. This is why businesses prefer to locate
where they are likely to have large numbers of suitable applicants for
every job. It is also the reason why wage rates are normally lower in
areas with high unemployment and higher in cities, where demand for
workers is greater. So a business such as Tesco would like to move to
places where labour costs are low.
Financial help

Financial help is available for many businesses but the amount

available and the source at local, national or European level will vary,
depending on the location.
Local help is available from the economics development departments

of many local authorities who provide assistance packages for
business. These may include:
Job creation grants

Financial assistance
Rent free periods
Help with finding business premises
The type and amount of financial assistance will depend upon the
business proposal and the proposed location.
Business Link organisations operate in many areas of Britain, offering

both support and advice to small and medium sized companies. They
can advise, for instance, on the cost of similar premises in an area.
The government offers financial assistance to companies in areas of

greatest need. This is treated at promoting business opportunities and
is promoting business opportunities and is promoted by the nine
regional agencies in England. The schemes are:
Regional selective assistance

Regional enterprise grants
Enterprise zones
Single regeneration budget
Regional selective assistance
For business projects costing more than £500,000. The amount of the
grant varies, depending upon the number of jobs likely to be created
or protected.
Regional enterprise grants
This is for small and medium sized companies who are employing
under 250 employees with investment projects under £50,000.
Enterprise Zones

This is where companies gain specific tax benefits, such as paying no

business rates and obtaining rent free periods.
Single regeneration budget
This is a scheme which will improve employment prospects and help

the growth of local economies.
Cost of premises
The cost of premises is determined by demand and supply. In retail

shops, it is also influenced by location. A busy area which attracts lots
of customers are in greater demand, which again affects the price. So
the greater the number of available premises, or the quieter the area
will mean lower costs. This is why offices and shops in large cities pay
very high rent, as the mainly locate on a main road. Premises on
secondary roads are cheaper, towns are cheaper than cities and
industrial sites on the edge of town are the cheapest of them all. The
area in which the premise is located could also influence the price of
the premises. So in a developed area with good transport links and
good facilities, the cost of the premises would be higher compared to a
less developed area.
Transport Links
Improved transport has given businesses a much greater choice of

location. Over 80% of goods are delivered by road. Motorways make it
easy to deliver raw material. So businesses would want a good
transport where their suppliers can get to easily, and also this way
they can easily restock when lorries come in and out every day. So
nearness to motorways is therefore one of the most important factors
in choosing a location. Also good transport links would make it easier
for employees to travel to and from the business. Therefore if there
was a train station near to the premises the price of the premises
would be higher as the area has good transport links.
Government
The government can influence where a business place their stores as

they might instruct them to place them in large unemployed areas.
These are called enterprise zones. This is paid to the local authority as
the business’s contribution towards local services such as road repairs,
refuse collection and improvement to the area. A business such as
Tesco would need large amount of land need planning permission from
the local authority.
Suppliers
The supplier can be a very important to a business as that is where

they get their stock from. So a business needs to locate themselves
near to its suppliers so when they need a certain product, it would be
easier to restock. If the supplier is far away it would take longer and
the costs will rise.
History
Some industries are traditionally associated with an area. Historically,

the location would have been chosen for geographical reasons, either
because certain raw materials were available locally or because local
climatic conditions were just right. For example. Paper manufactures
locate near water, because water is an essential ingredient in paper
production.
Another example is Lincolnshire. Lincolnshire, for instance, is

renowned for horticultural businesses because the land is fertile and
the climate is good. It is also near ports such as Felixstowe where
flowers and bulbs are imported from the Continent. Even though the
conditions for cultivating plants can not be simulated in greenhouses
across the country, Lincolnshire remains a major horticultural centre.
Another reason for industries remaining in a particular area is because

they may benefit from working near similar organisations. Specialist
labour will be cheaper. They would build up associations and
supportive links. Local colleges and universities may run courses which
relate to the needs of the industry.
Sales technique
This is the way in which companies interact with their customers also
affects their location. A company which does its business mainly using
ICT or even traditional mail services can locate almost anywhere.
Call centres are used by business organisation such as banks,

insurance companies and also retailers such as Tesco to process
enquiries and transactions. Some businesses also have their call
centres located in different countries as this reduces costs.
Internet selling is another example where location may be less critical.

A company selling CDs, books or computers over the internet will still

need good transport links and skilled staff but, apart from that, it can
choose the region in which it wants to locate.
Competitors
Many businesses are attracted to site their operations close to their

main competitors. In some instances, this might be because the labour
supply in that area has the necessary skills. Other reasons may be
because that is where the market is located. Sometimes businesses
may wish to share knowledge or even research projects. Competitors
can make the other business grow weaker and maybe close down in
that area bringing in more custom to the business.
Customers
Customers are an important factor in a location. Different types of

businesses are located in different types of areas. Businesses such as
garden centres and petrol stations are mainly found on main roads.
Doctors and dentists locate within a community and small shops are to
be found on housing estates and in other populated areas. Also
retailers tend to group together in a town centre area or local market.
The customers can affect the business because businesses need to be
in a place where their customers can access the business easily.
Tesco Location
Tesco is a large tertiary business so they will want to locate their store
in a highly populate area near to its customers. This way they have a
better chance of increasing their revenue as there are more customers
nearby. The location of Tesco is also important because they need to
transfer its goods with its delivery service, therefore if the customers
lived too far away then the food might deteriorate during the distance.
Tesco’s in Gallions Reach
Gallions Reach has recently been developed. Gallions Reach shopping

park is near to the M25 and also offers the customers of East London
the safety and convenience that no town centre can match. There area
is very spacious and has over 2000 parking spaces for customers.
Tesco is located jus out of the main town centre, therefore this allows
easy road access for lorries to come and deliver their stock. The store
also has good transport links as it has two major motorways near by
(M25 and M11 Junction 4). It also has a tube station near by which is
Gallions Reach and also has a Railway station near by which is North

Woolwich railway station. So this allows the customers to travel to and

from Tesco conveniently therefore this can attract more customers.
As Tesco has recently been opened there will be many job

opportunities for the public. Also as this is Tesco Extra, Tesco will need
to recruit a lot of people to work their. Tesco has recently been
refurbished and now it is bigger and better. The shop has had
a mezzanine level built in, which contains a huge variety of electronic
goods and clothing. This may attract more customers as Tesco now
sell a wide variety of goods. The labour costs in Beckton may be
average as Beckton is gradually being developed; therefore this is a
good place to locate their store.
Tesco has different stores all over the world. Each different store is
different and has a different purpose, and is located in different places.
Tesco has to make sure that stores are spread out they attract new
customers not share them.
Tesco has four different types of stores and each one is located in
different areas:
Tesco
Tesco Extra
Tesco Express
Tesco Metro

Tesco
Tesco is the main store and is mainly found just outside main town
centres, as lorries need to have easy access to the stores as the lorries
will be coming very often. This type of Tesco store is known as a
superstore as they sell all the main food, clothing, electronics etc.
They have a big car park for their customers. These Tesco shops affect
the community by offering lots of jobs to unemployed people, while
they take up a lot of land. The government will influence Tesco to be
placed within enterprise zones. Tesco stores have a petrol pump where
car users use every day therefore they must have clear roads or the
roads would be congested. Tesco would be the most busy compared to
Tesco extra, Tesco metro and Tesco express as Tesco is located just
outside the town therefore it would be easy for their customers to get
to.
Tesco Express
Tesco Express is a smaller version of Tesco. It is open for customers to

pop in and by bits and bobs, and would be located by busy petrol
stations or in small towns. Tesco Express sticks items, which
customers may run out of during the week such as bread and milk.
Therefore Tesco Express is located in an area which is in walking
distance from houses and easy to access. While they need to have
clear road access for lorries which are transporting goods to the shop.
As Tesco Express is smaller than Tesco, it does not need many
workers so they can’t really help the community by offering lots of

jobs. Therefore Tesco Express is similar to a corner shop but Tesco

Express has a better product range than a corner shop.
Tesco Metro
Tesco metro is a modern day grocery shop and is found on high

streets where lots of people may be shopping. These stores also have
to be easy accessible to customers to get into. However it would be
difficult for lorries to access the store. Even thought the costs of the
premises are high in these areas, but is essential they are placed there
because the area is relatively busy. The store should also be located in
a busy area. AS you could see in the map below, Tesco Metro is
located in central London which is very busy. There are many offices
nearby therefore workers may pop into Tesco Metro to get lunch
therefore the store should be in walking distance from offices. Tesco
metro store is small so they don’t offer many jobs within enterprise
zones.

Tesco Extra
Tesco Extra is similar to Tesco but it is larger and better and it has a
wide variety of products. They are normally found in large towns as
they offer a wide range of food and non food items. They need to be
easy to access for lorries as the stores will need to restock regularly.
Tesco Extra would be great for large families as Tesco Extra has a wide
range of products to choose from. The government will influence these
stores as they can offer many jobs within enterprise zones.

Nokia location
Nokia usually send out their items to their separate stores they don’t
sell things from their company they sell it through branches such as
carphone warehouse and phones 4 u. They need people near by for
recruiting purposes and also to promote their company and it be good
to host local events. Below is an example of a store which Nokia
supply their phones to.
East Ham (Station Pa)

1 East Ham
2/3 Station Parade
Barking (Focal House)

2 Barking
12 Focal House Station Parade
Ilford (High Rd)

3 Ilford
100 High Road
Stratford (The Mall)

4 Stratford
81 The Mall
Stratford (The Broadway)

5 Stratford
34 The Broadway, Stratford
Beckton (Gallions Reach) This is 10 examples of

6 Beckton
Gallions Reach Carphone Wharehouse
Beckton (Gallions Reach) stores where Nokia supply
7 Beckton
Unit 20 Gallions Reach phones to.
Gants Hill (Eastern Ave)
8 Ilford
353 Eastern Avenue
Woolwich (Powis St)

9 Woolwich
Unit 2, 88-104 Powis Street
Charlton (Peninsular Pk)

10 Charlton
Peninsular Park, Bugsby's Way

Below is an example of a Phones 4 U store where Nokia supply their

phones to.
London - East Ham Ilford

119 High Street 164 High Road
North Ilford
East Ham IG1 1DG
0208 5532109
E6 1HZ
020 8586 9286
Barking
Unit 4, Vicarage London - Woolwich
Fields 36 Powis Street
Barking Woolwich
This is 5 examples of
Essex SE18 6LQ Phones 4 U stores where
IG11 8DG 0208 316 2638 Nokia supply phones to.
020 8594 8102
Stratford - Essex
85, The Mall
Stratford
Essex
E15 1NG
020 8534 8242

Nokia would have chosen this location as they have many main roads
around them which they need the most for transporting goods and
receiving materials. They don’t need their customers to be near to
them as they ship out their good to shops or transport them to other
retailers. They have got residents close to their business as they can
be used as recruiting purposes or even as shareholders for the
business and also if Nokia hold events it could boost their promotion
and so they will attract customers to their products if their business
seems reputable. Nokia can achieve this all through their good location
as they have strong transport links and also communities near them. A
reason that Tesco may have picked to locate here is that the premises
would have been cheap as it isn’t in a tourist or business so there
wouldn’t be much government tax either. They will have to pay a lot of
money for disposal of there rubbish and waste as it has to be
transported a distance before it can be disposed off.
Nokia also have their own branch in the UK. Below is their location.

Business Activity
Business activity refers to the operations carried out by a particular

organisation – the type of goods it produces, the services it offers,
whether it provides only goods or only service, or both. Businesses
carry out many activities, some produce goods such as cars and
furniture. Others offer services such as hairdressing and plumbing. All
businesses can be put into groups providing what they do or sell. For
example supermarkets such as Tesco, sell goods but they do not
produce the goods, so they just place the goods on shelves for people
to buy. Also Tesco’s own brand is produced by other businesses and
then put on the Tesco shelves for people to buy. Therefore Tesco is a
service of retailing.
Main types of activity
Producing raw goods
Manufacturing of goods
Sales of goods
Client of goods
Client services
Other services

Main types of business activity
The flow chart

gives examples
of the business
activity
Sales of goods
This involves the selling of a good or service to a consumer, usually at

a shop or some other outlet.
Supermarkets
Most supermarkets have moved into becoming superstores. For

example Tesco has expanded their normal store to Tesco Extra.
Therefore these bigger stores have a wider product range and with
bigger car parks alongside.

Specialist retailers
Most high streets have a wide range of specialist retailers, with many
being part of a multiple organisation.
Restaurants
opticians
bakers
travel agents
estate agent
banks
These probably make up the biggest proportion of retailers on the high

street.
Internet sales
Most high street shops set up sales link through their own website on
the internet. Supermarkets such as Tesco also sell their goods through
the internet.
Mail order
Mail order businesses are the ones most likely to suffer from the new
in use of the internet for purchasing goods and services, although
there is no obvious downward trend.
Cash and carry
Cash and carry wholesalers seemed to be a growth area for the sale of
goods. These large warehouse organisations still exist and help to
supply small retailers, but the growth in size of most types of retail
business has limited their progress. Wholesale businesses such as
Costco and Makro continue to operate by breaking down bulk
purchases from the manufacture into smaller quantities for sale both
to retailers and directly to consumers.

