For my GCSE business studies I have to make a portfolio investigating two contrasting businesses -Tesco and Richer sounds.

In objectives both companies are mainly similar like: they both want their customer service to be at a good level and to understand their customers better than their competitors

Activity

The both companies are totally different to each other, but there is only one similarity that Tesco also sell some particular electronical products such as Hi-fi, DVD players and VCR’s but still there is a major difference cause Richer sounds does not sell groceries daily life products such as: Food

Ownership

In ownership there are many similarities such as they both have benefits of limited liability, there are many shareholders so the amount on expansions can be greatly increased and also have to publish annual reports. The major difference between the two companies is that Richer Sounds is an unlisted public company whereas Tesco is only a public company

Location

With a particular chosen businesses Tesco is located in Barking near the A406 which has a lot of trade pass and also has a large amount of parking space and Richer sounds is located in the London city near the London bridge where there are lots of people and tourists walking around the trade pass for Richer sounds is better and so the similarity is that the both location has a good trade pass

Improvements that can be made in each of the business

Tesco

Aims and objectives

I personally think that Tesco should improve in their aims and objectives if they want to stay longer at the 1st position such as: aim to give more offers and better value of price which can be afforded by all the middle-class people for this aim to succeed Tesco’s objective could be to produce another department which consults on what offers to be started and what to be ended so it can be easy for Tesco to achieve its aims

Activity

Now that Tesco has even started with non-food business, Tesco should invent some money and start selling more varieties of children games and consoles and should have a special section for.

Ownership

Tesco’s ownership gives a lot of advantages and few disadvantages but I personally think it is a good idea of being a public limited company cause you can be well known, you can expand easily and also have benefits of limited liability

Location

Tesco should try and find the best areas where there are a lot of residents but no nearby supermarkets and also set research on the area where they are building another Tesco with questionnaires which can help them to build a store at that location or not

Richer Sounds

Aims and objectives

I think that Richer Sounds should aim to be well known by people like Tesco is well-known for this its objective should be advertising itself on the T.V, Radio and Billboards. Advertising the stores can also them more customers coming to them then going to their competitors as Richer Sounds are the cheapest in selling electronical devices

Activity

As Richer Sounds specializes on electronical devices I think they should invent money and also sell imported electronical equipments and spares, which will also attract customers from further places

Ownership  

Richer Sounds have done a good thing in being unlisted public company so that their shares wont are in sale at the stock exchange

Location

This is the main part which the company should make a change in. it should also open in more places where people can know about the business for example; a person would not know about Richer Sounds if they don’t live near the city and don’t often go to the city so for that reason it should also open in wider places

Functional Areas

Introduction:

Functions are used to keep a company keep their records and improve their service by asking their customers their wants and how it could be improved.

There are seven functions in a business, which are:

1. Customer Service – provides information advice and after-sales service and deals with customer complaints. 

2. Operations – is responsible for producing goods and services by making the best of use of resources.

3. Finance – is responsible for checking the money going out and in of a business.

4. Research & Development –concerned with technological and scientific.

5. Human Resources – relates to the people who work for the organization.

6. Marketing & Sales – responsible for making sure customers that customer know about the business.

7. Administration & IT support – all businesses receive information daily, in many different ways.

For one of the businesses I have to choose any three functional areas and describe how they are used in that company. So I have chose Richer Sounds as the business and the three functional areas are purchasing department, Operations department and marketing department

Purchasing Department in Richer Sounds

The purchasing department is responsible of buying all the stock sold in Richer Sounds. Nick Halliday is the purchasing director, and he works closely with the sales director, Steve Parker. All the colleagues who work in Richer Sounds assist them

The most difficult job for purchasing department is to think what product would people want to buy in the next two to six months. Purchasing then tries to find out where to purchase it from at a competitive value. This means that buying a price, which can enable some profit, and also be lower price than its competitors.

