Will VGS need to expand or change in the future to follow their aims?
VGS have stated that they would not like to expand at the present moment; they are satisfied with the profit. Because VGS are the suppliers to Sainsbury’s and waitrose they made need to change if they get more demand for a particular product from the store. At the moment though, if they were to grow more vegetables they would gain a surplus of unused vegetables. Inevitably they will need to change their equipment used in the warehouses and in the glasshouses e.g. the packing machines, Lorries etc. If they were asked by Sainsbury or waitrose for more goods then they will need to expand, not only in Nazing, but also abroad. Also Sainsbury or waitrose may ask VGS for a new product – in the past VGS only sold cucumbers and tomatoes, for example sweet corn.
Functional areas of Chelsea Village
Human Resources – training, Recruitment and appraisal
The main purpose of the human resource department is to find the right employee, the right amount of employees and at the right time, achieving this will fulfil the purpose of the human resource department
Training is an important part of Chelsea F.C; José Maurino pays out thousands to get his team trained and in form for the next match. Training is needed to train other staff as well, for example, the groundkeeper may need training for a new grass cutter. Another example is the burger bar employs a new cooker; he/she may need training to flip a burger etc.
Recruiting staff is very costly and time consuming it is also an essential part of any business, especially in a business as large as Chelsea Village. Poor choices when ing may prove expensive. The needs to be sure of the new employee’s technical capability. For example, if a new tour guide fails to turn up 3 days in a row, the company loses both time and money and they may be liable for a penalty charge because of the delay. Also the recruitment of new players is crucial in deciding the outcome of Chelsea F.C, because if they are paying 20 million pounds they will need to make sure that the player is perfect for the job.
In a company as big as Chelsea village some form of report on employees is needed to make sure they are fulfilling their aims and objectives, therefore they use appraisal methods. Appraisal is the formal or informal process which an employee is able to discuss their training and development needs with an ‘appraiser’ The actual football team may have an appraiser for every squad member, the appraisal department may be good for motivation because it provides the opportunity for employees to identify ways of meeting their work needs for example, Frank Lampard may be disappointed at the state of their gym, therefore he may request some new equipment.
Sales and Marketing – Market research, promotion, pricing
‘Marketing is the process of identifying, anticipating and then meeting the needs and requirements of consumers in order to make a profit’
This is also a very important part of Chelsea, Chelsea Fact’s market researchers are known as scouts, they study, analyse and gather information on a particular club, for example their rivals arsenal, or a particular footballer for example Ronaldiniho. If they are interested in a player and want to find out more they will send a scout to asses the player in detail. The Mega store will also have market researchers for new merchandise; therefore they may need to gather data from the Chelsea fans in the form of questionnaires asking them what they want more of and less of.
Chelsea promotes their team by means of their logo being on the football shirt and on top of the premier league. It is simple, the higher you are in the premier league the more fans you may have; this is also known as glory hunting. They also promote their team by their game, promote the Chelsea game and you are promoting the club. The advertising department also focus to advertise Chelsea’s goods or services on their website, where many Chelsea supporters visit each day. The website includes; their ‘Fantasy Football their sponsors, Samsung, information on products, history etc.
Chelsea prices their tickets from results given by their scouts. They asses other football clubs prices and price their tickets in the same region. They also price their shirts and merchandise the same. Pricing in the burger bars is different, because you are in a stadium with 40,000 other fans you can expect to pay a lot of money for a burger.
Finance and accounts – monitoring income and expenditure
The main purpose of the finance department is to make sure they receive enough money to pay their bills, for example, if a business had just received many order but had no money to pay their bills they may fall bankrupt although they are receiving orders. As with any business they need to keep to a budget. Income, by prize money, sponsorship and ticket sales. Expenditure, by cleaning costs, electricity bills and buying players.
Administration and IT – communication, Production and customer service
Communication between employees within the Chelsea F.C business is vital, whether via email, phone or mail communication must be maintained 24 hours a day. Communication may involve, a scout reporting his assessment of a player to the clubs manager or even a simple note from a secretary explaining her absence.