Tesco’s Activities
Tesco’s main activity is retail sales. This is when selling goods directly
to the public. One of the main activities of a business is to make profit.
Therefore Tesco’s main aim would be to make profit to provide a
satisfactory return for its shareholders, as its shareholders would want
to a share from the profit made. As there are a lot of supermarkets,
there would be a lot of competition against each other. Therefore
Tesco should provide an excellent standard of customer service and
offer a wide range of goods and services to satisfy the customer’s
needs. This is an attempt to gain more customers as Tesco are selling
a wide range of products and it can increase Tesco’s market share.
Tesco’s location plays a massive role of the business because Tesco

has to be located in a place within all its customers. However if it is
not located in a good area it would be less likely for the business to
succeed.
As Tesco have expanded, they have started to provide more services

to their customers.
Tesco provide six different types of financial services:
insurance (includes, car, home, travel, pet, health and life)
credit cards
loans
mortgages
savings
travel

Car Insurance
Tesco insist they provide great offer for car insurance which won’t put
a dent in your wallet. Tesco say their insurance quote is up to £150
cheaper than other leading insurers. Tesco advertise their motor
insurance offers on the internet and on leaflets in store. Tesco also
have a separate website for their financial services.
http://www.tescofinance.com/personal/finance/home.jsp
Tesco provide two types of car insurance.
Tesco car insurance. This insurance cover is full cover therefore

it would be more expensive than the Tesco value insurance as it
is full cover.
Value insurance
Tesco try to flatter the public by using key information to get the
public interested. They say:

Get a 10% discount online
10% multi-car discount if someone in your home is already

insured with us
Up to 50% discount for our named drivers when they take out a
policy of their own with us
Tesco also let customers get an insurance quote online therefore their
customers will save time.
Home insurance
Tesco say they will give the customers great value for your building
and contents insurance. You can chose if you want just your building
covered or both the building and its condense. Tesco also say you can
claim up to £25 if your current mortgage lender charges you for
switching insurers. Tesco also have 24 hour household emergency
helpline so they can get a tradesman to their customers urgently. All
their repairmen are vetted by Tesco for the customer’s peace of mind.
Tesco also say they give 30% discount in your first year when you buy
over the phone OR 35% discount in your first year when you buy
online.
Credit card
Tesco gives you 0% balance transfer for 12months. 0% on Tesco
purchases for 12 months. Also 0% on non Tesco purchases for 3
months. They also offer club card points when using the Tesco credit
card. They provide three types of credit card:
Clubcard Credit card
Bonus Credit card

Business Credit card
Pet insurance
Tesco provides experienced and understanding claims advisors to help

you through your claim. They also have vet emergency helpline to give
out to anyone in emergency, or if a pet has died they have an
alternate helpline for advice and support for the owner’s loss.
Life insurance
Tesco say that life insurance with them is one of the most affordable
forms of cover. Fixed term life insurance provides a fixed cash sum
payment if you die during the period of cover. Life cover with critical
illness gives a one-off cash sum payment, if you're either diagnosed
with a critical illness that meets our policy definitions, or you die.
Travel insurance
Tesco say that to get travel insurance with them is very easy. In this
offer Tesco say they can save you up to 50% compared to other travel
agents. Tesco also provide a helpline for legal advice, emergency
travel, and medical assistance.

Savings
Tesco provide instant access and a minimum opening balance of just

£1. Tesco provide three types of saving accounts.
Tesco also offer a great range and price on mobile phones. They have
pay as you go mobile phones and also contract mobile phones. Tesco
also say they can save you at least 50% on calls because we charge
you a low rate of just 10p a minute. This will help attract more
customers and also increase the income into the business.
Tesco also have great internet offers to the public. They say whether
you’re a constant web surfer, a regular internet shopper or just like to
keep in touch with your friends by e-mail, we’ve an internet access
package that will fit your needs perfectly. So they have different
packages to suit people’s needs.
All these services are great for the public to use, as they are cheap
and useful for people who haven’t got a lot of money. Also their
services are easy to use and set up and Tesco also provide after sales
service on all their products and services.
Functional Areas

All businesses need to be well organised to achieve their aims and

objectives. Certain tasks, or functions, must be done regularly and
these are usually grouped into specific types of activities. Each person
is then responsible for a particular area of work. For example, in a
supermarket some staff work as checkout operators, others fill
shelves, and so on. If all the key functions are not carried out, the
business will not operate efficiently.
In a large organisation, people work together in functional areas.

These areas undertake key functions which must be carried out within
the business. Each has a specific purpose.
Functional area Function

Finance To raise enough finance to be able to

afford to carry out the business. To cost
and price the produce.
Marketing and sales To find out if there is a market for the

product. To let people know that the
product is available. To persuade people
to but the product.
Human resources To ensure that labour, as a factor, is

available, trained and capable of doing
the jobs required.
Operations To carry out the manufacturing

processing or other procedure.
Customer Services To deliver the product to the identified

market. Making sure that customers are
happy with their purchase, and with the
service.
Administration To keep all the financial and other

records. To communicate decisions within
the business and to people outside the
business.
Human Resource
The human resource department is the part of the business, which

helps to find the right type of people for the jobs they have to offer
and look after the staff’s personal needs. It mainly relates to the
people who work for the organisation. The department is linked to all
other parts of the organisation because it needs to know which jobs
need filling and which employees need to be dismissed. However when
doing this, the human resource department must obey certain laws
which are created by the government. The workers in the human
resource department should have two important skills and they are
psychology and sociology because the employee can predict how
certain other employees will act in different situations as this is very
important in the department. The department has the important the
important role of encouraging employees to work harder and better.
The human resource department can make a huge impact on the
business as it plays a key role in a business such as Tesco. By having a
good human resource department, Tesco would be able to reach its
aim of making sure all employees are satisfied with their job so the
working environment would be less tense and the employees will work
better.

Activities of the human resource departments
Recruiting, keeping and dismissing employees
Human resources aim to attract and retain high quality staff. However,
if staff have to be dismissed, human resources must take certain that
this is done legally as there are many laws which relate to employing
and dismissing staff. A major task of the human resources department
is to ensure that the business has the right employees for future
success. In order to be successful, they may involve a number of
activities such as:
Recruiting new employees
Keeping existing employees
Dismissing employees
Recruiting new employees

The human resource department is in charge of recruitment. This is

when the department hires people from outside the firm or promotes
people from within. Firms like to recruit from outside the firm as new
employees sometimes bring with them fresh ideas and enthusiasm. In
order to recruit the right person for the job, they have an 8 point
method:
Identify the vacancy
Drawing up a job description
Drawing up a person specification
Advertising the vacancy
Drawing up a shortlist
Interviewing applicants
Selecting the most suitable candidate
Retention
Firms such as Tesco would not want to lose experienced and highly
trained staff. Recruiting new workers and training them to the required
level can be a very expensive process. Human resources staff are
often responsible for checking and analysing staff turnover the rate at
which people leave the organisation. Reasons for leaving may be
unconnected with the workplace, such as someone moving to another
part of the country. However, if many people are leaving because they
are dissatisfied or because there are no promotion prospects, then this
will be investigated, particularly if too many good staff are leaving.
People are more likely to stay in an organisation of they are interested

and happy in their work and have the opportunity for promotion. To
help retain staff, businesses such as Tesco usually provide the
following:
An induction programme to help new staff settle in quickly. The

new employee spends a shirt time learning about the business,
touring the premises and meeting colleagues.
Fair and competitive terms and conditions of employment. This

means that staff are paid rate for the job; holiday entitlement

and sick pay are reasonable and similar to those offered by other
employers.
Good working conditions
An opportunity for employees to talk regularly to their manger

about their performance and future prospects. These are often
called appraisal interviews.
Dismissing employees
This occurs when an employee cannot carry out his or her job
effectively. It is when an employee is sacked and told to leave their
job. When an employee gets sacked they usually have to fill out a
notice, which ends their contract with the business. Sometimes
dismissed employees are given their months wage early before they
leave. This is called payment in lieu of notice. Employees are normally
dismissed with notice, with notice if they were good at their job.
Employees can be judged as bad at their job if they are usually late, or
their attendance is low. They could also be dismissed if their attitude
to their work or behaviour very bad.
Redundancy
This is when an employee is no longer needed in their job. Therefore

the employee will have to leave the job they were currently doing. This
might happen when a company closes down a shop or factory. An
example is the car manufacture rover which has shut down their
factory at Longbridge and made its entire staff redundant. An
employee could be made redundant when a computer or machine
takes over their job. Instead of making people redundant a business
can offer the employee a similar job in the business. When an
employee leaves a business through redundancy they can be given
redundancy pay.
Working Conditions
The human resource department is also in charge of the general

working conditions within the business. Working conditions relate to:
The warmth and cleanliness of the workplace
The provision of rest areas and leisure facilities

Hours of work and holiday entitlement
Physical environment – lighting and ventilation, furnishings and

equipment, heating, space available, level of noise
Job content
Promotion prospects within the organisation
Training opportunities
Welfare policies, such as loans to employees, stress counselling

and medical checks.
Working conditions have an impact on how well workers carry out their
jobs. They are normally a subject for negotiation between trade unions
and the human resources department.
Training, development and promoting employees
The human resource department is responsible for making sure their

employees have the right type of training for the job they are doing
and give everyone a chance. Most employees want to continue to
develop their skills and ability after they have started work. This helps
them to apply for jobs with more responsibility and better pay. The
department looks at all the employee’s qualifications to see where
their week spots are and how they can improve their different skills. It
is important for the department to choose the right employee to send
away for training as it costs a lot of money. Usually staff are eligible
for promotion only if they can prove they have done well in their
current job, kept up to date with technology and have continued to
develop themselves. Training relates to specific opportunities to learn
a new skill or extend previous skills or knowledge. It may be
undertaken at work or elsewhere such as at a college or specialist
training centre.
A large organisation such as Tesco may have its own training facilities
and run many of its own training courses and events. Its human
resources department may have a training officer or even a separate
training section.
All humans resources departments will be involved in keeping staff

procedures for applying for training and monitoring the training
budget, that is the amount of money allocated for training.

Development relates to the personal development of the personal

which is not the same as learning new skills.
Most companies expect their employees to take an active role in their

own training and self-development. There is usually an opportunity for
staff to discuss this with their manager during their appraisal
interview.
Many companies such as Tesco will pay for staff development activities
and may run them in the workplace. These include activities such as
how to work effectively in a team, time management to enable staff to
work more efficiently.
Employee organisations and unions
The human resources department discusses and agrees pay and

working conditions with trade unions or other representatives of the
workforce. Trade unions are organisations of employees or employers
formed to achieve the aims of all employees or employers. Employee
organisations are run by experienced staff, normally from a range of
different jobs in the organisation. In some cases, employee
representatives are nominated and elected by staff themselves.
The employee organisation is consulted about major issues which may

affect staff such as business trends that will affect employment and
proposed future changes. The employee organisation work together to
find solutions to problems. There is also a greater atmosphere of trust
between staff and management, and employees are more likely to
accept the results of a decision in which they have been involved.
The main advantage is that employee associations give their opinions

to employees and can help to protect them in negotiating with
management. The disadvantage is that they may have little formal
power in an organisation and may consist of representatives who are
inexperience at negotiating and do not have any legal knowledge or
access to specialist advice.
A trade union is an association of employees formed to represent the

workers in an industry, especially on pay and conditions. It warns the
government on issues relating to workers in general – from health and
safety to working hours – and provides its unions with information and
advice to help them to advise their members.

Joining a trade union is voluntary and involves the payment of a

subscription or membership fee. The union individuals join depends on
the type of work they do and where they work. The largest union in
Britain is UNISON, which represents public sector employees, with
over 1.2 million members.
Union representatives take part in a range of activities. They negotiate

pay rates and pay rises for staff with management and recommend
improvements at work. They are also involved in health and safety
issues and improvements in the workplace. They take part in any
discussions relating to redundancy to ensure a fair policy. They give
advice and support to individual employees involved in a dispute at
work and accompany them to any disciplinary or grievance interviews.
They give advice about work based training. They also provide advice
and information on employee’s legal rights; industrial benefits if an
employee is involved in an accident: and financial services, such as
insurance and personal loans.
Health and safety
The human resource department is responsible for making sure that all
the employees and the employer have to abide by the Health and
Safety at Work Act and the various regulations which have followed
this Act. Under the law, the responsibility for safety is that of each line
manager and, ultimately, the chief executive or head of the
organisation.
Large organisations such as Tesco have a health and safety officer who
has overall responsibilities for health and safety policies and training.
In others, there may also be a safety committee, made up of
representatives from management and employees. This group is
responsible for checking that legal requirements have been met. Tesco
would also have safety representatives who attend meeting of the
safety committee. They provide risk assessments and set up Health
and safety rules. If an accident at work takes place, it is recorded
down in an accident book. The rules advise all employees to make sure
any hazardous things are clearly noted with clear signs.
Tesco’s Human Resources department

Tesco advertise a lot of staff vacancies in local and national

newspapers to attract staff. Tesco also have an informational desk in
store, which contains many leaflets on what jobs are available in Tesco
and what skills are needed. It also gives a brief description of all the
different Tesco stores. If the customer is interested in the Tesco job,
they could get an application form from the customer services and also
they will need to attach their CV.
From the application form, Tesco wants to find out as much as they
can bout their future employees to see if they hold the right attitude to
become a member of the `Tesco family` and help achieve their aim of
gaining customer loyalty.
Later on in the process, Tesco will invite the person to have an

interview with the manager of the store, who will then decide whether
or not they will be selected. Tesco has also started a programme called
talent spotting, which is a new way of helping people develop their
careers. The employee will have a career discussion with their
manager to plan out their career progression.
The human resource department is also responsible for developing

staff by organising staff training. So this means that Tesco gets the
best of their staff, so they can reach their aim of providing a good
service to its customers. Tesco understands that every employee is
entitled to appropriate training to the job they are doing.
Tesco treat all their employees fairly and honestly. They have the right
to have a contract of employment, which is then stored within the
human resource department. Tesco will have strict procedures
regarding employee behaviour if an employee does something wrong,
so the human resource department will issue warnings which if ignored
may eventually lead to the person being sacked. The main method of
communication in a business such as Tesco would be by written or
verbal, so they must carry out the disciplinary procedure. Tesco always
make sure that there is no discrimination at work and that all laws are
taken seriously.
All employees in Tesco are given the right to have holidays and are
allowed breaks and lunch breaks. The human resource department has
also made sure that every employee gets fair wages for the job they
are doing. They have also made sure that the number of working
hours are not excessive. Also Tesco’s minimum age requirement of
getting a job is 16.