The responsibilities of the Purchasing department

1. Ordering all the stock needed from the suppliers
2. Maintain good relationship with the suppliers
3. Check the delivery booking form
4. Chasing up for the late deliveries
5. Informing suppliers if there is any items left out or damaged product
6. Deciding at what price the product should be sold
7. Solve all the problems when there are delays and supply problems
8. Looking at what products are running out and what products don’t sell
9. Checking the stores ‘competitor checklist’ to see whether there is a lower price of a same product at its competing stores

Warehousing and distribution

The companies’ distribution director is Solomon Essah Essel. He and his colleagues are responsible for the storage of stock received by the supplier and also distributing it to the stores

1. What happens when the stock is received in the warehouse?

After the Purchasing department orders the stock needed, the supplier or the transport company phones the distribution department for booking in the delivery date. Distribution department then fills in the booking form that gives the details such as:

• The date and the time of the delivery
• The supplier
• The type and volume of goods being delivered

This is then faxed to the purchasing department, which agrees to the delivery date and time with the supplier or the transport company. Richer Sounds use methods of communication to prevent any problems or delays if there is any fault with the computer system

Each delivery comes with its own delivery note giving a list of products ordered and quantities. The warehouse colleague then checks the delivery note with the delivery. Then it is signed by the colleague and counter signed by the delivery driver. TwoWay then completes the goods receipt note and faxes it off with the delivery note to the stock control department. Stock control then enters all the product names on the computer and notifies purchasing if there is any mistakes  

2. How we store our goods?

The warehouse is situated in the northwest where there are good links to the motorway and the place is secured 365 day a year. There is a regular patrol with dogs. The whole site is CVCTV monitored and all the vehicles entering into the warehouse have to show there permit card before entering the main gate

The warehouse is 7,500 sq metres and about 75%of that space has racking for all the stock to be placed. There are 10,900 racking space and normally 99% of it is filled with stock. They put all the fast-lines of stock in the front so that they don’t have to go right back to find it. All the goods are moved by the electric fork lift trucks.

The warehouse is also secured. It has 24hr CCTV recording, 24hr ADT security monitoring, BT Red care and also a 24hr fire sprinkler system.

3. How we distribute our goods to the stores?

The stores send off their orders to the store operations every Friday. They then check all the order in their main stock database. These orders are then delivered by the TwoWay drivers between Tuesdays to Friday, in that following week. Each store has its specific day and time delivery This is good to be know so that all the colleagues in that store can get ready to receive the good s and store them safely in the stock room.

All the stores will then know if the ordered list is correct because they will receive an electronic internal invoice for the items they have ordered. The driver waits until the colleagues count all the large units.

How Purchasing, Warehouse, Distribution use IT

• The main use is to cheek all the stock levels
• Both departments us IT to send emails to each other
• Analysing the reports
• Purchasing uses IT to send the orders

Store operations at Richer Sounds

Jez Avens is the deputy MD of the store operations. The colleagues who work there in operations, distribution, stock control and service and repairs assist him

The responsibilities of store operations are:

• Setting each store’s budget
• Managing colleague problems
• Organising store visits to check on the stores how well they are working
• Taking actions if the aims are not being achieved
• Communicating with all stores
• Deciding how many staff should be employed at each store
• Checking that all the stores are achieving their aims

Store targets and budgets

All the stores have sales target to meet. In each store managers must ensure that the cost of running that store is not too much. The running costs of each store are its overheads. Overheads include everything from the phone bills to the salaries to the cost of stationary

Each store is then ranked on how well it mages the business and how it contributes to the company. This is calculated with a simple formula:

Contribution = cash profit minus overheads  

Therefore the store, which has the most profit after deducting the overheads, is raked at the position 1

Stores, Stock and Stocktaking

Every store is only allowed to carry six weeks of stock in their store or else the company will overhead and the overdraft of the bank increases and they pay higher

Store mangers order only the products needed and to make sure they do not run out of their fast line of products

Stocktaking

Stock control is responsible to check in every store that all the goods are counted up and checked. This is usually checked every three months with more help for the store another assistant manger from another store is sent to oversee the stock. This has two benefits such as:

1. It will be a good training for all the assistant managers, because they can also be the head of stock – control in their store
2. It is more towards security reasons because there is an impartial person involved

Usually the company checks if the stock control in a store matches with the quantity in the computer. If it doesn’t then the stock control will phone up the store mangers and fix another time to count up the products again. If there is problem still with the products then this will be informed to the operation as it would indicate shrinkage which means that it will show what items were stolen

