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History Of Tesco.

Extracts from this document...

Introduction

Introduction The Business I have chosen to base my work on is Tesco. Tesco is a very big company with huge revenues. This is also a public limited company that means it has limited liability. The aim of this company is to make profit. I have chosen this company because it is a well-known and established company, which has been trading for many years. The business had a turnover of �28,613m in the year 2003. Its core service is retail. Tesco is a leading retailer, operating 2,291 stores around the world and employing 296,000 people. It used to be purely a UK operation but has expanded to many other parts of the world such as Europe and even as far a field as Asia. There are four strands to Tesco's strategy: core UK business, non-food, retailing services (personal finance and online grocery sales) and international. Tesco also has commitments as a company such as protecting the environment. Most of its products at the present time are not tested on animals for or by Tesco as is written on the product. Tesco also likes to help deprived communities. For example they have 6 regeneration partnerships opened to help communities that are deprived of social and economic wellbeing. In the UK alone they have 1,982 stores. The stores they open are all tailored to meet the customer's needs. For example, they have four types of stores; Extra, Superstore, Metro and Express. All 4 offer different shopping experiences but all have the same outstanding value. As a result of listening to their customer's feedback, they have improved 200 of their stores over the UK. 104,000 of their staff are shareholders in the business. Tesco's Clubcard is the UK's most popular loyalty scheme. Two hundred million AIR MILES have been issued to customers this year. Clubcard holders can collect points at over 3,000 UK outlets including Allders and Marriott hotels. ...read more.

Middle

Banks are often reluctant to lend money to sole traders. * A sole trader can keep all the profit after expenses and income taxes are paid. The accounts of the business are private. * Opportunities for development are likely to be limited because it is difficult to raise additional capital. The most usual way to expand is to plough the profits back into the business to extend the premises or open more outlets. However, this will depend on the ambition of the owner- many sole traders prefer to operate on a small scale. Partnerships A business partnership is set up by at least two people and up to twenty. The partners jointly own the business which responsibilities and risks are shared by the partners. People with different skills often form partnerships, so a greater range of services can be offered. In most partnerships, all the partners play an active part in the business. In some partnerships there may be one or more sleeping partners who have invested money but do not work in the business on a day-to-day basis. They usually receive a smaller share of profit than active partners. It is sensible for the partners to sign a Deed of Partnership which sets out the details of the partnership agreement, such as the salary of each partner, the share of the profits each one receives and the procedure to follow if there is a dispute. Whilst this is not a legal requirement, it does save disputes later. All partnerships are governed by the Partnership Act 1890, which assumes that all partners are equally liable for any debts, unless a Deed of Partnership with different terms has been drawn up. Advantages > Problems can be shared and discussed. > New skills and ideas can be introduced. > It is usually easier to raise capital as all the partners contribute. > There are obvious benefits to be gained from combining the knowledge and expertise of all partners. ...read more.

Conclusion

Companies like Tesco can choose whether to pay profits to shareholders in the form of dividends or they alternatively may hold the profits within the company for reinvestment. Companies like Tesco usually combine these options, distributing a proportion of profits to shareholders and retaining the rest to invest within the company. Some forms of business such as co-operatives and friendly societies distribute profits to their members. Often the share of profits members receive is proportional to the amount they have spent or invested within the society. Legal Liabilities Liabilities are anything that the business owes such as debts to suppliers, loans, mortgages. There are different liabilities for different types of organisations. For example, a sole trader would most probably have unlimited liability as there is only one owner of the business and that owner must take great care to make sure that the business does not go into deficit for large periods of time. If this happened then the owner would have to pay the debts with his own personal savings, he/she may even have to sell his personal belongings such as his/her car or even their house if the debt is extremely big. This is the risk you can run into when you run a sole trader business. Since Tesco is not a sole trader type of business it does not have one owner and no-one can lose personal belongings if the business goes into deficit and debt needs to be paid. As there are many shareholders in this business the shareholders can only lose what they invested in the business. This may be a lot of money if a shareholder has a big share in the business. There is much less risk to people investing in a limited liability company. They do not lose their personal belongings which makes shareholding a popular investment. ?? ?? ?? ?? Mohsin Sharif AVCE Business Studies 12FC Mr Adeyogun ...read more.

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