Tesco also understand that employees are allowed to join a trade

union if they wish to as it is within the national law.
Finance
The finance department keeps track of all the money being earned and
spent by the organisation and knows exactly how much profit or loss is
being made for each item or service sold. Businesses such as Tesco
may consider finance to be the most important functions of all, as a
firm such as Tesco will need to record a lot of profit and loss because
Tesco’s main way of making money is by selling items. Financial
information enables critical and rapid decisions to be made about the
business which can make the difference between financial success and
failure.
Businesses such as Tesco may control finances through a budget

system. The manager is allocated a budget which identifies panned
income and spending. The finance department regularly checks that
mangers are on target and investigates the situation if they are not.
A large organisation such as Tesco uses spreadsheets to analyse

income and expenditure. They use special accounting software and
management information systems – often known as MIS. Computer
software is better because they provide accurate and in-depth financial
information more quickly. This helps businesses to monitor and meet
their financial aims and objectives.
The finance function is very important for the staff because wages and
salaries are paid from this department. All employees have a legal
right to be paid and to receive an itemised pay statement.
Another responsibility of finance is to prepare the organisation’s

accounts, which is a legal requirement for most businesses. This is
because the Inland Revenue needs this figure to calculate how much
tax the owner must pay. Expenses must be accurately recorded as this
will reduce the amount of tax which is due. A business which is
registered for VAT also has to submit VAT returns regularly and on
time, otherwise the business is fined.
Activities of the finance department

Obtain capita
The finance department
Accounts
Record
Pays external
wages and
Finance clerks
so
Record
financ
Prepar
salaries to employe
financ transact
Preparing accounts Balanc
transact
Mayur Patel Exam No: 2272 Centre ID: 13216
Profit
Page 61
All businesses prepare accounts to summarise their financial affairs

during a year. Companies and large businesses such as Tesco are
legally obliged to publish detailed accounts. The most important parts
of these accounts are the balance sheet, which states both what a
business owns and its debt. Also the profit and loss account, which
records the profit or loss the business, made over a one year period.
This is very important for a business such as Tesco, so they can
compare their profit and loss account for each year and they could see
what years they have made the most profit and what years they have
made a loss. Therefore it gives Tesco a basic understanding of how
they’re doing. This is important because if Tesco were making a loss
every year, they still would not want to carry on because they are
making a loss so they may shut down the business.
Accounts are useful to different people for different reasons. The

Inland Revenue can confirm that the business has paid the correct
amount of tax. Suppliers would also want to see whether the business
is able to pay its debts. Shareholders can also decide whether or not to
invest in the business.
Many operations in the finance department are computerised. When

incoming or outgoing are entered, the accounts are entered, the
accounts are automatically adjusted. As money is banked the banking
records are automatically updated.
A public limited company such as Tesco will employ a financial

accountant to supervise this work and its accounts will be made public.
The main points may even be highlighted in the media.
Below is an example of Tesco’s five year financial summary.

UK GAAP IFRS
2004
2002 2003 53 2005 2005 2006
wks
Financial statistics
Group sales 25,401 28,280 33,557 37,070 36,957 43,137
Revenue excluding
VAT
UK 19,821 21,309 24,760 27,146 27,146 29,990
Rest of Europe 2,181 2,664 3,385 3,818 3,818 5,095
Asia 1,398 2,031 2,669 3,010 2,902 4,369
Total 23,400 26,004 30,814 33,974 33,866 39,454
Operating profit
UK 1,215 1,289 1,486 1,666 1,556 1,788
Rest of Europe 90 134 171 249 243 263
Asia 17 69 121 149 153 229
Total Group 1,322 1,492 1,778 2,064 1,952 2,280
Underlying profit - UK
1,221 1,401 1,708 2,029 NA NA
GAAP
New underlying profit –

NA NA NA NA 1,925 2,277
IFRS

Below is Nokia’s profit and loss accounts for 2003,2004 and 2005.

Below is Nokia’s Balance sheet

Profit and Sales
Tesco has been developing its sales every year therefore there profits
are increasing each year as well. Below is a table of Tesco’s sales
throughout the past 5 years. You could see the sales are increasing
each year.
Below is Tesco’s profit chart throughout the past five years. You could
see that each year the profit is increasing.

Paying wages and salaries
Wages and salaries involve the finance department in a number of

activities. The business has to deduct income tax and national
insurance from employees pay. Some businesses such as Tesco may
be required to operate a pension scheme for its employees. It will
need to keep very accurate records of wages and salaries.
This operation is mainly undertaken by computers, using a payroll

software package. Most organisations pay their staff monthly, by credit
transfer, whereby the money is transferred from an organisation’s
bank account to the employee’s bank account.
Payroll records are kept for each employee. These show how much
each person earned as basic salary and in overtime or bonus
payments, how much tax and national insurance is deducted and the
net amount which must be paid to the person.
If temporary staff are employed, then individual records must be

created for them for the duration of their employment.
Once the entries have been made, the payroll staff must check them
carefully before sending the instructions to the bank, to ensure there
are no errors. They also need to ensure that each employee will
receive an itemised pay slip showing all the current payments and
deductions and giving a running total for that tax year.
Finally, at the end of each tax year which April 5th, the payroll staff
must produce end of year payroll summaries for the Inland Revenue
and issue P60s, which detail the year’s earning and tax paid, to all
staff.
Obtaining capital and resources
All businesses need some resources in order to start up and to trade

successfully. To purchase these resources businesses night need to
raise large sums of money, known as capital. This buys all the

essential requirements, such as paying for a lease or buying premises,

purchasing a company vehicle, buying stock and other equipment.
When a company is trading and, making profit, then some of this

money will be kept in reserves to finance future developments. But
there may not be enough in the reserve account to pay for the
improvements or expansion required. So the company may need to
borrow the extra money or to raise it in some other way. The sources
of funds will depend mainly on:
The type of organisation, its size and previous history.
The type of development being considered
The amount of money required
A company will want to borrow money at the cheapest rate possible.

This means they want low interest rates and good repayments terms.
The length of time over which the money should be repaid is important
and that decision may depend upon current interest rates.
A business has two main sources of capital:
Loan capital. This is raised by borrowing money from a bank.
Retained profits. If the business has been profitable, it may be able

to keep some of theses profits to purchase the resources that it needs.
Companies such as Tesco could sell shares in the business to raise

more capital. This is when shareholders buy these shares and give
money to the business in exchange for owning a part of it.
Tesco’s Finance
A large superstore such as Tesco needs to be in control in all its

finance, as this is very important in Tesco because money will be
involved regularly. Tesco have business analyst in each area. Tesco’s
business analyst in the non food finance supports the commercial
home entertainment team which covers, mobiles, Tvs, CDs etc. The
business analyst has to identify all the risks at stake when introducing
all these new products and forecast a budget. Tesco have 6 finance
teams in their departments and they are broken down into, three
specialists department which include (tax, treasury and audit) and
three general department. The finance department also helps Tesco

set budgets and helps it know how to reach its aims of expanding or
how to bring in new non-food products to gain more of a non-food
market. From Tesco’s steering wheel objectives their finance
objectives are:
So it is important Tesco stick to their objectives in order to succeed.

The three general departments:
Business support- this is when they develop targets for the

business to make sure that the business is always trying to
reach its aims. The business support team also make cost
benefit analysis and monitors performances of the staff in each
store.
Financial reporting- the financial reporting department provides

management information to monitor the business. It forecasts
the business weekly / monthly financial results. As you could see
earlier on in the CW, I have showed an example of Tesco’s
financial document.
Financial service centre – in the financial service centre the team

make sure all the employees in Tesco are being paid their
wages. Their wages must be correct as they send over £1 billion
a month to process about 1 million people.
The three specialist department are:
Treasury management – the treasury management team is

responsible for funding, cash management, group structuring,
managing financial risks and purchasing financial services. There
aim is to minimise the cost of funding the business through
providing the highest financial expertise.

Audit – The auditing team makes sure that all the operations of
the management and financial controls and sufficient and that
the business is protected against risk.
Taxation – As Tesco is a business, they will need to pay tax in all

the areas where their stores. So the Tesco tax department
ensures that all tax are paid for.
Administration and IT support
The administration department provides important support services to

other departments in the business. Not all administration departments
in the business are the same. In a small business, the administration
department might take responsibility for human resources or finance.
But in a large organisation, it is likely to be more specialised and to
have responsibilities. All administration departments use IT in the
department. The administration and ICT staff are responsible for the
following key areas:

Clerical Work
The main role of an administration department is clerical. The

department provides clerical services to all other departments within
the business. Some are routine, such as opening the mail, ordering
stationery, preparing and filling documents; other tasks also need
doing such as answering the phone, assisting callers, responding to
urgent emails or faxes, and so on. Administration as a function is
invaluable to both staff and customers. Key duties undertaken by
administration staff include the following:
Collecting and distributing mail
Keeping records
Organising meetings
Responding to enquiries
Collecting and distributing mail
Opening, sorting and correctly distributing the mail promptly around a

large company such as Tesco is very important. The administrative
staff are responsible for ensuring that all incoming mail is processed
and passed to the correct person as soon as possible.
Outgoing mail items must be collected and processed towards the end
of the day. This includes routine documents and parcels, some of
which may be urgent or need sending abroad. Very urgent items may
also be sent by courier. Within any business they will receive mail in
two ways, these ways are:
Direct delivery – this is when the mail is received normally at

the business reception desk. Before receiving the mail, they will
need to sign for it. A disadvantage of direct delivery is that the
work cannot start until the mail has been delivered.

Private box - Businesses with PO Box after them means that

they have a private mailbox at their local post office. Each will
have a number, which will be within the businesses address. The
mail has to be picked up to be taken to the business. An
advantage of private box mail is that before the business starts
in the morning an employee can pick up the mail and take it to
work so its there at the start of the day.
Keeping records
Records are kept both on paper and on computer. Administrative staff

will be responsible for maintaining both types of system:
Paper based records – This consists of letters, memos, faxes,

reports and print outs of emails that need to be retained for
future references. All records need to be kept neatly, clearly
labelled and stored carefully so that they remain in good
condition.
Computer records - This consists of customers, staff or product

files kept on computer, usually in a database. However, there
will also be computer files containing word processed documents
and spreadsheets. Administration staff will be responsible for
labelling their directories, keeping back up copies and updating
records regularly. Organisations which have electronic filing scan
incoming documents into the computer system and store them
using special software. This reduces the amount of paper stored
on the premises.
Organising meetings
Meetings are often held between members of staff or between staff

and visitors. Administration staff are responsible for making the
necessary arrangements, including booking a room, organisation
refreshments, preparing any paperwork, notifying everybody when and
where the meeting will be held, taking notes at the meeting and
sending copies of these notes to everyone who was invited to attend.
Responding to enquires
Enquiries will be received internally, from members of staff in other

departments, and externally, from customers, prospective customers
and other business contacts such as the organisation’s bank or

accountant. Enquiries can be received over the telephone, by email or

in person.
All enquiries must be answered promptly with the correct information,

regardless of other priorities. Administration staff may answer
enquiries themselves or pass it on to the relevant person.
Cleaning and maintenance
Cleaning and maintenance, all employees expect their working

environment to be a pleasant place to work in. All businesses such as
Tesco require regular cleaning. This is especially true of a business
where hygiene is important, such as a restaurant. The administration
department also organises the maintenance of a firm’s building and
other resources. This may include decorating the inside and outside f
buildings and maintaining machinery.
Cleaners may be employed directly by the company or subcontracted

from a specialist cleaning company. Many organisations find it more
cost effective to use specialist companies that to employ their own
cleaning staff. Some cleaners undertake small cleaning duties such as
vacuuming offices and cleaning toilet areas. Other staff will be
employed to do heavy cleaning duties such as cleaning windows.
These staff may be part of the maintenance section in some
organisations such as Tesco.
Maintenance staff are employed to do general repair work such as

mending broken windows or fixing a leaking rook. Specialist work,
such as plumbing, is usually contracted out, although many
organisations employ their own electronics.
Health and safety
The administration departments must make sure that there is place

where injured employees can go and get their injury treated. The
department may keep all accidents records in one organisation, on
another only summary records may be kept by human resources and
administrative staff may issue and store accidents forms for their area.
The accidents form will include these things:
Who was injured
What their injuries were

Who dealt with the matter
Names of witnesses
Date of the accidents
What caused the accident
How it was dealt
The accident form help improve the businesses health and safety
system by making sure the same accident doesn’t happen again.
Sometimes the form can be used as a report in legal action.
In particular, administrative staff are involved in the following areas of

health and safety:
All employees have a duty to work safely. In an office, hazards

such as boxes left in a passageway or files piled high on a rickety
shelf can lead to accidents. Staff are expected to keep their work
area tidy and are responsible for ensuring that hazards are dealt
with promptly.
Hazardous substance such as cleaning materials must be clearly

labelled and stored safely according to the manufacturer’s
instruction.
Computer and telephone users must have the correct equipment

and be trained to use it properly since a badly positioned
computer or a flickering screen can cause back or vision
problems; overuse of a keyboard can lead to repetitive strain
injury.
Administrative staff will not only be involved in health and safety

record keeping for their own area, but also in any risk assessments
undertaken.
Security
Security is another important factor to any business such as Tesco.

Security is often contracted out to specialist security companies. In
many cases, security guards also monitor and report health and safety
risks and some may be trained to perform first aid. The organisation’s

head of security will advise on security precautions, such as the

installation of closed – circuit television.
In Tesco, security guards are located at the main entrance to the site
to keep the store secure and to make sure nothing gets stolen. Tesco
has to have constant security as there are some very expensive items
in the store. Also as the store would be crowded it will be very easy for
someone to steal something from the store, therefore Tesco have a lot
of CCTV cameras around to store. Also if the store is under attack from
a robber, there must be a panic buttons under the desks.
Support for software applications, electronic communications

and electronic transaction
Support for software applications are people who help firms use
computers. This is very important in a business that uses IT. In any
organisation, computer failure causes serious problems. In a company
which uses a networked computer system for the creation, storage and
transmission of electronic information, computer failure can be
catastrophic. Every moment when the computers are down, the
business loses money as mainly everything is done on the computer.
In most businesses there is a specialist IT manager in charge of this

function. Even in a small organisation there is likely to be an IT
specialist who solves basic problems and is responsible for obtaining
more specialist help when required.
The basic functions carried out by IT support staff may include the
following:
Purchasing computer equipment and consumable items such as

printer cartridges.
Regularly reviewing IT systems and recommending upgrades to

hardware and software as required.
Advising users on security procedures in relation to computers,

including the issuing of passwords and computer IDs to new
users, monitoring of IT usage and virus checking.
A business will also need good security on all their computers to

keep them safe and prevent hackers getting into the computers.
Installing security devices such as a firewall, which prevents
external users from accessing company data and automated

protection systems which check email attachments to reduce the

risk of virus being downloaded.
Providing assistance and guidance on new equipment or software

which may include running training sessions.
Providing ongoing support to users who experience technical

problems. This is often down through a computer help desk
which users can phone if they experience a problem.
Setting up network services and liaising with users to develop

new services that would be useful. This is likely to include
maintenance of a company intranet which provides information
internally to staff.
Tesco’s administration and IT support
Tesco’s mail is delivered to the sorting office in the head office. This is
where all the letters are sorted out into piles so they could g be sent
off to the right departments or to the right person.
Tesco keep their records in a variety of ways. Paper based records are
kept neatly and clearly so it can be easily found in the future. This
consists of letters which have been received into the business, memos,
faxes and reports e.g. financial reports. Tesco also keep most of their
reports on computers. The computer records may contain customer
emails and also important documents. Computer records are easy to
find because it is easy to organise all the records.
Operations
Operations is a function within a business, it is sometimes called the

production department. Operations are when the firm sets about
making the best of their resources. Many businesses use computers to
improve their operations. This might include CAD as this programme
helps speed up the design process and the use of robots in
manufacturing goods.
The main resources a business would want to use the best of are:
Materials – products for retailing or raw materials
People – operators, managers, support staff and specialists