Communicating with the stores

There are three most important, routine communications, which are:

1. The weekly report
2. The Monday morning telephone conference call
3. The store sales figures and the CSI ranking

The weekly report

This report is sent to every store usually on Thursdays or Fridays which includes topics on the product offers, price changes, special deals that the stores have to put on and also internal job vacancies

The report contains all the key information that the store needs to receive it that week. Then on that Saturday the manger go through the report with the store colleagues so that every one is clear off what important changes to make

The Monday morning call

Every Monday telephone conference calls are made to all the store managers. The directors usually make these calls and each director phones about 10 stores at a time. To place the calls run smoothly the company has placed some rules such as each person has to state his/her name before specking. In this discussion they will talk on:

• Any questions need to be asked regarding their weekly report
• The performance of that company in its previous week
• The stock levels
• Any other queries or issues

Store sales figures and the CSI ranking

Company sales figures are sent through the fax daily to all the Management Board Directors as well as to all the stores with this all the store managers can see how there store is performing. All the under – performing stores are then checked by the operations

How Richer Sounds customise individual stores

Changing the layout

Even the store mangers can make decisions without asking the operation such as resolving customer service issues, deciding how many colleagues to be needed in a store, ordering POS material or stationary or change there timings of opening and closing and also deciding on what changes to be made in the prices

Deciding the opening hour

All the managers and the colleagues can decide on the opening hours of the store according to their business. The opening hours may look like this

1. Mon –Friday = 10 am – 6pm (not including Thursdays), Thurs = 10 am - 7 pm, Sat = 10 am – 5 pm

OR

2. Mon – Fri = 12 pm – 7 pm and Sat = 10 am – 5 pm

Deciding on the prices

The purchasing sets all the prices and all the stores have to follow it unless there is a local competitor with a lower price. All the stores will know this because they have to monitor their competitors and also send in the competitors check list every two weeks which is faxed to the purchasing. Purchasing will reduce the price if there are a number of competitors offering a cheaper price

If the local competitor is cheaper to any of the stores then they must tell the purchasing department quickly so that they can reduce their products by ten pounds to the competitor’s price

Health and safety in the stores

Health and safety: Richer Sounds does not have main health and safety committee so it is taken care by the manger of the store who takes care of employees health and secure their working environment. With better and secure environment the employees will work more effectively

        Richer Sounds has given a brief explanation on their health and safety, which is

“ Health and safety standards are very important; the company is committed to provide a safe shopping and working environment for customers and employees”.

IT and stores operations

• In the stores they have the EPOS systems on the tills which all the items sold will be recorded in the main computer
• The system also enable them to maintain there customer database
• The stores operation team uses email to contact colleagues in other departments of the company

Marketing at Richer Sounds

The marketing director is Claudia Vernon, who is responsible for the marketing in Richer Sounds. She and her colleagues look at the ranges of activities which is grouped in four main areas

The main activities of their marketing department

1. Marketing – marketing is all about analysing the feedback of the customers and information on their competitors. This helps the company to decide on how to promote their products or their business

2. Design – Colleagues working in this section produce their in-store catalogue about 11 a year and also all the advertisements placed on special magazines.

3. Point-of-sale – is responsible of keeping their stores all clean and tidy plus making it look interesting and lively. This also includes the flooring, lightening, posters, fixtures and fittings. Whereas design is responsible for the creation of POS materials

The Richer Sounds website is the responsibility of marketing this includes every area of the website such as:

• The design – and to make sure it reflects the Richer Sounds image
• Sending out email and newsletters on the company.
• Checking the navigation
• Check the content is up to date and that it should include all the latest deals and offers
• Analysing the use of site

Key Customers

Before Richer Sounds only sold audio separates and so at that time the key customers were identified as only male aged 16 – 30. Today it has so much improved in technology wise and so they now sell to a fare wider range of customers – both male and female of all ages

 

1. The needs of our key customers

Their key customers want:

 

• To buy excellent value, known manufacturers and reliable products
• Accurate and truthful information that the sales person tell them
• Friendly customer service
• To shop in a clean and nice environment

Most customers rather like to visit the place then ordering it from the web or mail order, because they like to try out the products and see the products them selves

2. How we know the needs of our customers

The company constantly has market research, which helps them to know the needs of their customers.

