Business Studies Report - Tesco.

Business Studies Report

Tesco.

I have been asked to produce a business report on a company of my choice. I have been required by my teacher to complete this task in order to assess how I gather and present information from different sources. The majority of the information I have acquired is from the Tesco website (), however I did also have some background knowledge, and I read some previous articles about the company in press releases and magazines.

The focus of the report is to find out about the company’s history, its aims and objectives, it’s current and any previous legal statuses.

Jack Cohen founded Tesco in 1924. He began by selling groceries on a market stall in London, and the brand name was first only printed on bags of tea. The first Tesco store was opened in Edgwell in 1929 as a partnership with T E Stockwell. In the 1930’s Tesco opened the first self-service supermarkets in America and by employing less staff they could offer lower priced goods to the public. In 1947 Tesco became a PLC (public limited company) and floated its shares on the stock exchange at a value of around 25p per share. By the 1960’s Tesco had branched out into the sale of non-food produce. In 1979 Tesco annual turnover reached £1billion. By 1995, Tesco had become the largest food retailer in the UK, and is now market leader with a market share of more than 17%.

The mission statement of Tesco is all about customers: ‘creating value for customers to earn their lifetime loyalty. No one tries harder for customers; treat customers how you would like to be treated’.They have four main aims and objectives:

Core UK business: Our strategy of providing exceptional value and choice for customers ensures that we continue to grow market share.
Non-food business: We now have a 6% market share. Our goal is to be as strong in non-food as we are in our food products.
Retailing services: As customers' shopping habits change, we aim to change and respond ...

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The mission statement of Tesco is all about customers: ‘creating value for customers to earn their lifetime loyalty. No one tries harder for customers; treat customers how you would like to be treated’.They have four main aims and objectives:

Core UK business: Our strategy of providing exceptional value and choice for customers ensures that we continue to grow market share.
Non-food business: We now have a 6% market share. Our goal is to be as strong in non-food as we are in our food products.
Retailing services: As customers' shopping habits change, we aim to change and respond by providing new products and services. We aim to remain as the worlds largest grocery e-tailer.
International: Tesco has successfully opened up new growth markets in Central Europe and Asia. The proportion of total Group space outside of the UK was 49% at the 2003/2004-year end. We aim to expand our operating stores in the Czech Republic, Hungary, Poland, Republic of Ireland, Slovak Republic, Turkey, Japan, Malaysia, South Korea, Taiwan, and Thailand.

The business is currently a public limited company selling shares on the stock exchange for about 286.00p per share. It is located in the FTSE 100, and employs around 195,000 people in the UK, 41,000 in the rest of Europe, and 24,000 in the rest of the world. The company operates on an international basis and sells everything from food, to clothing, electrical goods, and even financial services such as loans and insurance. The products are aimed at everyone; toys for children, clothing for adults, and wheelchairs are provided in store for the elderly/disabled.

Tesco run their business through a board of directors; the board ensures that no individual dominates decision making in the company. The company has executives that own large shares of the business, and non-executives that are nominated shareholders, who have been elected to take part in the decision making process that the company participates in. Both the executives, and the non-executives on the committee must approve any proposed plans for the business before they can be given the go ahead.

Tesco had an annual turnover of £33,557,000,000, and an underlying annual profit of £1.832billion in the 2003-2004 financial year.

Analysis

We can see from the profit of the business that over its 80 years of trading has become a very successful company. One of the reasons the company has become so successful is its ability to expand into new areas of customer interest to keep the market on its feet. Customers no longer have the lifestyle with lots of time to shop all over so Tesco have identified the need to sell everything under one roof. They have changed with the trend and as a result have become the leading supermarket in the UK.

I think the company is run well through the board of directors because it eliminates the bias that a company run solely by the actual owners for the purpose of making profit creates. It allows different viewpoints to be expressed clearly and choices to be reasoned thoroughly before they are finalised. I think if the business continues to run as it does at present and keeps on its toes to provide full customer satisfaction, then it will remain one of the best supermarkets, and continue to be successful all over the globe.