Equipment – vehicles, computers and machinery
Building and land – offices, shops or farmland
Some businesses have quality checks where they can find out if their
products have become better. To do this they usually give out
questionnaires to customers. All their answers are then entered into a
system where they can workout where they have improved. To show
to customers that their products are good quality some businesses will
obtain quality standards of the ISO 9002. While businesses that want
to show that they are good at managing staff and training will be
awarded with Investors in People award. The business will then be able
to place the symbol of the awards on their products, advertisements
and documents. The business will be continually checked if these
qualities are being met.
Marketing and Sales
Marketing and sales involve businesses in many activities. Marketing is

the process that helps businesses to discover and meet the needs of
consumers. Marketing staff aim to be one step ahead of the customer.
They try to identify the customer’s needs and then the research or
design departments try to full it. Tesco have responded to customer
needs by providing wider car parking spaces for families, baby
changing rooms and help with packing shopping.
Businesses undertake a range of activities to help meet customer

needs including:

The contribution of marketing and sales to a business is vital for there

is no point in producing goods or offering services that nobody wants
to buy. The number of sales directly affects the profitability of a
company.
Market Research
Market research might be carried out locally throughout the UK, or

sometimes internationally. Market research aims to find out customers
needs and views existing products and services and potential new
products and services.
The information obtained may then be used by a business to design or

improve a product or service.
Market research can be carried out by using primary research

methods, secondary research and Qualitative research.
Primary Research
Primary research involves collecting and analysing information at first

hand. The advantage of primary research is that the information
obtained is original and up to date. These methods are mainly used in
primary research methods:
Postal surveys- this involves sending consumers a

questionnaire through the post, which the consumer completes
and then returns using the freepost envelope which is provided
by the business. This is a common method because you can
reach a large number of people in a short space of time, but the
number of replies received may be small as some people may
not want to participate.
Personal surveys- this involves face to face interviews, often

using a questionnaire with an individual or group of people. This
is when a researcher carries out an interview in the street but
some people will not be prepared to stop and take the interview.
Telephone questionnaires- This involves asking people

questions over the phone. This is a good method, but is time
consuming.

Using ICT- now businesses mainly use ICT to send out their
questionnaires to people by email. Also some businesses have
their questionnaires on their website so people can take the
survey online. This is very convenient for both the business and
the public. This is also the cheapest method.
Observation- Direct observation allows the researcher to see

how something is done at first hand; participant observation
means that the researcher becomes part of the group being
observed.
Businesses also use other methods to obtain information.
They may test a new product or service in a particular area of the

country and obtain feedback from users to see if any adjustment
should be made before launching it nationwide.
They can also ask employees to test new products, such as food
and clothing.
Designing a questionnaire
Businesses will often pay a market research agency to design the

questionnaire for them, carry out the research and analyse the results.
It is essential to phrase the questions so that you obtain the
information you want. The questions also need to be structured,
usually with a choice of options, so that analysing the replies is
relatively easy
Questions should usually focus on:
Similar products or services used by the customer
The type of products or services the customer would prefer
The price paid
The price the customer would be prepared to pay for additional

features
The newspaper and magazines the customer reads and the

television programme they usually watch
The places the customer usually shops

The customers views on the company’s current products or

services.
Secondary research
Secondary research involves looking gat information that already

exists. It can be found in newspapers, magazine articles, books,
published company accounts, and the internet. Businesses store a vast
amount of information on their database systems about existing
customers and existing customers and their buying habits. This is true
because a business such as Tesco operates a loyalty scheme which is
the Tesco club card. E-commerce and internet transactions also
provide companies with information, as customer preferences and
behaviour when they access the site can be tracked and this can then
be used to automatically offer the customer particular products when
they log on again.
Business can also buy information from other company databases and
obtain government statistics about consumer expenditure and details
of their competitors.
Qualitative research
Qualitative Research is about investigating the features of a market

through in-depth research that explores the background and context
for decision making. There are two main qualitative methods - depth
interviews and focus groups. However qualitative research can also
include techniques such as usability testing, brainstorming sessions
and "vox pop" surveys.
Depth Interviewing
Depth interviews are the main form of qualitative research in most
business markets. Here an interviewer spends time in a one-on-one
interview finding out about the customer's particular circumstances
and their individual opinions.
The majority of business depth interviews take place in person, which
has the added benefit that the researcher visits the respondent's place
of work and gains a sense of the culture of the business. However, for
multi-national studies, telephone depth interviews, or even on-line
depth interviews may be more appropriate.
Feedback is through a presentation that draws together findings across
a number of depth interviews. In some circumstances, such as

segmentation studies, identifying differences between respondents

may be as important as the views that customers share.
The main alternative to depth interviews - focus group discussions -
are typically too difficult or expensive to arrange with busy executives.
However, on-line techniques increasing get over this problem.
Using market research information
The main reason for doing market research is to increase sales. The
first step is to decide the marketing mix for the product or service.
This is the 4Ps:
Product
Price
Promotion
Place
Product
This is the type of variety of product or service the customer wants,

the preferred design, whether packaging is important, whether a
guarantee or after sales service is required.
Price
Price is how much the customer is prepared to pay for the product,
whether discounts or credit terms would help sales, the price of
competitor’s products.
Promotion
Promotion is where it would be best to advertise the product; the way

you are selling the product would be the most effective, the sakes
promotions and publicity to be used, how the product should be
displayed in shops.
Place
This is the type of shops used by potential customers, the magazines

and newspapers they read, the television programmes they watch,
how the product should be sold for example, direct to the customer or

in a shop, what regions of the country to cover, what type of

transport to use, where to locate shops and depots.
Businesses such as Tesco need to take the 4Ps into account when
meeting the needs of their customers because a successful marketing
mix boosts sales. The marketing mix is likely to be slightly different for
every product or service, even those that seem similar.
Promotion
All businesses need to promote their products and services; otherwise

customers would be unaware that they exist. The method used will
depend on the type of product or service and whether it is being sold
regionally, nationally or internationally. The range of available
methods includes:
Advertising
Sales promotions
Publicity campaigns
Personal selling
All promotional campaigns stress the benefits of owning a product or

using a service. This is called AIDA. Their aim is first to draw
attention to the product or service; then to create interest; thirdly to
develop desire for ownership; finally to invite action by telling people
how to buy it.
Advertising
Advertisements are mainly found in newspapers, magazines,

televisions, radio, in cinemas, on billboards, train stations and on
buses. Householders also receive direct mailshots through their
letterboxes as leaflets. The aim for advertisers is to make their
particular advert stand out from the rest. This is a skilled job and most
large organisations such as Tesco employ an advertising agency.
Adverts are intended to be persuasive. They sell an image to the

customer. The advertisers advertise two different adverts. They create
adverts with a lot of images for children as this tends to be attractive.
Also some are informational. These are mainly used for business

customers who don’t want hype but the facts. For that reason, these
are usually longer advertisements.
Businesses use several tactics to encourage people to buy their

products or service. The business needs to decide on which media to
use. But the choice will depend upon:
The type of product or service
Where the product or service is being sold
The cost of alternative media
The habits of the key customer which were discovered during

market research
Advertising on leaflets or in newspapers is much cheaper compared to

advertising on television. National television advertising is very
expensive, so is suitable only for items of interest to large numbers of
people. Regional advertising is used for local products and services.
Businesses want to check the success of advertising campaigns. The

reference code on a form you need to complete to obtain further
information will help them to do this. Customer service staff, too often
asks new customers where they heard about the company or product.
This is also a common question on most questionnaires.
Sales promotion
These are campaigns which tempt people to try a product. They

include point-of-sale demonstrations in store, offering free samples,
giving discounts, running competition and special offers. A business
such as Tesco may start a sales promotion to boost sales of a
particular product if demand has fallen.
Some companies offer dealers incentives to sell their products, such as

bonus payments, prizes and provide dealers with special display
materials. Manufacturers want supermarkets to display their products
in a prime position, often offering them greater discounts to do this.
Publicity campaigns

All organisations want as much free publicity as possible as this keeps

them and their brand names in the public eye without costing
anything.
Another way of getting publicity is through sponsorships. Many firms

pay football teams to wear shirts advertising their name. Other
companies sponsor particular charities.
Sales
Sales staff are employed by organisations which cannot rely only on

advertising and promotion methods. They may have different titles
and do different types of jobs, depending upon the product or service
they are selling. Their aims are to make direct contact with the buyer
to convert possible interest into a sale.
Merchandisers are employed by companies making household products

to visit supermarkets to persuade them to stock their brands, display
them prominently and become involved in in-store promotions.
Telesales staff are employed by companies that sell their products or

services over the telephone. These include banks and insurance
companies which employ telesales staff to follow up enquiries made by
customers and newspapers who sell advertising space to local
businesses.
Sales representatives are employed by organisations which sell

complex or specialist products to industrial and business customers.
They travel around the country meeting customers and discussing
their needs.
Sales staff are employed by retailers that sell expensive products on

which customers will require technical advice and information, such as
cars and computers.
If a business employs a skilled sales force it will be very expensive,

particularly if they are paid bonuses or offered incentives to make
additional sales. But there are also many benefits:
An effective sales person can make a considerable difference to

the number of sales made. Knowledge, experience and good
communication skills can persuade a hesitant customer to make
a purchase.

Sales people can build strong links with customers which help to
keep them loyal to a particular brand. Many customers like
having an individual to look after them.
Sales staff can obtain information from customers who help to

inform the marketing mix and future sales. Most sales
representatives prepare visit reports to summarise their
discussions. They may find out that a customer is planning to
expand in the future, which will provide sales opportunities.
How does Tesco’s marketing strategies help them achieve their

aims and objectives?
Tesco's marketing strategy has been based around a database

strategy driving a huge direct marketing campaign. There customer
base (as recorded by the details provided by the hugely successful
ClubCard Scheme) almost exactly mirrors the demographic make-up of
the UK. Simply this means they have somehow managed to be all
things to all men. They have between 7m and 8m different variations
on the mailings going out to their clients based upon demographic and
transactional data. The objective has always been to up-sell to their
existing customers through acquiring better customer data and
meeting their needs. Now, through providing customers with what
they want, the most significant strategy has been aimed at increasing
the non-food section by capitalising on the growing need for one-stop-
shopping created by an increasingly time-starved population.
Tesco’s marketing and sales
Marketing is the way a company such as Tesco puts its products to

potential customers for sale and this involves market research,
promotion and sales. Market research is the way Tesco find out about
the customers needs. Market research can be done using
questionnaires. The aim of this is to give the customers opinion about
a product so Tesco could use this information to improve their product
or services.
Tesco often give vouchers out at the till when a customer spends a
certain amount of money. Tesco also have a magazine which also has
a lot of vouchers to spend in store. This can influence more people to
shop at Tesco, as Tesco provide a lot of vouchers to the public.

Tesco communicate to the public in number of ways and this includes,

advertising on TV, leaflets and advertisements on newspapers and also
mailing promotional offers to their club card holders.
To achieve their aim to gain customer loyalty Tesco also support their
local communities by holding charity fundraising and vouchers for
schools. This includes, computer for schools, recycling, supporting
farmers, etc.
Customer Service
Customers are essential to every business because they bring in

income into the business. Without customers, a business would not
make a profit and would eventually close down.
When customers buy goods or services they expect them to be good

quality. The more they pay, the better the quality they expect.
Customers also expect staff to:
Give prompt attention and service
Know about the products or services they are selling
Be polite and helpful
Concentrate on their specific needs
Offer extra services that will help them
Many businesses sell the same types of goods, for example Tesco and
Asda, so customers have a choice where to go. If they have a positive
experience when they visit the store, this will influence them not just
to buy, but to return back to the store. Customer service is all about
providing this positive experience. These include:
Providing information
Giving advice
Providing after sales service

The purpose of customer services is to fulfil their expectations, make

them fell important and provide a range of services which will meet
their needs both now and in the future.
Providing information
The type of information required by customers can vary. It is doubtful

if any customer service assistant could answer every possible query
immediately and most customers realise this. The main point is how
the query is dealt with.
Customers might ask:
A technical query about a product or service
A general query about Tesco
About the range of products and services supplied
About the location of another store
About general facilities available
Customer service staff should have information on products and

services and know the range on offer. In a store, they should know
where every product is located. They should be able to check which
items are in stock, which items are not and how long they take to
order. In a large organisation such as Tesco, this information is store
on a computer database and can be accessed by assistants quickly and
easily. A customer database will record the names and addresses of
existing customers as well as details of recent purchases and amounts
paid. This enables staff to quickly answer queries from a customer who
has recently purchased from them. A stock database will give details of
prices, delivery times and availability.
Giving advice
Advice is very important in a business such as Tesco. Some types of

advice are more critical than others because the consequences of
giving the wrong advice can be so serious. In particular, advice about
medical, financial, legal or safety matters must be correct. For that
reason, unless staff are specially trained, they should refer queries on
such topics to an expert.