• They analyse all the questionnaires given back from there customers which were given to them at a purchase of a product
• Richer Sounds obtain all the key information about their customers
• They receive direct feedback on all the customer comments from their stores
• They ask their customers how they heard about them

How we meet our customer needs

Richer Sounds aim to do this in the following ways:

1. Word of moth which means that what ever they tell their customers it is all truth and that wont change for example if the sales person say ‘ this product is cheaper then any other store’ and so it will be
2. Producing the informative, fun and friendly in-store catalogues
3. Encouraging the feedback from the customers and all the colleagues
4. Always trying to find out the mistakes and what improvement could be made with it

The use of IT in Marketing

• So they can analyse the customer data
• To design the catalogues using special software’s
• To produce all the documents needed such as letters
• To contact colleagues quickly by using email

How these areas work together

Examples of how these three departments work together

• The purchasing department works with the operations department for delivering the orders and so the operations can check the quantities and the products for the store if it is the same to what is ordered by the store
• Operations working with marketing for the design for the store catalogues
• Marketing working with the purchasing department if they find out that the local competitor has a cheaper price than the store
• All the analysed questionnaires from marketing are sent to purchasing if the customer needs for a product is not available at the stores so that the purchasing department orders it
• Purchasing with operations for deciding the prices of products and also purchasing with marketing to see whether that price is better value in the market or not
• Store operations with the warehouse if any product is damaged or been missing when the delivery was arrived

How they achieve their aims and objectives

These are some examples how these functions help to achieve the company’s aims and objectives:

• For providing excellent services in their stores to all the customers the operations have used a scheme of not asking ‘how they can help’ but by offering cup of tea or an ice lolly
• Surviving is an aim set by Riche Sounds for this aim this all three departments help to survive such as: purchasing asks the marketing for what products does mainly customers ask for and so they can order that one and also sell it as well with a profit, the operations help any store if they are performing well and the marketing helps to research the customer needs
• Purchasing helps the stores for developing all the audiovisual home cinema as they see goods deals which they can add profit plus being less then their competitors
• Marketing help the companies main aim of being enjoyable, lively and attractive for every customer to enter in by one of its activities, Point-of-Sale which has to keep all the stores clean and tidy plus make it more interesting for the customers.

Business Communication at Richer Sounds

Introduction

In this part of my portfolio I will explain how the Richer Sounds communicates internally and externally

How Richer Sounds communicate – and why?

At Richer Sounds they use a variety off communication methods to be able to keep in touch with all the people outside the business such as their suppliers and their customers and also with each other.

        Richer Sounds believe that it just isn’t how they speak but it is mainly important that how they say it

(Below are some examples of communication in Richer Sounds)

At Richer Sounds they:

• Never use the words ‘staff’ or ‘employees’ but the word ‘colleagues’ this is because they feel that everyone at richer sounds whether they are high standard worker or a low standard worker are all equally important and so that word emphasizes it
• Don’t use the term ‘head office’ because this would imply more important than their branches, when the branches are more important. Instead they call it as ‘central office’
• Don’t use the term Part-time as this describes their colleagues as a part-time worker and which implies them to be partly committed to working for Richer Sounds. Instead they call them as ‘career key timer’      
• Never approach their customers by saying ‘can I help you’ – but instead offer them a free cup of tea or a ice lolly                                                                        

Internal communications

Within Richer Sounds, communications may be sent:

• From directors or senior managers to colleagues
• From one functional area to another
• From the colleagues at every level to senior managers, directors, and the chairman.

1. From managers to colleagues

Communications between managers to colleagues may contain information or some instructions. ‘Instructions’ as an example, a fax to alert colleagues to a safety issue is likely to be followed by a clear set of instructions about the correct actions to take

Informative communications tell the colleagues that how well the business is doing, what their aims and objectives are, how they can make the business even better. Richer sounds feel that it is important for everyone to understand what going on and make them feel more involved to the organisation

Examples of communication from directors or the seniors include the following.

