I have identified four contrasting businesses they are as follows: KFC John Lewis TJ's Newsagents Oxfam
Task 1.1
I have identified four contrasting businesses they are as follows:
* KFC
* John Lewis
* TJ's Newsagents
* Oxfam
KFC
Ownership
The type of ownership KFC would fall under is a franchise this is the name that's given to a business which is operated by a franchisee, and to whom a franchiser grants the right to market a good or service. It provides another option to starting a business and buying a business. The franchisee usually pays a fee and/or a percentage of sales to the franchiser for receiving financial help, training, supplies, a protected market and technical assistance from the franchiser.
Like a partnership there is a legal document that needs to be signed which is the franchise agreement, this is the cornerstone document of the franchisee, franchiser relationship. It is this document that is legally binding on both parties, laying out the rights and obligations of each. Sometimes a sample agreement may either be attached to the disclosure statement or presented separately.
The agreement usually contains provisions covering, in considerable detail, the obligations of the franchiser and franchisee regarding operating the business; the training and operational support the franchiser will provide (and at what cost); your territory and any exclusivity; the initial duration of the franchise and any renewal rights; how much you must invest; how you must deal with things such as trademarks, patents and signs; what royalties and service fees you will pay; tax issues; what happens if you should want to sell or transfer the franchise; advertising policies; franchisee termination issues; settlement of disputes; by the company, operating practices, cancellation, and attorney fees. KFC is a franchise but can also be looked upon as a plc. This is because it is open for the public to buy shares in the company. These people are called shareholders.
The advantages of being a franchise:
> You do not have to start your own business
> You can pick the type of ownership it fits
> A franchisee makes money out of franchisers
> They have limited liability
The disadvantages of being a franchise:
> A proportion of the profits must be paid to the franchiser
> Bad publicity for the franchisor can have an adverse effect on the franchisee's business
About the business
KFC's main activity is to provide high quality chicken made with the same great taste that Colonel Harland Sanders (founder of KFC) created more than a half-century ago as well as tasty side dishes and deserts for the paying community. They are a fast food chain
Liability status
KFC's liability is limited this means the amount investors in a corporation can lose is limited to the amount that he has invested in the firm and no more.
The sector of economy KFC would fall under would be the public sector as it provides a service to the public in exchange for money and is also controlled by the government.
KFC's objectives would be to:
> To expand as a business
> To achieve customer satisfaction
> To increase on the profit margin each year by beating their standards of last year.
> To have a larger market share than their competitors.
Stakeholders in KFC would be:
> Customers - they want satisfaction of goods
> Suppliers ...
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The sector of economy KFC would fall under would be the public sector as it provides a service to the public in exchange for money and is also controlled by the government.
KFC's objectives would be to:
> To expand as a business
> To achieve customer satisfaction
> To increase on the profit margin each year by beating their standards of last year.
> To have a larger market share than their competitors.
Stakeholders in KFC would be:
> Customers - they want satisfaction of goods
> Suppliers - to retain customers and to be paid on time
> Employees - job security, job satisfaction, good wages and promotion
> Government - to maintain the economy act in the interests of various groups
> The local community - to maintain the quality of life.
> Financial institutions - to retain business, to be paid on time and to receive interest
> Shareholders - continued good dividends
These are the external and internal people in the business that would have an interest. The reason they are stakeholders is because they all have a stake in the organisation.
The most primary stakeholders would have the biggest effect on the organisation would be the government as they have the most power out of all the stakeholders, then the customers, suppliers and employees because without these three the business would not be able to operate.
TJ's newsagents
Ownership
TJ's newsagent's type of ownership would be a sole trader as the owner would be liable for his own debts, for this reason the limitations of liability enjoyed by a corporation do not apply as they are financed through their own name, this means that if the business is unsuccessful the owner can lose their possessions and could end up going bankrupt resulting to their business coming to an end. All debts of the business are debts of the owner. It is a "sole" proprietor in the sense that the owner has no partners; because of this there is no need for an ownership agreement.
The advantages of being a sole trader:
> The business is easily set up.
> The sole trader does not have to publish accounts.
> The owner gets to make all the decisions without consulting to no one because he or she is their own boss and takes no orders from no one else. This means everything gets done the way the owner wants it to be done.
> The owner gets to take all the profits that are made from the business after all the expenses have been paid.
> The sole trader can be flexible with working hours as well as opening hours and which days to work.
Disadvantages of being a sole trader:
> Not able to use long term finance because of ownership
> If owner is sick the business will come to a halt
> Unlimited liability
> Growth is limited to the amount of capital one person can raise
About the business
The main activity of TJ's is to sell branded quality snacks and products of all kinds to customer satisfaction.
Liability status
TJ's newsagent would have unlimited liability as it's a sole trader this means: A liability of a person to pay all the debts of any business enterprise carried on, not only out of the assets of the business but also, if necessary, out of personal assets. Sole traders incur unlimited liability.
The Sector of economy TJ's would fall under is the private sector as it is a retailer it is in the tertiary sector.