In many organisations a separate function exists called technical

services. This area consists of specialists who can answer complex
technical queries, normally related to machinery or equipment.
After sales service
After sales service relates to many reasons why a customer may

contact the firm after making the purchase. These include:
Goods which are being returned
Goods which need repairing
Goods which need regular maintenance
General complaints
Technical queries
Returned goods
Goods may be returned because the buyer has simply hanged their
mind, or because the goods are faulty. Organisations vary in their
policies on returned goods and customer service staff needs to know
exactly what the policy is.
Some organisations allow purchasers who change their mind later to

return any goods, providing each item is in perfect conditions, the
customer has kept the receipt, and the goods are returned promptly.
Some stores allow the buyer to exchange the goods or ask a refund.
Others will only allow an exchange to be made.
All organisations including Tesco must allow purchasers to return

goods which were faulty when purchased. They must also be prepared
to refund the money paid.
Offering a repair service
Many types of goods can break down after a period of use – from
watches to washing machines. Sellers of such items usually operate a
service facility. Small items will be taken to the shop where they were
purchased. Large items, such as domestic appliances, are repaired in
the buyer’s home. The customer calls the service centre; customer
service staffs check the details on the database find out details of the

fault and arrange for a technician to call. Spare parts which are
regularly needed are carried in the technicians van to minimise delays.
Business organisations take out a service contract when they buy

expensive equipment, such as photocopiers or computers.
Dealing with complaints
Most businesses have an official procedure for dealing with customer

complaints. These may be received face to face, when a customer
visits the store, over the telephone, or in writing.
Complaints must be dealt with promptly and any serious issues must
be investigated properly. If necessary, steps must be taken to ensure
that the problem doesn’t occur again.
Dealing with technical queries
Many businesses have a technical support function to assist customers

with specific queries. This facility is available to new customers and to
those who need help after making a purchase.
Research and development
Businesses such as Tesco have to improve their customer service and

products to keep the business successful and to gain more customers
and income. Research and development is used for:

New products may be developed because of technological or scientific

advances, changes in customer buying behaviour. Within the sales
industry there is a cycle which is called the `product life cycle`. There
are five stages of a product and these are:
1. Development- when the product is first being made
2. Introduction- when the product is first introduced to the public
3. Growth- the production growth of the product has increased but

at a lesser quality and in a cheaper way.
4. Maturity- this is when the product has reached its peek and is
selling all the time.
5. Decline – this is when the sales of the product has decreased

and less have to be made
Within a business they usually have small sections dedicated to

research and development. When doing research the business will
properly set up stands in which the customers can test the product
and then fill out a questionnaire. This will help find out what its
customer wants and needs are to produce new products.
The aim of research and development is to work with designers to

develop a usable product that can be manufactured at a reasonable
cost and sold at a competitive price. This type of research and
development activities which are undertake vary from industry to
another. Some research and development specialists concentrate on
new processes to apply technological advances to production. The aim
of such specialists is to produce high quality products more quickly and
at less cost. Most organisations aim to continually improve product
design and performance.
When producing a new product businesses have used the 3 P’s, which
are:
Price – the product must be set at a reasonable price in which

customers can afford

Practicality- new products need to be safe for and made at a

good quality. A small amount should be made at first to see if
the product is going to be successful.
Profit- there is usually a conflict between the businesses need

and the customer’s needs. The business should only produce the
product if it gives them a profit.
The 3 P’s often tie with lots of other functional areas within a business
such as the financial department for providing them with a budget.
The human resources department to hire them specialists to carry out
research and the marketing department and manufacturing section for
advertising and producing the product.
Most businesses use computer aided design (CAD), which allows them
to research product designs on computers. This saves a lot of time and
allows diagrams and plans to be produced easily and quickly.
Computer aided manufacture (CAM), helps the process by operating
machines. Machines such
Developing new products
The development of new products involves the biggest risks. Before

work starts, the idea will go through some form of product evaluation,
usually in a team including marketing, financial and forecasting
experts. Work will start if funds are available and approval is given.
The first step is to making a prototype, or model and possibly samples,
before starting full scale production. Much of this work is now done by
computers.
Risk in research and development
Research and development can result in new and profitable products.

However, there is no guarantee that even the most brilliant invention
will result in a successful new product. Research and development can
be risky. The research put into the product may lead nowhere and the
costs of development are high as well. Also the product may fail later
as consumers may not like them or the market may have changed.
Tesco’s research and development

Use of IT
ICT is used in business such as Tesco because it helps to reduce costs

and improve goods and services.
ICT is used in many different types of areas in a business. Examples

are:
Electronic communications between departments (e.g. email and

use of intranet)
Facilities to share common data (e.g. stores records, employee
records, financial data, orders)
Security systems, (e.g. virus protection, back up against loss,
confidentiality)
External communications (e.g. email, market research, use of
the internet for marketing and sales)
Online support for customers (e.g. order progress, new products,
sales, response to queries)
Electronic transactions (e.g. bare code systems, sales, stock
control, orders, invoices, electronic funds transfer)
Electronic communications between departments
Two methods of communicating information internally and

electronically are email and using intranet.
The facilities available for staff on email include the ability to send
messages to one person or to a named group or even to everyone in
the company. You could also attach any type of file to transmit with an
email. Security systems also control the content which is sent or
received on a company email system.
On an organisations intranet, information is store in a secure area of

the computer network. It is protected by a firewall, which prevents
external access. The information can be accessed only internally by
staff.
Tesco may also use intranet to store all types of data. This allows all
members of staff to save data and view it on a different computer in
the business. So if a member of staff wanted to give a word document
to another member of staff, they would not need to email it to them.
They would just save it on the computer and then other members of
staff can access the file. Therefore this saves time.

Facilities to share common data
Databases are used to store a great deal of information relevant to the

business. A business may have internal databases for:
Customer records
Product lines
Spare parts
Staff records
Suppliers
Order files
Each database record will contain information relevant to that topic.

For customers, you find customer reference numbers, name, address,
previous purchasing record and credit limit.
However, each database can also be linked to others and this is called
relational database. So when an entry is updated in one database,
entries in linked databases are also automatically updated. So in
Tesco, if a customer placed an order for a product, this would be
entered on the customer record. The product record and the order
record would also be updated automatically.
The databases allow staff to access up to date information quickly and

easily. Sharing this data helps everyone as a wide range of queries can
be answered rapidly and accurately from information instantly
available on screen.
Security systems
The security in a business is very important. If a computer in a

business is not secured with the correct software, hackers can easily
access all the data in the businesses network. Therefore all the
computers should have firewalls.
Virus protection
A computer virus is a programme which causes the computer to

malfunction or allow unauthorised access to it. Virus protecting
software is designed to prevent viruses being downloaded on to the
systems and to repair any files that may have become infected. Most
ant-virus software manufacture provide 24 hour, 356 day online
support to their customer, constantly monitoring all servers and
workstations on a network and providing an immediate alert if a virus

is identified.
Viruses can also be downloaded from the internet and can be received
through email attachments. Therefore certain types of files may be
blocked on a network system.
Backup against loss
Back up against possible data loss on a computer takes place in three

ways:
When developments to the system are being undertaken, a

backup of the current version is made before an update is
installed. This enables the original to be reinstalled if a virus is
detected in the update.
Important data and systems should also be stored on backup
disks, for example on a USB stick, or saved on a CD.
To protect the confidentiality of data, all networks have an
access protection system. Therefore each person in the business
has its own login ID. The user must also enter a password for
the system to operate.
Specialist access may be given only to managers to read higher level,

confidential data, such as financial data, and this will be controlled by
the network administrator. Access to personnel data may also be
restricted.
External communications
External communications are sent or received over the internet. Large

organisations such as Tesco are connected to the internet by
broadband and are constantly online. The internet in a large
organisation such as Tesco can be used for many reasons within a
business:
Market research – specialist market research agencies provide

online reports and analyses for a fee. Many businesses subscribe
to these services. Professional organisations can access online
databases of specialist information, such as legal reports.
Other research – researchers and administration can access a

range of sites to find out relevant information, from train times
to information on health and safety. In addition, can arrange to

be sent email updates on news features or other topics which

concern them.
Companies with a website can use the internet for marketing

and sales promotion. Companies such as Tesco normally use a
variety of techniques to promote their product.
Online support for customers
Many businesses provide online support to their customers to keep

them informed about progress with a transaction. So when you log on,
you automatically find out:
The status of any orders in progress

Information on new products which may interest you
Details of sales made to you recently
On most sites, a log in ID and password or a customer reference

number is needed to access your own information. The benefit is that
a customer has secure instant access to information and the identity of
customers submitting orders is authenticated.
Most sites also have a contact us option so customer queries can be

sent by email or you can contact them by phone.
Large organisations such as Tesco also operate an opt-in email

system. Customers and website visitors are encouraged to sign up to
receive monthly newsletters about Tesco and information about their
new products and special offers.
Electronic transactions
Electronic transactions refer to any occasion on which the data relating

to a purchase or sale, or payment, is processed by computer. Below
are some examples:
Tesco products are all transactions processed by a bar code

reader, which automatically recognises the product from the bar
code strip. The benefits are less risk of inaccurate keying in of
data and no need to price up every product on sale. Price
changes can be implemented quickly and easily.
Electronic point of scale (EPOS) systems usually linked to a bar
code reader. These systems enable information
- On the quantity of stock sold to be recorded electronically.

- Stock sold to be matched against existing stock levels, for later

analysis by mangers.
- Automatic stock re-order lists to be produced
- Prices to be stored automatically through a price look up facility
- Till receipts to be printed containing product descriptions and
prices, as well as personalised or promotional messages.
Superstores which use EPOS also link it to any type of loyalty

system in operation so that customer record is also updated
automatically.
Purchasing stock through electronic data interchange (EDI) when
the order is sent from the buyer to the sell by computer and
payment is also made by computer. Access is available only by
using a special code. The payment computer communicates with
the banks so that money is transferred immediately from the
purchaser’s bank to the supplier’s bank. A computerised
acknowledgement is also sent automatically to the supplier’s
computer.
Sales data recorded on special accounting software which then
updates the company’s accounts and enables invoices and other
accounts documents to be produced automatically.
Electronic funds transfer (EFT) systems are used in the following
situations:
– When a customer pays using a debit card, such as switch or
delta in a Tesco store. The card is swiped through a terminal at a
checkout and the funds are transferred electronically from the
customer’s bank account to the Tesco store. The customer signs
a voucher to validate the sale and may also take advantage of a
cash back facility in Tesco.
– When goods are bought online, using a credit or debit card, from
the Tesco website (www.tesco.com). Companies which operate
web stores usually have additional security protection installed
on their website. This is to prevent hackers from obtaining the
customers card details.

Business communication
Good communication is essential for business. Without it, employees

do not know what they are supposed to do and mangers will not know
what customers want. Good communication means that the right
people get the right information at the right time.
There are two types of business communication, internal and external.
Internal communications
Internal communications is when employees contact other people

within the business; e.g. the owner of Tesco may contact the financial
department on the income and expenditure of the business. Internal
communication between staff would be by email, memo or staff
newsletters. In Tesco checkout staff may need to replace each other or
call in a different employee ever the store intercom. A business such
as Tesco needs to have good internal communications as health and
safety within the work place is very important.
External communications
(As I explained earlier in the coursework)
External communications are sent or received over the internet. Large

organisations such as Tesco are connected to the internet by
broadband and are constantly online. The internet in a large
organisation such as Tesco can be used for many reasons within a
business:
Market research – specialist market research agencies provide

online reports and analyses for a fee. Many businesses subscribe
to these services. Professional organisations can access online
databases of specialist information, such as legal reports.
Other research – researchers and administration can access a

range of sites to find out relevant information, from train times
to information on health and safety. In addition, can arrange to
be sent email updates on news features or other topics which
concern them.

Companies with a website can use the internet for marketing

and sales promotion. Companies such as Tesco normally use a
variety of techniques to promote their product.
The need for communication in business
A constant flow of communication is essential for any business to

operate effectively because up-to-date and accurate information is
needed for decisions to be made. This is a four stage process:
1. Obtaining the information

2. Sharing information with relevant colleagues
3. Deciding what action should be taken
4. Communicating the decision or plans for action
Below is an example:
eting manager’s assistant tells her boss she is leaving and hands in her notice.
Obtaining up-to-date information.
esources that there is a vacancy. Human resources advertise the job and arrange interview.
Sharing / communicating information
A replacement assistant is chosen

Deciding / agreeing action
All candidates are informed of the outcomeCommunicating action to relevant people

Communicating with other people in business
Business communications can be formal or informal depending on:
The reason for the communication

The relationship between the people communicating and how
well they know each other:
Both of these will influence the type of communication and its tone.
Formal communications are normally used for important or serious

matters, when the recipient isn’t known very well, or when a paper
record must be kept. Examples include:
Information to employees relating to their employment

Complicated instructions or technical schedules which everyone
must follow
Financial documents sent to shareholders
Letters send to customers
Informal communications are used between people who contact each

other frequently, both internally and externally.
Methods of communication
In order to communicate well with others, businesses such as Tesco

might use:
Oral communication (e.g. telephones, meeting, telephone

conferencing)
Vide communication (e.g. video conferencing, internet video
link)
Written communication (e.g. memos, letters, financial
documents, advertisements, email attachments / documents)
Graphical communication (e.g. production drawings, on screen
graphics, graphics via the internet)
Oral communication

Oral communication may be face to face when two people or a group

meet together or over the phone. Telephone conference takes place
when several people are linked simultaneously so that they can have a
discussion. The type of telephone system in operation will limit the
number of links that are possible at any one time.
Many staff carry a pager or beeper so they can receive a message at a
distance. In Tesco security guards use private radios on which they
can send or receive messages or instructions. Tesco stores to
communicate with other staff to inform them that there are, for
example food spillage, the staff can use PA systems, which are
addressed over speakers through the store. This way them can inform
the customers about the problem and get someone to solve the
problem. The PA system also helps to call staff to come to tills if the
shop is busy. An advantage of oral communication is that it is quick
and problems can be solved quicker. However the disadvantage to this
is that sometimes if the store is very busy and noisy the messages can
not be heard properly. Also confidential messages can not be sent to
other members of staff as the customers will hear it.
Video communication
Video communications have reduced the need to travel to meetings.