• Financial documents, such as the profit statements and the budgets. Every week each store of Richer Sounds receives a feedback on the performance during the past week. This includes outstanding repairs, customer service, and the information on their sales. Each and every Monday morning, the store manger receives a telephone call regarding the figures of the past week. In addition the chairman, Julian Richer phones the best performing stores and regards them a well-done message on the answering machine
• The monthly video – prepared by the chairman of Richer Sound, Julian Richer. This video is played each and every store on a Saturday. On the video it is Julian Richer standing, giving reviews about the previous month and talks on the new developments being made and also giving some important messages
• The weekly report – this report is sent by fax to every branch and departments, which includes the internal news plus information. However Richer Sounds does not like to use fax for every purpose for example, a department or a branch receives lots of faxes everyday they wont be bothered to read it so for that purpose they also use other methods such as visits, the video or telephone calls. In future Richer Sounds is planning to introduce their company intranet which can be easier for them to send reports and other information round the company

2) From one department to another

There are two reasons why one of the internal communications for Richer Sounds communicate between the departments

1. All departments should be in a close link – so that the business operates efficiently
2. Richer Sounds feel that all the colleagues should know what’s going on the company  

Examples of communication between departments

• Finance department communicating to all departments by sending budget statements
• Purchasing, Stock control and Warehouse are in a constant communication through the telephone, email or fax
• All the stores communicate with the central office for various reasons
• Close links between the operations department and the customer service for all the feedback made by the customers on the products so that the operation department can improve it in the future
• Colleague support and training are in contacts to the colleagues in different departments or different stores about the benefits or the promotion

2. From Colleagues to mangers

Richer Sounds personally believes that all the senior managers should listen to the views and the ideas of the colleagues. There are two reasons for this:

3. Colleagues often have a good idea plus suggestions which can help the company to make better improvements or introduce new products
4. Colleagues may have concern or worries which is needed an urgent attention

Examples of Communication from the colleagues to managers

• The suggestion scheme – This type of communication helps the company to improve more as all the colleagues have a ‘What can we do’ little book, which are given to each and every colleague and are encouraged to give their own suggestions on the company. With that they have introduced a reward scheme for colleagues who makes the best suggestion
• ‘The Richer Way’ magazine – This is a magazine produced by a group of colleagues every three months and includes articles on the company plus enables colleagues to write about the issues which concern them
• Colleague attitude survey – This is a survey consisting of questionnaires, which all the colleagues have to complete it. Usually they are give time off their working hours to complete it. This survey is only issued once a year. Once everyone hands in their questionnaires, then they are sent to colleague representive who re-writes all the questionnaires given and destroys the original ones so that no-one can be identified on there questionnaires and also helps the colleagues give an honest feedback
• Home telephone number – this is the best way of communication for the colleagues to discuss their matters at anytime and without any fear. All the colleagues are given a set of home telephone numbers which includes the chairman Julian Richer’s plus all the directors of the business

External communications

There are two types of external communication at Richer Sounds, they are:

1. Communication with Suppliers
2. Communication with customers

Communication with Suppliers – The purchasing department of Richer Sounds and the warehouse are the two departments, which are mainly in the contact with the suppliers, either by telephone, e-mail or the Fax

Purchasing department contacts suppliers about ordering products, which are out of stock, ordering new types of products or negotiating on the special deals that the suppliers have put on. Most of the products are ordered electronically such as through the Internet or by EDI.

 Purchasing department may also communicate with the suppliers for the problems with delivery such as if the delivery is late, or the products arrived have not been the same amount as ordered or even a wrong kind of product delivered. Then the suppliers may arrange another replacement for the delivery or they may give the credit of the products not received.