The objectives of TJ's would be to:
> Reduce costs by 15% by buying in bulk, improving security etc
> Surviving as a business
> Maximize profits
Stakeholders
TJ's newsagent stakeholders in this business would be:
> The local residents
> The government
> Customers
> Employees
> The supplier etc
Oxfam
Ownership
Oxfam is an international charity it's a public sector organisation funded by the government. It has a board of trustees of up to 32 members that work for the government. Oxfam also has chief executive that's responsible for the trustees and the management of the organisation. It is limited by guarantee, so it cannot become indebted beyond a certain level. They aim to provide a full service but they may also make a surplus, which can then be ploughed back into better service for the future. A charity shop of Oxfam has limited liability and does not have to pay tax. The trustees in Oxfam are responsible for all the organisations activities under the charities act. As Oxfam is a registered limited company they must comply with the legal requirements of the Companies act 1985
The advantages of being a charity:
> Good public image
> Less tax is paid
The disadvantages of being a charity:
> The purpose must be truly and exclusively charitable
> Organisation cannot expand into non charitable areas
> Profits can not be taken from the venture
> Accounts must be submitted annually to the charities commission.
About the business
Oxfam's main activity is to work with others from all around the world to overcome poverty and suffering i.e. to help people that are in need of shelter money food etc on an international scale.
Oxfam is a non-profit making organisation that has non-profit making charity shops located everywhere so that they can also raise money to provide some of the equipment, food, clothing etc that they send worldwide. The profit that is made by Oxfam is reinvested into the business
Liability status
It is limited by guarantee, so it cannot become indebted beyond a certain level. They aim to provide a full service but they may also make a surplus, which can then be ploughed back into better service for the future.
Oxfam's Aims and Objectives
Most of the companies I have written about have SMART aims that they want to achieve after a certain time period. Oxfam doesn't have that they have a vision of a world where there is no longer poverty and suffering.
They want to ensure that every individual is assured of a right to be heard by those who make the decisions that affect their lives, a right to equity not to be disadvantaged because of their gender or ethnic identity, life and security when conflicts or natural disasters strike for example war, hurricanes or earthquakes etc, a sustainable livelihood and education and health this means the right to a reasonable living over a long time period.
Their objectives are:
> Women and men will enjoy equal rights
> All people will have an effective voice in influencing decisions affecting their lives; and will achieve their political and civil rights and will enjoy equal status with others.
> Fewer people will suffer personal communal, forced displacement or armed conflict.
> Ethnic, cultural, religious and other groups oppressed or marginalized by reason of their identity will enjoy equal rights and status with others.
> Fewer people die, fall sick and suffer deprivation as a result of armed conflict or natural disasters.
> People living in poverty will receive food and income security
> All children will achieve their right to a good quality source of education and also adults who are poor will have access to sufficient educational opportunities to help overcome their poverty.
Oxfam's Stakeholders are:
> The government - They would want to know about the business and the type of activities it's carrying out in order for them not to pay tax and gain funding.
> Customers - They play an important role, as they are the ones that are helping raise some of the funds by doing sponsors, giving donations i.e. food, clothes, toys and money etc, buying from charity shops etc.
> Employees - They are interested in the organisation as that want to know whether the hard work they are putting in is effective.
> Local community - The local community will be happy with the work produced, happy to hear if progress is being made and would be happy donate.
> The board of trustees - They have the ultimate responsibility in law for the charity.
John Lewis
Ownership
John Lewis is a huge national department store that is a PLC but is different from the rest, as it has been owned by a trust for the benefit of everyone who works within the business. This means that the profits they make do not benefit a group of outside shareholders. In simpler terms the employees own the company, as they are the shareholders rather than the general public.
The advantages of being this type of PLC:
> Only the people within the business have a say of how the business is run such as employees, board of directors etc as they are the shareholders.
> They have limited liability.
> They are able to buy other companies.
The disadvantages of this type of PLC:
> As the shareholders are the people within the organization the whole business would be affected by debts that may cause the business to go into liquidisation.
> Must pay corporation tax.
John Lewis is a supplier of consumer goods in the fashion, household and food markets. The company has two major focuses within the UK retail, which are, selling fashion and household goods through 26 branches of john Lewis department stores.
John Lewis's main activity is to provide the highest quality goods that there are for the best price, to the satisfaction of the communities in which they trade.
John Lewis an incorporated business, meaning that it has limited liability. This means that the liability would be limited if they were to go in debt. John Lewis is in the public sector like any other PLC. Their objectives would be to recruit and retain loyal customers, improve customer service to a higher standard i.e. to allow continued development etc.
Stakeholders that you may find in this business are their customers, the shareholders, the government and the trade unions.
Shareholders within the business would be different from the rest of the other shops as the shareholders of the business would be internal i.e. the people that work within the business, for example sales staff, the managing director, board of directors etc.
Customers play part in a very important role in helping john Lewis to be successful because without customers buying their products john Lewis would make no profit.
Sector of economy
John Lewis is a manufacturing industry the secondary sector as well as the primary and tertiary, because:
. They own factories where they manufacture some of their products.
2. They own their own farms.
3. They own store nationwide.