They enable meetings to be held more easily and more cheaply since
staff do not need to travel long distances.
A video conference enables two or more people in different locations to

hold a meeting. They are connected through telecommunications links
to provide both visual and voice links. There are two main options:
Video conference equipment can be bought or hired. Equipment

includes cameras that can zoom in on individual speakers and
large screen VDUs. Participants sit in a virtual conference room
and can communicate as if they were sitting together in one
room. The system can also be used for presentations and talks,
but it is very expensive and the communications links also have
to be paid for.
Internet video link is a much cheaper option. Staff requires a
computer linked to the internet and a webcam, microphone,
speakers connected to the computer. Two participants can then
contact each other. Their voices are transmitted over the
network to each other’s speakers and the image in front of the
web cam appears in a window on the other persons monitor. The
drawbacks are the poor quality of the video image in some cases
and that only two computers can be linked together at any one
time. So if Tesco were expanding their business in other
countries they could use video communication to communicate

with the UK stores.
Written communication
Written communications refer to text based documents, such as

letters, memos and faxes, which are sent by mail or electronically.
Also included in this category are financial documents which are

prepared and distributed by all organisations – from invoices
requesting payments to formal accounts for the Inland Revenue.
Brochures and catalogues advertising products are another form of

written communication, as are advertisements whether for products or
the recruitment of staff.
Emails may contain attachments such as word documents or

spreadsheets. Other examples of written communications include
telephone messages, notices on staff notice boards, staff newsletters
and documents on the staff intranet.
Graphical communication
Graphical communication refer to any type of pictures or graphics

which are created on computer, or input by means of a graphics device
such as a graphics device such as a graphics tablet or scanner and
then transmitted to someone else. Graphics can range from a simple
pie chart to a complex engineering drawing. Architects, designers and
engineers are examples of professional workers who regularly send
production drawing who regularly send production drawings or designs
to their colleagues or to a customer. These may be prepared on paper
and scanned into a computer, or created on computer using a CAD or
graphics package.
Any type of graphic stored on computer can be viewed on screen or

attached to an email. So Tesco could use graphical communication to
create posters. Posters are a good way to gain customers as it can
influence them to visit the store for its low competitive pries.
Tesco has many adverts displaying items for sale, which are at a low
price. To persuade people to visit they normally use celebrities to go
shopping round their store and pick out items which they’d like to buy
and exclaim how cheap they are. Tesco also use graphical
communication in their recruitment process as they advertise job

vacancies in newspapers.
A large business like Tesco can afford to buy expensive equipment to

send emails, faxes and have videoconferences. This is because they
have recruited a lot of staff to look after and to communicate with.
External influences
Businesses can manage much of their own world but there are
external influences to which they have to respond and over which they
have less control. These are:
business competitors
Economic conditions
Environmental constraints
Business competitors
Business competitors may bring out a more advanced or cheaper

product or offer a better service. Today, most businesses operate in a
competitive market. This means that there are many suppliers offering
a similar service or product. This gives consumers more choice and
helps to keep prices low. Each manufacturer and each retailer will
compete for your business and use various strategies to tempt you to
buy from them.
Economic conditions
Economic conditions can affect the price of goods and the ability of
customers to buy goods and services. Customers are tempted to buy
more goods when they have money to spend or when borrowing is
cheap because interest rates are low. Equally, businesses are more
likely to increase production and to expand their operation when sales
are high and when they think this situation is likely to continue. If
people are worried about jobs or about their future prospects, they
may stop sending. Goods remain on the shelves; businesses such as
Tesco receive less money so produce fewer goods and may lay off
some workers. This means people have less to spend. In this situation,
there may be an economic downturn. All governments are keen to
avoid and economic downturn and try to take action to manage the
economy to keep it buoyant.
Environmental constraints affect the way in which the business is

allowed to carry out its operations and dispose of waste materials. In
recent years, many laws have been passed to help to protect the
environment, including the control and regulation of pollution, the use
of resources and the disposal of waste. Such laws and regulations
affect business operations. However, many businesses are keen to
prove that they are socially and environmentally responsible and often
take action beyond those required by the law. They may set
environmental targets for themselves or produce environmental
reports.
Tesco’s external influences
The main external influence affecting Tesco will be competition with

other supermarkets such as Asda, as they will both compete against
each other by trying to win a greater market share. Tesco’s strength of
brining in more customers is because they have a good customer
service. However Tesco would also need to compete against other
supermarkets by lowering their prices to keep their reputation of a
cheap supermarket. But there is a weakness towards Tesco. The
weakness is that people are looking for better quality food so people
may go elsewhere. So Tesco should expand on their food by providing
more quality food at a competitive price.
Many towns have more than one supermarket and each one of them
will try to advertise its special offers regularly to attract more people
by using posters, local newspapers and also hand out door to door
leaflets near the area. This can lead to a price war between the
supermarkets as all the supermarkets are competing for customers. By
competing against other supermarkets the other supermarket may
even reduce its profits by having a low price, so Tesco need to put the
price of their products at a reasonable price so it can benefit them and
their customers.
If Tesco bring out a new product to attract more customers, they

should first think of doing some research. As I mentioned before in my
coursework, Tesco need to do market research so it can suit the
customer’s needs.
Economic conditions can also affect Tesco’s sales. If the customers

have less money they will tend to buy cheaper goods from Tesco and
this will mean Tesco’s own brand sales would increase, and branded
products may decrease.
Value added tax (VAT) can also affect Tesco’s sales. Also if income tax
or the interest rates increased rapidly, customers might not have a lot
of money to spend in Tesco therefore sales may decrease.
The government can also influence Tesco because of where the
business can locate their large and small stores. The government can
influence Tesco by providing grants to strengthen or expand the store.
The government will also try to influence Tesco by locating their larger
stores in enterprise zones where there are more unemployed people.
This is a benefit of Tesco as the people can fill in the jobs within the
store at a low wage.
An external influence which may affect Tesco will be the local

community. A large Tesco store needs to think how it is going tot keep
its pollution to a minimum. Also protecting the environment is said to
be a law put in by the government to keep the environment at its best.
Business competitors
Business need to sell their product or services in order to survive. Most

businesses also operate in a market in which they compete with other
suppliers of the same, or similar, goods. The market consists of all the
individual consumers who want to buy those particular goods.
Companies compare their success in the market by identifying their
market share. This is always given as a percentage of the whole
market.
When a new product, in Tesco is launched, demand may be high and

market is growing. Eventually, the market reaches saturation point
when everyone who wants the product has one. At this point, the size
of the market is virtually static and suppliers have to use other
methods to keep sales high. At the same time organisations are
competition against each other for the same customers to increase
their own share of the market.
The main tactic used by businesses such as Tesco is to make their own
product or service slightly different in some way. However when they
do this, it depends on:
The type of goods or services they offer

The aims and objectives of the organisation
The type of customer they have (e.g. individual consumers or
industrial buyers)
The type of competitors they have and the actions of their
competitors
Competitive competitors
Various features make a product or service competitive. The main

ones include:
The price buyers are asked to pay

The quality of the goods or services and the reputation or image
of the business
The availability of the item
Importance of price
All organisations have a pricing policy for the goods or services. They
may choose to sell at:
A low, highly competitive price

A middle range price
A high price
Or they may produce or sell goods at all three prices. Tesco also sell
goods at three prices. Tesco have a value rage which is at a low price,
a finest range which is at a high price and sells other goods in the
middle range. In this way, Tesco tries to satisfy the needs of a variety
of customers.
The wide difference in pricing is because organisations take into

account several factors when deciding what price to charge:
Organisations usually sell goods at a price which covers the costs

of production so they can make a profit. Some businesses may
sell below cost because they may want to win business from a
competitor. However, low prices cannot be sustained as the
business is making a loss on each item.
Some well known organisations such as Gucci trade on the
exclusive nature of their products and charge higher prices
accordingly. Lowering prices would actually damage their
exclusive image and they would lose their key customers.
Factors affecting price
Internal factors External factors

Cost of making product Prices of competitors product
Cost of research and development Discount allowed to retailers
activities
Cost of marketing and advertising Demand for the product

Organisations aims and objectives What customers expect to pay
Product image What customers are prepared to
pay
The chart above shows the main internal and external factors affecting
price.
Price competition includes special offers, payment terms and

discounts. Discounts and special payment terms are often used in
industry to gain a large contract when the total amount and the length
of time over which payment can be made may be the subject of
lengthy negotiations.
Importance of quality
Quality can relate to the raw materials used, the type of service
offered and to the reputation of the business. Generally, the best
quality costs money, so high quality goods or services will be more
expensive. However even if consumers are buying a cheap product
they expect it to be of satisfactory quality as this is a legal
requirements.
Some manufacturers try to gain a competitive edge by offering better

quality than their competitors at a slightly higher price and try to
convince customers it is wroth paying the difference.
Businesses which sell to industrial customers are keen to stress their

quality of service and their reputation as this may be more important
than price. This is because industrial customers placing large contracts
will insist on minimum standards of quality and after sales service. In
some cases, safety is also an issue.
Importance of availability
Availability is part of providing an excellent service. It may

include availability of the product or service, of related items, of
the business itself. Strategies used by businesses include:
Extending opening hours so that customers who work unsocial

hours can still buy goods without any problems. Supermarkets
such as Tesco and filling stations now open 24 hours.
A large range of stock and regularly replenished shelves and

racks so that customers have a wide choice of availability.
An in store or telephone ordering service for special items or

items which are out of stock with the offer to deliver the item to
the customer’s home address.
A catalogue or internet mail order service s so that customers

can buy from their own homes. Also Tesco have recently their
catalogue and Tesco’s website is www.tesco.com
Organisations which provide a service must also consider availability. A

business which provides a maintenance or repair service can gain a
competitive edge if it employs enough staff to be able to guarantee
prompt service at a previously agreed time.
Additional competitive features
Although a business can differentiate itself from its competitors

through price, quality and availability, there are either ways. For
instance:
A clothing shop offering a free alternations service to customers
Loyalty or discounts schemes enabling regular customers to

make savings on their purchase. Tesco currently offer this
service as they provide their customers with a Tesco club card
where you could save up points every time you purchase
something from Tesco. Also when you collect a certain amount of
points you then get vouchers from Tesco. Vouchers sent 4 times
a year Collect 150 points or more in a quarter and receive your
points as Clubcard Vouchers in your quarterly Statement.
Meeting other related needs of its customers. Tesco do offer a lot

of services to their customers such as, broadband, telephone
and a wide range of financial services as I explained earlier on in
my coursework.
Regularly reviewing existing ranges adding new features and
bringing out new models to tempt customers to make further
purchases.
Knowing the customer
A business which understands its customers knows what they need

and does its best to provide this will always have an advantage. They
do this by obtaining a customer profile which includes details on:
The age range of their customers

Their gender, whether they are mainly male, mainly female or
both
Their average annual income
Their lifestyle, e.g. whether they have children, how they spend
their leisure time, where they go on holiday
This information helps them to develop additional products linked to

their customers needs and promote them to the tight people. By
surveying the age group, the company can decide which type of
activities will be most appealing, and the most appropriate prices to
charge.
Some businesses have different types of key customers and will

develop specific products and services to appeal to each group.
Dividing up a market into different types of customers with different
needs is known as market segmentation.
Identifying the needs of different customers enables a business to

benefit from price differentiation. This is when different prices are
charged for the same service to different groups of customers.
Location of competitors
The use of new technologies such as telephone sales and the internet
have made it possible for businesses around the world to compete for
customers who have IT access. With this in mind you need to identify
possible competitors for the businesses you investigate. These
competitors could be:
Local competitors
National competitors
International competitors
Local competitors
A business will have local competitors if it provides convenience goods

to a local community or a personal service. Local competitors could be
businesses such as barbers because in a town there are many barbers
competing against each other to get more customers. Therefore

Tesco’s local competitors would be supermarkets near them such as
Iceland.
National competitors
Many businesses compete with other organisations all over the UK for
their customers business, particularly those that sell goods by mail
order or over the internet. Although these types of sales are currently
less than 10% of total sales, they are increasing.
In addition, consumers are likely to travel or search further to compare

prices and quality of expensive purchases, so this increases the range
of possible competitors.
Most organisations which supply to industry compete on a national

basis from advertising agencies to construction companies.
International competitors
Many organisations operate internationally, particularly those that sell

to industry or to governments across the world.
Although many overseas websites offer products direct to British

consumers, such purchases are not always practical. This is because
other factors such as import duties, delivery charges and customs
regulations need to be taken into account. There may also be
difficulties if the product later develops a fault. Generally, most
individuals buy from abroad only when they visit a country. However,
this has meant that some shops and stores on the south coast of
England now compete with French superstores for their customers who
may prefer to cross the channel to save money.
Economic conditions
However well a business manages its own activities, its success will
depend on conditions in the economy as a whole. A business can be
affected by changes in the economy. These are:
changes in interest rates

changes in prices
changes in exchange rates
Changes in interest rates
Interest rate can affect business activities as for how high the rates
are in a particular area.
Most businesses borrow money to pay for expansion projects, to

upgrade their equipment or machinery or to develop new products.
They may borrow several thousands or millions of pounds. If a
business such as Tesco borrows £1,000,000 for an expansion project.
It aims to repay the money over five years at 10% interest and knows
that it its sales are on target it can afford to do this.
If, during the five years, interest rates are 12%, then the cost of the
loan is greater. At the end of year 1, if interest rates are 12%, then
interest for that year is now £120,000 not the £100,000 which was
calculated originally. If at the end of year 2, interest rates have
increased again, then the cost will be even higher. The business either
has to repay more money than it forecast each year or arrange to
repay the loan over a longer period.
The problem for many businesses is that increases in interest rates will
also affect the behaviour of other businesses and consumers. Many
people have mortgages which become more expensive if interest rates
rise. This leaves people have mortgages which become more
expensive if interest rates rise. This leaves people with less money to
spend. People are also less keen to borrow money to make expensive
purchases when interest rates are high.
Businesses are also affected if interest rates fall. In this case, the
original loan will cost less and sales may increase at the same time.
For this reason, most businesses prefer interest rates to be low.
Changes in prices
Prices of goods and services can increase or fall. If the general level of
prices is rising, this is known as inflation and causes problems for both
businesses and individuals. People on fixed incomes cannot keep pace
with the increasing cost of living because the goods they need are
more expensive. People who work often expect employers to give
them pay rises each year to cope with the increase. Trade unions often
bid for pay rises to match any rises in the cost of living.
Businesses such as Tesco are likely to find that taw material prices
have increased. In addition, their workers are demanding pay
increases. To meet these extra costs, the business may be forced to

increase its selling process. This has three effects:
the increases may cause inflation to get worse

If the business exports goods, it may sell fewer of them because
they have become more expensive and therefore less
competitive.
Consumers may prefer to buy cheaper imports rather than more
expensive home produce goods. If sales fall because of the price,
the business may have to reduce production and lay off staff.
Therefore it is important for a country to have a stable and predictable

economy and the government will act to try to achieve this. To control
inflation the government has to take action over the factors that cause
it. These include the following:
Excessive consumer spending. If demand for goods rises more

quickly than the goods can be supplied, the prices are likely to
risk. This is because there is a limited supply of the item they
want, the producer or retailer can increase the price and, in
effect, sell the last one to the highest.
Lack of competition. This is when a large organisation, or a few
of them, control a market they can chare higher prices. In
Britain, this used to be the case with gas, electricity and
telephones, but now that there is greater competition, prices
have fallen.
Higher costs to businesses, such as high wage settlements or
increases in interest charges. Businesses try to cover these costs
by raising their prices.
Higher costs to businesses, such as high wage settlements or
increases in interest charges. Businesses try to cover these costs
by raising their prices.
Higher taxation. This is when the government increases tax on
alcohol or tobacco products or increases VAT rates this directly
affects the final price of goods.
The government can try to restrain consumer spending by increasing

interest rates, but this, as you have seen, can cause problems for
business.
Managing the national economy
The management of the UK economy is shared between the

government and the Bank of England. The government of the day is
expected to manage the national economy so that:
Businesses can confidently plan their future activities

Customers can plan their spending and saving activities.
Stability is mainly achieved in three ways:

The government and the Bank of England decide on specific
targets they wish to achieve. They publish these so that
businesses such as Tesco and consumers know the aims of the
government
They constantly monitor the state of the economy against these
targets and take action such as increasing or lowering interest
rates.
They avoid drastic action wherever possible. This is to prevent
undesirable side effects occurring too quickly.
Many business activities can have damaging effects on the quality of

the local and national environment. As a result, laws have been made
to prevent, wherever possible, damage to people responsible
businesses often set higher standards for themselves. Business
activities can cause a variety of environmental problems. These are:
Air pollution
Noise pollution
Water pollution
Wasteful use of resources
Air pollution
Air pollution occurs when substances which are harmful or dangerous

to humans or to the environment are released into the atmosphere.
For example, processes in industries such as power stations and
cement works create harmful emissions which are released into the
air. Another major cause of air pollution is traffic. Cars and lorries emit
a variety of pollutants which can significantly affect air quality in an
area.
Laws control the type of emissions allowed by industry and vehicles.