Richer Sounds have used a technique to speed up communications and also prevent delays for example, if a colleague is not present at the office and he/she has received an e-mail, then the sender will receive a message saying that the colleague is not present at that time and also gives a contact number which is usually he/she’s mobile number

Suppliers are also in contact with the warehouse to book in any deliveries. Once the schedule is been made and agreed by the purchasing department then that will be e-mailed and faxed to the distribution company

Communication with customers – To Richer Sounds communicating with the customers is essential to a successful business therefore they consider that the customer service is very important so that they can listen to their views. There are few examples of communication with customers:

• The main communication is when the customers are face-to-face in their stores. All the sales assistant are well trained before reaching up to a customer and so they can not only be friendly with them but also have knowledge about the products they sell
• They communicate the information on the products such as the special offers, the pricing policy, and the super care guarantee by their in-store catalogues.
• All customers who have purchased the products will receive a questionnaire with there till receipts which are asked to give a feed back on their visit to the store and also provide comments and suggestions.
• Customers with a complaint are encouraged to write in to Julian Richer himself if they prefer. All the complaints are also replied back to the customers
• Customers with specific query can contact the customer service via the e-mail and also receive an feedback

Improvements that can be made in the communication

Communications between departments

I personally think that they should use company intranet that can help the company communicate easily and effectively. With the use of company intranet one department can talk to the other by an email or with the microphone and web cam that can be talked face-to-face but if one department gives an important message I think it should be rather sent through e-mail so that they can keep the record of it.

Communications inside a department

Within a department the communications should rather be oral for example the manager of a specific department should personally go and communicate orally to their colleague if they have made a mistake or any corrections they need to make or even to give him a ‘well done’ message if he has succeeded in what he/she was in charge off. This type of communication would be then a written communication because if the manager writes a letter saying that you have made a mistake in such and such the colleague may not even care so the oral communication can make the department work effectively

Communications outside the business

Richer Sounds have a good way of communicating their customers by offering tea or an ice lolly but they should also try and communicate to all those people who doesn’t know about Richer Sound by advertising on the bill boards, TV or a radio. Communications with the suppliers should also be improved in a way such as: As Richer sounds orders new products off their suppliers through the phone I think that they should also e-mail it 2 them or even fax it so that all the products that have been ordered the store can record them.

External influences

Introduction

What are external influences?

• External influences are factors outside the control of a business that affect its ability to achieve its objectives. Examples include the actions of competitor firms and changes in interest rates

There are five main external influences within a business, which I will include for both of my businesses. The five external influences are:

• Making products competitive
• Local, national and international competitors
• Changes in the economy
• Management of the economy
• Controlling pollution

Making products competitive is when a business is competing another business for example: - A company will make sure that its products are price competitive, making the products available to as many customers as possible

Local, national and international competitors are how a business is competing with another business. Local competitors are usually competing within a few kilometres, national competitors are businesses for the same customers and international competitors are businesses competing internationally.

Changes in the economy are the change between the interest rates, the rate at which prices are rising or the value of the pound can give significant effect on the business.

Management of the economy is how the government has used Fiscal policy and monetary policy with it they have three main aims, which are:

• Price stability
• Steady and sustained growth in the economy
• A low rate of unemployment

Controlling pollution: all businesses can pollute the environment in a number of ways such as air pollution, water pollution, noise pollution and wasteful use of resources that’s why all businesses have laws against these pollutions.

Tesco’s external influences

Environmental Constraints

Tesco is committed to protect the environment, using its commercial strength to put robust principles into practice.
 
Tesco’s environmental standards apply to every aspect of our business and Tesco also asks its suppliers to adhere to many of these practices.
 Calling on expertise from all quarters, they continually seek ways to improve further – so that their customers expect no less. Tesco’s staffs are often invited to join policy groups so that the company’s expertise may be used to help other businesses across the country.
 
Tesco also helps the environment in many ways, such as:

• Recycling - Tesco is committed to minimizing the amount of waste produced and to recycle it wherever possible.
• Climate change - Tesco fully supports the UK Government's commitments to the Kyoto protocol on climate change.
• New stores - Each new Tesco store is designed to blend with the surrounding community, using trees, shrubs and other plants to enhance the site.
• Refrigeration - An £18 million programmed replacing all ozone-depleting CFC (chlorofluorocarbon) and HCFC (hydro chlorofluorocarbon) refrigerants by the year 2005 in the UK is well under way.
• Transport - An £18 million programmed replacing all ozone-depleting chlorofluorocarbon and sophisticated new haulage systems have improved the operating efficiency of the transport fleet
• Biodiversity and Nature's Choice - All UK growers of fresh fruit, vegetables, flowers and other ornamental plants have to meet strict rules protecting wildlife and the land.                                                                                                                                                                                                                                                                                                        
  

