Ownership
There are many different types of ownership including sole traders, partnerships, franchises, limited companies both private and public, co-operatives and there are businesses owned by the state. The main advantage of being a public limited company (plc) and selling shares through the stock exchange are that large amounts of capital can be raised very quickly. A disadvantage is that control of the business can be lost by the original shareholders if large quantities of shares are purchased as part of a take over bid. It is also costly to have shares quoted on the stock exchange. To create a public company the directors must apply to the stock exchange council, which will carefully check their accounts. A business wanted to go public will arrange for one of the merchant banks to handle the paperwork. Selling new shares is a risky business and if they are not careful the business could lose a lot of money as quickly as it is to gain capital.
J Sainsbury plc is a leading U.K. and us food retailer. The company is a plc and sells its shares through the stock exchange. The company has a dividend reinvestment plan that allows shareholders to reinvest their cash dividends in the shares bought in the market through a specially arranged share dealing service. This idea means that instead of giving out shareholders dividends the company reinvests them back into the company hopefully making the company better, more efficient and making the company and the shareholders more money. Sainsburys needs to be a plc for many reasons, one of which is it needs access to finance, if the business was not a plc they would have to provide capital from his own savings or could take out a loan from a bank or other type of institution. Plc’s are able to raise finance easier because it is more financially secure. They can raise capital through shares, bank loans, or overdrafts. Large companies can borrow money more cheaply than larger ones.
Business objectives
Sainsburys has its own mission statement, which they believe will develop their business even further and set targets to give you a datum from which to work from. Sainsburys statement is “to be the consumers first choice for food, delivering products of outstanding quality and great customer service at a competitive cost through working faster, simpler and together”. On the next few pages I have included “our mission” I found this on sainsburys web site and it goes into detail about what they hope to achieve in the future.
Analysis of Sainsbury’s objectives
Sainsburys are already an extremely well known major supermarket chain and even since the outset the founders principles and values haven’t changed. Their mission to be the consumers first choice for food, delivering products of outstanding quality and great service, isn’t that much of a extravagant idea.
Mystery shopper reports show that sainsburys are increasingly improving. With employees being trained to give outstanding service, and the quality of the food being checked to ensure the customers are not just satisfied with their products but are so impressed that it makes them return. It is no wonder that sainsburys are well on their way to meeting their mission statement.
Sainsburys have also just introduced a new way of providing great service- “scan and pack”. This is a new idea by sainsburys whereby the checkout operator scans and packs; this helps the customer get through the checkout quickly and with fewer hassles caused. I found out by interviewing Emma Davis, manager of the kingswood branch that all new employees would undergo a number of customer service training. This would include how to limit the hassle caused by shopping to customers and delivering great service training.
Where it states in “our mission” that it is “working to develop a stronger complementary non-foods offer through Adams children’s clothes, Jeff and Co and a trail of a home range”. They are doing well to achieve this as we can see in the new and improved Emerson’s Green store where they have incorporated all of this. I imagine that all big sainsburys have or are trying to incorporate Adams clothes and Jeff and co into their stores. They have expanded the store due to the recent success of the store. This would properly be due to the village expanding rapidly in recent years. Also they would have expanded their stores to make more customers shop in them. By having other brands in the store sainsburys influence customers to come into their stores to get other items other than food. While they are in the store most customers will get other food items even if they didn’t intend to.
Functional Areas
Sainsburys has been split into many areas; these are personnel, store manager, check-outs, produce, fresh foods, admin, deli counter, bakery, dry foods, stock control, ware house, frozen foods and BWS. Each area has its own structure and management (diagram). Each department has its own manager; they are in control of their own areas. They can then feed back information from managers above themselves. This means the people at the top are able to get a better view on what is happening on the ground, therefore giving them a better understanding of what all their employees are doing.
By splitting the company up into all these different areas it means that they can concentrate on the needs of their customers. If they have one big company combining everything together, then it would be awkward for the customers to find what they wanted from the services provided. It would also be hard to control all the employees and make sure they are all doing thing right, the store would be chaos. But by having separate areas customers for example are able to find there way around the different organised department.