Every time a vehicle undergoes an MOT test, emissions equipment
analyses the exhaust gases. To pass the test, dangerous emissions
such as carbon monoxide must be within a certain limit.
The environmental protection Act 1990 regulates air pollution by

industry. This act states air pollution by industry. This act states that
manufacturing processes should be:
Operated using the best available techniques without leading to

excessive costs.
Operated in a way which minimises the environmental impact on
air, water and land.
The act divides manufacturing processes into:
Significant emissions from major processes – these relate to

about 3,000 manufacturing plants in the UK and are monitored
and authorised by the Environment Agency
Less significant emissions – these are monitored and enforced by
local authorities and cover approximately 20,000 industrial
processes.
The Pollution Prevention and Control Act 1999 covers businesses not
regulated under the Environmental Protection Act. It also covers
several new areas, such as energy, water and raw material efficiency,
waste minimisation and recovery, in addition to minimising pollution.
Noise pollution
Environmental Protection Act also covers that businesses are not to

produce lots of noise which the day and night which may disturb the
local community. If they are, the local council will investigate the
matter, they will send an Environmental Health office down to see if
the noise is loud enough to disturb the local community, if it is they
will try and solve the problem. If it does not stop the Environmental
Health Office can send them an abatement which states that the noise
must stop, and ways of how it can be stopped otherwise if it isn’t
improved the owner will be given a criminal offence and taken to
court. There could also be a fine.
Water pollution
Since 1999, the Environmental Agency has recorded and classified all
water pollution incidents. Water pollution occurs when undesirable or
hazardous into rivers, lakes or the sea. Legislation strictly controls the
substances which can be discharged in Britain. Under the Control of
Pollution act 1974 it is an offence, without consent, to allow the
discharge of any pollutant in controlled waters. Businesses must also
check location and routes of drains used to take away storm and
surface water and ensure no pollutants enter them. The groundwater

Regulations 1998 also restrict activities such as the storage of
chemicals which could result in the pollution of groundwater.
Wasteful use of resources

All businesses such as Tesco use resources such as water, energy,
paper, glass and other materials. The aim of resource management
and waste minimisation is to reduce and refuse waste. This can be
done by:
Operating more efficiently to minimise waste

Recycling waste materials
Disposing of dangerous or special waste responsibility and
according to the law.
Waste minimisation
Businesses may undertake an environmental audit to monitor how

they are using resources, the result of which shows them where
improvements need to be made. An audit can involve:
Checking the resources need in producing processes to reduce

waste by reusing resources where possible and to avoid the use
of environmentally harmful materials
Reviewing the production process to use clean and eco- efficient
techniques
Assessing the design of products to make the best use of raw
and recycled materials
Assessing the use of energy to ensure efficiency. For example,
checking insulation and heating levels and turning of equipment
when not in use.
Assessing usage of water to ensure efficiency. For example,
reusing water in the production process.
Reviewing the amount and type of packaging used to reduce the
quantity and to ensure the use of recyclable materials
Checking the ordering and storage of materials to minimise
waste and deterioration
Monitoring the disposal of waste materials to ensure these are
dealt with appropriately.
The Packaging Regulations affect companies which pack or fill products

with packaging and aims to minimise the amount of packaging used
and to increase the amount that is recycled.
Dealing with waste
Most efficient business will produce some waste materials. Some of

these will be hazardous substances known as special waste.
Most waste is dumped in landfill sites. The 1999 European Union

Landfill Directive restricts the type of waste which can be put in landfill
sites such as biodegradable waste and requires other types of waste to
be pre-treated. The aim is to reduce the amount of waste being
disposed of in this way through increased recycling and the proper
disposal of hazardous materials, which normally involves incineration.
A landfill tax is imposed on all waste disposed of at licensed landfill
sites to encourage industry to change to more environmentally friendly
methods of disposal.
Various laws control the disposal of waste. The Special Waste

Regulations 1996 control the disposal of toxic or hazardous materials
such as chemicals. In addition, the Environment Agency regulates
waste management through a licensing system Under the
Environmental Protection Act 1990, all businesses must ensure that
their waste is stored safely and disposed of by someone who is
authorised to take it and deal with it.
Swot analysis for Tesco Clubcard service
Strengths of Clubcard Weaknesses of Clubcard
– After the launch of – Lot of research must be

clubcard in 1995, it bought conducted regularly to see
Tesco closer to its competitors’ activity.
customers as it was easy
to identify customer
shopping behaviour. – ICT is very important to
clubcard system, it would
– One of the sophisticated not be feasible to run it
databases in Europe. manually, and therefore
employees must be trained
– Customer can receive accordingly.
quarterly mailing with
points based vouchers &
other special offers and
discounts vouchers too.
– Clubcard magazine is also
sent.
– Data collected on clubcard

is valuable information to
management.
– 10 million active
– Clubcard magazine is now

the largest circulation
magazine in the country.
Opportunities of Clubcard Threats of Clubcard
– Points can be earned at – Other Competitors such as,

various other Tesco Sainsbury Reward card,
services such as Tesco Boots advantage card,
Direct & petrol station etc, W.H.Smith Clubcard, Home
base save and spend card,
– Clubcard has extended to
Ireland and Tesco Vin plus – All customer details
store near Calais. recorded must be kept
confidential. Tesco must
– Tesco clubcard popularity commit to protect the
is growing due to the privacy of all clubcard
opening of more Tesco members and information
stores, such as Tesco must be never supplied to
express etc. other companies, they
must comply with the data
– Tesco is now developing a protection law.
new way to collect and
earn points through mobile
phone; this can be an
opportunity for customers
to collect points in a new
way.
Competitor analysis for Tesco Clubcard
Below you can see a diagram of ‘Porters 5 Forces.’
The Porters 5 forces is an approach to examine competition, as you

can see above the five factors determines the performance of Tesco
Clubcard according to competition.
Rivalry among existing competitors:
First of all the rivalry amongst existing firms shows the form of
competition, the head to head rivalry between firms offering similar
loyalty cards, below you can see a table showing competitors of Tesco
who has their own similar loyalty cards.
Figure showing Tesco competitors who has their own loyalty card
scheme -1999-2004
Grocery schemes:
Tesco Clubcard
Sainsbury’s Reward Card
Co-op Dividend/other Co-op card
Any other grocery retailer scheme
Non-grocery schemes:
Boots Advantage Card
WH Smith Clubcard
Homebase Spend & Save Card
The Body Shop People Reward Card
Any other retailer loyalty card
Multi-issue schemes:
Argos Premier Points Card
Nectar
Store cards:
Marks & Spencer Account Card/&More card
Debenhams Account Card
John Lewis/Waitrose Account Card
Bhs Gold Card/Choice
House of Fraser FraserCard
Any other retailer payment card/store card that offers points
The rivalry between these companies can be intense or it may be

governed by unwritten agreements that help the industry to avoid the
damage that excessive price cutting, advertising and promotional
expenses can inflict on profits.
Threat of entry:
This is the threat that involves in entering a new market, if it is easy to

start a business or enter into a new market, as soon as the profits
looks attractive, new firms will arrive. Industries are relatively easy to
enter if there are no large set up cost, patents or copyrights. Therefore
it can be seen that after Tesco launched its clubcard, the above
competitors also launched their loyalty scheme, this shows the threat
of entry is low.
Threat of Substitutes:
A substitute is something that meets the same needs as another

product or service, in this case Tesco only has one loyalty scheme
which is their clubcard so there is no other substitutes to choose from,
however Tesco competitors has loyalty schemes, so if customers find
that more attractive they can switch to substitute loyalty schemes and
start to shop at Tesco competitors. So if the substitute becomes more
attractive in terms of price, performance or both, then buyers will be
tempted to move their custom.
Power of buyers:
Powerful buyers can bargain away potential profits, they can cause
firms to undercut each other to gain the buyer’s business and they can
use their power to extract other benefits, such as quality
improvements or credit terms. Buyers tend to be powerful when there
are relatively few of them buying a large proportion of the total output.
Power of suppliers:
In a similar way, suppliers of vital resources to an industry can extract

high prices from their competitors; this would not be linked directly to
clubcard as it deals with, supplying raw material, power, skilled labour
and components.
Product Life SWOT PESTLE Analysis

Cycle Analysis
Strengths of – Helps Tesco – Helps – Helps Tesco

the Market managers Tesco managers
analysis see what analyse see the

techniques stage the the external
clubcard is strengths, environment
on, so weakness in which
further es, Tesco is
decisions opportunit operating.
can be ies and – Find out the
made threats. factors that
accordingly. – Helps to can affect
– Helps you come up production.
to with – Deals with a
understand strategies large amount
what stages after of factors
Tesco analysing such as,
clubcard will the political,
go through. companies economic,
– Further ’ social,
promotions weakness technological
and es & , legal &
advertising threats. environment
can be al.
conducted
after
analysing
plc.
– Assess the
potential of
Tesco
clubcard.
– Helps
managers
to see
which of its
current
products
receive
more or less
investments
– Uses this to
devise new
service
plans.
Weaknesses
of the – Not – Cannot – Can’t rely
Market necessary rely 100% 100% on
analysis that all on the this as it
techniques products SWOT doesn’t
will go analysis. cover
through the internal
product life strengths &
cycle as weaknesses
stated on for example.
the
diagram.
– Can’t rely
100% on
theory, as
the diagram
is just a
marketing
tool.
Strengths of Competitor Weaknesses of competitor

analysis tool analysis tool
– Helps determine the level – Cannot rely 100% on the

of competition in the tool as its only theory.
industry. – Sometimes you cannot see
– Helps you to identify your the full picture on a theory.
competitors.
– Helps you to come up with
strategies against
competitors activities.
– Helps to contrast a
competitive environment.
Businesses should use a combination of marketing analysis tools, as if

they only use one that particular tool will concentrate on one particular
area, therefore in order to successfully analyse your company and
product, it is important to use a combination of market analysis
techniques in order to see all aspects. For example if a company only
used a SWOT analysis then it would only be able to see the strengths,
weaknesses, opportunities and threats, therefore if it uses other tools
as well, such as product life cycle, PESTLE analysis etc, it will get a
better idea of the internal and external environment.
Managers of Tesco must keep a constant eye out on the market by

carrying out a regular SWOT checks. A SWOT analysis is a review of
internal and external factors
Businesses can use five forces as this will help the marketer to
contrast a competitive environment. This technique has similarities
with other tools for environmental audit, such as PEST analysis, but
tends to focus on the single, stand alone, business or SBU (Strategic
Business Unit) rather than a single product or range of products. For
example, Dell would analyse the market for Business Computers i.e.
one of its SBUs. Five forces analysis looks at five key areas namely the
threat of entry, the power of buyers, the power of suppliers, the threat
of substitutes, and competitive rivalry.
It is very important for a business to consider a PESTLE analysis as it’s

made up from:
1. The internal environment e.g. staff (or internal customers), office
technology, wages and finance, etc.
2. The micro-environment e.g. our external customers, agents and
distributors, suppliers, our competitors, etc.
3. The macro-environment e.g. Political (and legal) forces, Economic
forces, Sociocultural forces, and Technological forces. These are known
as PESTLE factors.
A marketing strategy is a marketing plan designed to achieve

marketing objectives. For example, one of the marketing objectives for
Tesco relates to becoming the market leader by delighting customers.
The strategic plan therefore is the detailed planning involving
marketing research, and then developing a marketing mix to delight
customers. Every organisations needs to have clear objectives, and the
major route to achieving organisational goals will depend on strategy.
It is important, therefore, to be clear about the difference between
strategy and tactics.
Marketing can therefore be seen as the process of developing and

implementing a strategy to plan and coordinate ways of identifying,
anticipating and satisfying consumer demands, in such a way as to
make profits. It is this strategic planning process that lies at the heart
of marketing.
How has Tesco Marketing Strategy involved?
Tesco Marketing strategy has undergone a major change in the last

twenty years, today the object of product promotion is to generate
press interest in new products and services, and this is done through,
press releases, media campaigns, product launches and special events.
Tesco uses marketing strategies to help market their products and

services, there are five main different types of marketing strategies:
1) Ansoff’s Matrix
2) Development of Product life cycle analysis
3) Differentiated marketing and the product life cycle
4) Segmentation, targeting product positioning & plc
5) application of the marketing mix
Ansoff’s Matrix
Ansoff’s market Matrix is a useful way to think about different growth

strategies which applies to Tesco.
The vertical axis represents opportunities for growth in markets that

are currently being served or in the new market. The horizontal axis
considers whether Tesco would be better off putting its resources into
existing products or whether it should consider developing or acquiring
new products. The matrix provides four different fundamental
marketing strategies, market penetration, market development,
product development and diversification.
• Market Penetration – this involves selling more of an existing

product into existing markets. Possible options are persuading
current customers to use more or attracting new customer’s
altogether. This is normally only possible if a market is growing.
• Market development – entails expanding into new markets with

existing products. These may be new markets geographically,
new market sectors or perhaps new uses for the product.
• Product development – requires the organisation to develop

modified versions of its existing products so they will have
greater appeal in existing markets. By designing products closely
to the needs of existing customers so then Tesco can make a
profit.
• Diversification – putting new products into new markets, this is a

risky strategy because if Tesco diversifies it means they are
moving into areas in which it has little or no experience,
nevertheless Tesco has been very successful in its diversified
products and services, for example it diversified into clothing
which was a major success and even Tesco finances which also
succeeded.
Development of Product life cycle analysis – (brand building,

extension strategies, product mix and portfolio management)
The product life cycle is also helpful to the marketing manager of