Tesco also controls the pollution in another mains ways such as the air pollution for which they better transport which can reduce the among of air pollution by the lorries, Noise pollution for this as well Tesco has tried their best to reduce the sound making from their lorries specially in the morning and wasteful resources which is a main importance for Tesco cause it has it has to do with recycling and so Tesco has a comprehensive recycling programme for our own operations and for our customers. Secondary packaging is kept to a minimum and recycled where possible. Wherever possible, paper, polythene and other consumable items used by Tesco, as well as some non-food products and consumer packaging, contains a proportion or recycled materials Tesco has its own recycling units, recovering paper, cardboard and plastic that would otherwise be consigned to landfills or incinerated
  

 Economic conditions

When the interest rates are higher people may not do as much as shopping as they normally do when the interest rates are lower because people usually go to Tesco once a week and spend around £50 - £100 (and average family) and usually give their credit card but if the interest rates are high then they will not use there credit cards.

With the increase of interest rates to the business then all the products will have an increase of price which can make them loose customers.

How Tesco makes it products competitive?

As Tesco is competing with the other supermarkets it has to make products competitive with those of other firms by concentrating on the three factors, they are:

• Making sure its products are price competitive.  For this Tesco aims to have their prices lower and with less profit to those of competitors and to make a larger profit and charge more money products of higher standard such as Beer and wine
• Supplying high quality products. As Tesco say “ a quality product is one that satisfies customers as fully as possible”. This is achieved in a number of ways such as the product looking better than its customers by a regular cleaning system, help the customers and give them advice and support from the business and to research the customers and ask out questionnaires and opinions to ensure the products meet their needs
• Making the products available to as many customers as possible. For selling their products Tesco has introduced free home deliveries ordered over the internet which is better way of attracting people from shopping within their homes plus try its best to sell its products for a cheaper price than its competitors and also keep expanding into new and new areas

The location of Tesco’s competitors

There are three types of competitors, which are

1. Local competitor
2. National competitor
3. International competitor

Tesco’s local competitor in barking is lidl, somerfield plus all the newsagents and corner shops which makes its profits of that store go down as there customers may go and purchase products from another store or a shop if they feel the price is more cheaper

Tesco’s national competitors are Sainsbury, Asda and Safeways these are the main national competitors cause it competes in the whole of U.K

Tesco’s international competitor is Sainsbury’s as them to business competes not only in U.K but other countries as well.

Improvements

Environmental Constraints

Tesco should also prevent less pollution while they manufacture their own goods and also try to prevent air pollution made by the refrigerators inside every store. While Tesco tries to manufacture goods it should try and keep all the waste made as low as possible.

Business Competitors

As all business has competitors Tesco has tried their best in competing with their competitors, one of the best ways was that Tesco also accepts Sainsbury’s tokens. This is a brilliant way off attracting customers going to Sainsbury’s instead go to Tesco. But there are other improvements such as:

• Tesco should try and keep better offers in their products then their competitors
• Also give a better service inside the stores

Economic Conditions

Here no one knows when the interest rates may suddenly rise but for it Tesco should be all prepared for it so that they don’t need to change their prices of their products

Richer Sound’s External influences

The main external influences to which Richer Sounds are keen to respond are:

1. Actions by business competitors
2. Changes in the economic conditions

Environmental constraints also affect them – but not as much as some companies like a constructing company

Business Competitors

To give their customers the best value of money and best customer service, they look at their competitors in three different ways such as:

1. Each store checks the price of their competitors in that particular area and faxes it to their purchasing department so that they can put a lower price then their competitors
2. From time to time the company carries out official ‘benchmarking’ exercises when they check at their competitors prices advertised and try to compare it with them
3. Our mystery shoppers also visit their competitor’s stores, to check on their competitor’s customer service to compare it with there’s. The mystery shopper also checks on all the prices of products which are the same so that Richer Sounds can see if the prices are higher or lower than them, but if it is lower then the company takes action and cuts down more than its competitors