Tesco as it suggests that certain type of marketing activity are
appropriate at different stages of a product’s life.
Brand building is also important in the growth stage for Tesco, as the
acquisition of a significant market share during this phase will generate
profits in the long term. When the product enters the maturity and
saturation stage, it will be the strong brands that will dominate the
market and today Tesco is the most dominant retailer in the UK,
overtaking Sainsbury. In addition if Tesco product enters the decline
stage and if sales are falling, it will be the strong brand like Tesco that
will survive and produce profit.
It is possible for the marketing manager of Tesco to take actions to

prolong the maturity stage or even to stimulate new growth in the
market by adopting product life extension strategies.
Therefore Tesco needs a balanced product portfolio, capable of

sustaining it satisfactorily into the future. The ideal portfolio should
contain neither too many new nor too many declining products.
Differentiated marketing and the product life cycle
Due to limited resources, competition and large markets, it can

sometimes be difficult, ineffective and inappropriate for organisations
to sell to every segment. For the sake of efficiency, they must select
some target markets, managers may choose one of the marketing
options from the following:
1) Undifferentiated strategy – aims to produce a single product and

acquire as many customers as possible, however segmentation
is ignored.
2) Concentrated marketing – attempts to produce the ideal product

for a segment in the market e.g. Rolls Royce.
3) Differentiated marketing – tries to introduce several versions of

a product e.g. Tesco finances has different financial accounts
aimed to suit every target market and Tesco clothing, Tesco sells
clothes for men, women and children. Tesco is very successful in
meeting every need of its target market.
Segmentation, targeting product positioning & plc
An important concept that affects the length of a product’s life in the

market is the product’s positioning. This means finding out the crucial
product features that are important to consumers, and designing the
product accordingly. The most successful products are the ones which
compared with competition match consumer’s requirement best; these
products will have a longer product life.
One example of this Harrods department store because, its positioned

as one of the London’s most exclusive department store. In order to
reinforce this positioning with its target market, Harrods makes sure
that its product ranges, its staff expertise, its displays and the overall
atmosphere in the store are all of high quality. Therefore it is the best
in its class and will as a result have a longer product life than other
stores. In simple terms, the best products in a particular market will
have a longer life cycle.
Application of the marketing mix
The marketing mix provides an excellent framework for developing

marketing plans or strategies that meet the needs of consumers. The
marketing mix consists of
• product
• place
• price
• promotion
The product is one of the most important factors as if you have

nothing to sell then you are not going to make a profit, therefore the
product is the key ingredient in the successful development of a
successful marketing mix.
Place describes how the consumers can obtain the product, whether its
through retailers or wholesalers.
The main objective of pricing as with the other elements of the

marketing mix is to produce the required level of sales so that the
organisation can achieve its objective as it is excellent customer value
that attracts customers and generates sales.
The tools available for promotion includes, customer service, branding,

public relations, sponsorship, personal selling, direct marketing,
corporate image development and after sales service. These options
must be balanced out and blended together to ensure the maximum
numbers of consumers are exposed to the promotional message at the
lowest cost.
Tesco’s strategy
Therefore it can be seen that Tesco uses differentiated strategy as

they have products and services to meet the needs and wants of every
individual consumer.
Differentiated marketing attempts to introduce several versions of a
product to meet individuals need. Tesco uses this strategy and has had
very successful results, for example it sells clothing items at a very
reasonable price which is targeted at men, woman and children.
Another example of Tesco using differentiated strategy is
Tesco finances, Tesco have different financial accounts aimed to suit
every target market.
The marketing strategies used by Tesco are:
• Differentiated strategy
• Ansoff’s Matrix
• Development of Product life cycle analysis
• Differentiated marketing and the product life cycle
Differentiated strategy:
The marketing strategy which is used by Tesco is ‘Differentiated
strategy, it can be seen that Tesco uses differentiated strategy as they
have products and services to meet the needs and wants of every
individual consumer, as they stock and sell a wide range of products
and services in its stores.
Differentiated marketing attempts to introduce several versions of a

product to meet individuals need. Tesco uses this strategy and has had
very successful results, for example it sells clothing items at a very
reasonable price which is targeted at men, woman and children.
Another example of Tesco using differentiated strategy is
Tesco finances, Tesco have different financial accounts aimed to suit
every target market.
The use of differentiated marketing strategy will increase demand for

the company because, there is a wide range of products sold in Tesco
and when customers go in the store they are bound to find something
to meet their needs and wants, therefore the use of a differentiated
strategy will increase demand for the company as the customers will
end up buying something due to the large range of products and
services available to choose from.
Ansoff’s Matrix
Ansoff’s market Matrix is a useful way to think about different growth

strategies which can also apply to Tesco. The Ansoff’s matrix is
viewed in a grid with the following four different fundamental
marketing strategies, market penetration, market development,
product development and diversification.
• Market Penetration –This is normally only possible if a market is

growing and as a retailer Tesco is always growing and is has
overtaken Sainsbury to be the number one supermarket chain.
This strategy is likely to increase demand for Tesco as it involves
selling more of an existing product into existing markets.
Possible options are persuading current customers to use more
or attracting new customer’s altogether, Tesco is very good in
promoting their services and products with advertisements and
one example is a loyalty card which binds the customer together
with Tesco. Tesco is also very good in persuading existing
customers to purchase new products or services introduced, for
example consumers who do their weekly shopping at Tesco are
also now purchasing Tesco insurance. Therefore because of
attracting new customers and advertising successfully to existing
customers Tesco can increase demand.
• Market development – entails expanding into new markets with

existing products. These may be new markets geographically,
new market sectors or perhaps new uses for the product. Tesco
is trading world wide which increases demand; it also trades all
around Europe and Asia which makes them very successful in
terms of a global retailer.
• Product development – requires the organisation to develop

modified versions of its existing products so they will have
greater appeal in existing markets. This is done very well by
Tesco, for example Tesco has their economy range of food which
is also very successful and in addition it sells a wide range of
other brand products as well. By designing products closely to
the needs of existing customers can increase demand.
• Diversification – putting new products into new markets, this is a

risky strategy because if Tesco diversifies it means they are
moving into areas in which it has little or no experience,
nevertheless Tesco has been very successful in its diversified
products and services, for example it diversified into clothing
which was a major success and even Tesco finances which also
succeeded. If diversification is successful then it can create
demand for the company.
Development of Product life cycle analysis – (brand building,

extension strategies, product mix and portfolio management)
The product life cycle can increase demand for Tesco as it can show
the marketing manager what stage Tesco products are at and whether
it has reached maturity stage or how well the product is doing.
Brand building is also important in the growth stage for Tesco, as the
acquisition of a significant market share during this phase will increase
demand for Tesco. When the product enters the maturity and
saturation stage, it will be the strong brands that will dominate the
market and today Tesco is the most dominant retailer in the UK,
overtaking Sainsbury. In addition if Tesco product enters the decline
stage and if sales are falling, it will be the strong brand like Tesco that
will survive and produce profit.
Extension strategies and brand building is used by Tesco for example,

that Tesco sells their own label product and services for a cheap price
compared to other products which are sold in store, for example
Tesco’s own brand cornflakes compared to kellogs cornflakes. This is
done by Tesco so it can give their customers more value for money;
however it can be seen that this can also have a negative affect on
Tesco as they can lose out on profit but de to bulk buying the cost is
easily covered.
Therefore Tesco needs a balanced product portfolio, capable of

sustaining it satisfactorily into the future. The ideal portfolio should
contain neither too many new nor too many declining products.
Differentiated marketing and the product life cycle
This marketing strategy can increase demand for Tesco in many ways
including:
Undifferentiated strategy – aims to produce a single product and

acquire as many customers as possible, if Tesco produces a very
successful product or service suitable for the whole target market then
demand can increase.
Concentrated marketing – attempts to produce the ideal product for a

segment in the market, for example Tesco’s economy range which is
not designed for wealthy people who strongly believes in image. The
economy range is designed for teenagers or students at universities
whose first priority is not image but in fact its cost.
Differentiated marketing – tries to introduce several versions of a

product e.g. Tesco finances has different financial accounts aimed to
suit every target market and Tesco clothing, Tesco sells clothes for
men, women and children. Tesco is very successful in meeting every
need of its target market.
The table below shows the advantages and disadvantages of the

following strategies used by Tesco:
• Differentiated strategy
• Ansoff’s Matrix
• Development of Product life cycle analysis
• Differentiated marketing and the product life cycle
Advantages of Disadvantages of
Differentiated strategy Differentiated strategy
There is a wide range of Large range of products can

products and services sold in cause confusion for the
store. customers.
Profit level for the company can Customers can buy the wrong
increase as consumers have a product due to the confusion
wide range of products to choose from the wide range of display
from, as when they come in the and then the customer will come
store they will find at least one in for a refund which will be a
product to suit their needs and lost for the company.
wants.
Putting new products into new
By Tesco producing their own markets, this is a risky strategy
value products increases the because if Tesco diversifies it
range of products available at means they are moving into
Tesco. areas in which it has little or no
experience.
Advantages of Ansoff’s Disadvantages of Ansoff’s

Matrix strategy Matrix strategy
In terms of marketing In terms of market penetration

penetration this strategy is likely this is only possible if Tesco is
to increase demand for Tesco as growing, if the company starts to
it involves selling more of an make a loss then there will be
existing product into existing problems.
markets
In terms of market development In terms of market development
it is very good for the company it can be very risky to trade
to trade internationally as it can abroad especially globally as a
give them a strong brand name lot of market research must be
and increase profit levels. conducted.
In terms if diversification it is In terms of diversification which
very good to expand into other can sometimes cause problems if

market in order to build market you have not done your research
share and increase profit. before going into other markets.
Development of Product Development of Product
life cycle analysis strategy life cycle analysis strategy
The product life cycle can
increase demand for Tesco as it Tesco needs a balanced product
can show the marketing portfolio, capable of sustaining it
manager what stage Tesco satisfactorily into the future as if
products are at and whether it its not balanced then problems
has reached maturity stage or can be created.
how well the product is doing.
Brand building is also important The ideal portfolio should contain
in the growth stage for Tesco, as neither too many new nor too
the acquisition of a significant many declining products.
market share during this phase
will increase demand for Tesco
Extension strategies and brand Extension strategies and brand
building is used by Tesco for building can have a negative
example, that Tesco sells their affect on Tesco as they can lose
own label product and services out on profit, if they decrease
for a cheap price compared to there prices too much.
other products which are sold in
store.
Differentiated marketing Differentiated marketing
and the product life cycle and the product life cycle
strategy strategy
In terms of Undifferentiated In terms of Undifferentiated
strategy, Tesco aims to produce strategy, this is not always
a single product and acquire as successful as not every target
many customers as possible and market will like this one product
if they are successful then Tesco produced.
can make a lot of profit.
In terms of Concentrated In terms of Concentrated
marketing Tesco aims to marketing, it is not necessary
segment their products for that segmentation can work for
example their value range is not example a person who’s main
aimed at wealthy people but to concern is not price may still
people who’s main concern is purchase a value range product
price, this is a good way to as they might like the taste of
segment customers, in order to the product, therefore

meet their needs and wants segmentation can not always
work.

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Unit 1 – Investigating Business

Business Aims and Objectives

An aim is a goal the business wants to achieve. For example to make a

All businesses aim to provide goods and/or services, either to their

These are some examples of aims of a business:

Unit 1 – Investigating Business

A business such as Tesco also needs some way of measuring their

Sell more products than its competitors in order to increase their

Below you could see what Tesco aims to provide to the:

Mayur Patel Exam No: 2272 Centre ID: 13216 Page 2

Unit 1 – Investigating Business

Tesco’s main aim will be to provide a good service to all customers,

Another of Tesco’s aims is to look after their customers as customers

Mayur Patel Exam No: 2272 Centre ID: 13216 Page 3

Unit 1 – Investigating Business

Tesco also aim to understand their external customers needs better.

Good value products

Tesco aim to be enthusiastic towards their customers and help them

Mayur Patel Exam No: 2272 Centre ID: 13216 Page 4

Unit 1 – Investigating Business

to be as strong in non-food as in food and to follow customers into

Tesco’s main purpose is to create a value for customers to earn their

This is expressed as two key values:

The customers can get what they expect from Tesco

A great place to work

To be treated with respect

The way we work

Tesco try to get it right first time

Unit 1 – Investigating Business

Tesco always try to save time and save money

Tesco focuses on 4 main areas, which it aims to improve in the future.

A strong UK market. The UK is the core market if the Tesco

Mayur Patel Exam No: 2272 Centre ID: 13216 Page 6

Unit 1 – Investigating Business

Turkey 2003 8 0.6 12

China 2004 39 3.5 12

Japan 2003 111 0.3 10

Malaysia 2001 13 0.9 4

South 1999 62 4.1 47

Taiwan 2000 6 0.5 42

Thailand 1998 219 6.8 207 Nokia

Mayur Patel Exam No: 2272 Centre ID: 13216 Page 7

Unit 1 – Investigating Business

The union of the mobile communications, information technology and

Mayur Patel Exam No: 2272 Centre ID: 13216 Page 8

Unit 1 – Investigating Business

As Nokia maximise on phone sales, their income would increase as

As Nokia aim to continue to do this, Nokia’s three main strategies are

expand mobile voice

Drive consumer mobile multimedia

Unit 1 – Investigating Business

Bring extended mobility to enterprise

Nokia intend to capture profitable segments of the commercial market

Nokia also have objectives which can improve the business

Nokia Business Group Structure

Mayur Patel Exam No: 2272 Centre ID: 13216 Page 10

Unit 1 – Investigating Business

Nokia comprises three business groups:

Mobile Phones connects people by providing expanding mobile voice

Multimedia gives people the ability to create, access, experience and

Enterprise Solutions offers businesses and institutions a broad range