Richer Sounds also offers ‘price beats’ in their in-store catalogue. Richer Sounds also have guarantee on what they sell is cheaper than any competitors outside or even on the web. If any customer proves that a product is cheaper in their competitive store or the web Richer Sounds would cut down the price and also give that customer £100 discount on any item in their stores

Richer Sound’s location of competitors

Richer Sounds local competitors are all the stores, which sell similar or same products that they sell. It’s most likely to be Dixons, Curry’s, Comet or even any ltd small shops

National competitors for Richer Sounds are mainly Dixons and Curry cause they all round U.K and also compete with Richer Sounds. Even though Richer Sounds does not have much store round U.K and is not so popular but it still says that it’s products are far more better and cheaper than the entire well know stores.

Economic Changes that affect Richer Sounds

For Richer Sounds it is more preferable to keep the interest rates down as low as possible cause off following reasons

• The bank charges are cheaper for their overdrafts
• Customers usually have more money to spend at Richer Sounds on electrical goods
• If the interest charges are low on the customers credit card then they may want to spend more money for better quality goods at Richer Sounds  

With an increase in the interest rates, Richer Sounds can affect problems in the business. This is because that they have to sell more goods to cover their charges for overdrafts. When customers want to spend less on goods and also have a quality products then the customers will go to Richer Sounds as they will know that it will be more cheaper than all the other stores

Richer Sounds are always prepared on the changes of interest rates because they predict all the changes happening in the inters rates and build them into their cashflow forecast

Changing Prices also affect the company too because if their supplier raise their prices on the goods they sell to the stores then Richer Sounds have to ‘shop around’ to find better deal, or else they may have to raise their prices of goods (which the customers may not like) or else reduce their profit margins (The lowest it can go is too 5%). Fortunately their purchasing department has a lot of supplier contacts on their list so they can change their supplier if one starts to raise its prices

Richer Sounds are affected by the changes in the exchange rates because they buy large amounts of products from abroad such as: Europe and as in Europe the currency is Euro therefore Richer Sounds have to pay less money in pounds as at the moment pound is the strongest currency in the world and so they can afford to reduce their prices in their stores, But if the pound currency falls and Euro gets more expensive than a pound then the company will have to pay more money to them as all the goods will increase in price.

Environmental Constraints

The main activity of Richer Sounds does not cause air pollution or even water pollution, and also they are not affected in any regulation of packaging, even though they deal with packaging on the goods but this is ‘sold on’ with the product to their customers

However Richer Sounds still aim to be environmentally friendly in such ways:

1. Richer Sounds are aware off that our customers, colleagues and passers-by could be affected by noise pollution – if their any products are being demonstrated in the store such as: Hi-fi, Or if the noise level in a store is too high. Therefore to prevent this Richer Sounds have strict procedures about the volume level in a store. Particularly when the colleagues are working till late in the stores and it is past 9’oclock then all the products should be turned off and no noise should be made within the store
2. If a customer wishes to listen to a system, they use a special demonstration room which is all sound proof so that they can prevent from other customers getting distracted
3. They also include warnings about the noise in their in-store catalogues –
4. All the old midi systems received by Richer Sounds will not be scraped but sent off to the charity. Richer Sounds also give a part exchange to their customer’s if they wont to sell their old midi systems while purchasing a new hi-fi separate systems
5. Richer Sounds tries to keep all the waste to minimum level – which also includes paper as well as energy such as heating and lightings. They also check that all the computers and photocopiers are all switched off at the end of the day as well as all the products for sale
6. In the warehouse Richer Sounds use electric fork lifts to prevent pollution.  

Improvements on external influences in Richer Sounds

Business Competitors

All their competitors like Dixons, Comet and Curry’s are well known plus they are much bigger to Richer Sounds therefore most customers will think that it will be better to go in a big store as they will find what they are looking for and so like that Richer Sounds loose customers for that reason I would say to try and find a larger places and build a larger store

Economic conditions

I think that Richer Sounds have good views on Economic Conditions and they are well prepared if the interest rates rise

Environmental Constraints

Richer Sounds are environmental friendly in all ways, but the operations department should try and limit the packaging on a product plus make the packaging in a such way that the product can be put back inside it which also prevents less waste and the product cannot be damaged after its packed.