In the production of a target item may have many functional areas involved: The production and planning department will set targets for example, a target audience. The purchasing department will be responsible for providing the materials for example, blank CD ROMs. The stores department will be responsible for stocking all the necessary tools for example, a mass CD writer. The design and technical support department will be responsible for researching new products for example, the next club Chelsea football game. The works department will be concerned with the manufacture of products for example, the CD’s made in china to cut costs.
Customer service is a ‘primary activity associated with after-sale support to enhance or to maintain the value of the product or service’ therefore customer service inside Chelsea village may include this scenario: the Chelsea village credit card has mistakenly withdrew funds from a persons card, the employee at the customer service department will call the person to notify him/her that funds have been withdrawn and that they are sorry for any inconvenience caused. This is an example of a good customer service policy. Other businesses that may include the customer service department are: the Mega store – faulty games etc.
Functional areas of VGS
Human Resources – training, health and safety and trade unions
The main purpose of the human resource department is to find the right employee, the right amount of employees and at the right time, achieving this will fulfil the purpose of the human resource department
Packagers, lorry drivers, pickers and more need to be trained to do their job with accordance to VGS. For example Jimmy Russo employs a new lorry driver, the driver will need to be trained to use the ‘blackberry’ PDA, and also the driver must be trained so that he/her is familiar with the lorry that he/she is training for.
Health and safety issues involve packaging machinery not being used when a qualified member is operating it etc.
Trade unions may involve the farmer’s rights, this is important to the employees of VGS but to Jimmy and Vince it may be an annoyance.
Sales and Marketing – Market research, promotion, pricing
Because VGS is a partnership they employ very little people, the market researcher at VGS is Jimmy Russo. VGS would research their supplying stores, for example Sainsbury and waitrose, observing what the customers demands are – what they want and what they don’t want. The researchers may research other suppliers like VGS and what they grow and also researching what they sell more of.
VGS promote their goods on their website. But they are also listed elsewhere, for example ‘list of approved traders’ website.
VGS do not promote their pricing on their website, but they may price there products from gathered market research from other suppliers or Sainsbury and waitrose may just give them a price.
Finance and accounts – monitoring income and expenditure
As with any business they need to keep to a budget. Income, by selling goods to Sainsbury and waitrose, Expenditure, by cleaning costs, electricity bills and buying new machinery.
Administration and IT – communication and customer service
Communication is a very important functional are in VGS, especially between lorry drivers and VGS Nazing. The lorry drivers carry handheld ‘Blackberry’ PDA devices, this is updated by satellites, this displays: traffic conditions, GPS, weather conditions and also hold other useful information.
VGS are dedicated in producing high quality fresh produce. This is shown in there: packing method – wrapped in cellophane and also there grading method – the ‘traffic light’ grading
Internal communication in Chelsea Village
The low profit burger bars may just use their mobile phone but Chelsea F.C will need to use technology, information technology [IT] this is a big part of Chelsea F.C it makes the business effective and efficient. All functional areas in Chelsea Village benefit from the use of IT. They may use Email, but there are advantages and disadvantages in using email advantages include: the ability to receive a same message simultaneously, cheap, efficient. However as with any form of communications there are disadvantages: it is criticised as being less formal – no personal contact, can be inefficient – an office worker may email someone 2 metres away, the ability of being hacked. Chelsea village do not just use IT as a form of communication for example, to send a message to the fans they may use live broadcast on public TV or radio.
Internal communication in VGS
As with Chelsea village IT is also important with VGS. There are many forms of internal communication in this business; a business meeting – formal, a memorandum – this usually contains a request or information, a letter – traditionally formal may contain many things, notice board – informal and may display adverts. Etc.
External communication in Chelsea village and valley grown salads
This also may include IT. Chelsea village and VGS may need to communicate with; other businesses, with suppliers, with customers or the government. These external communication features may be in form of oral, formal or informal. Any communication that takes place between the business and an outside body is external communication, in these businesses external communication may include a simple telephone call from Chelsea F.C to the sweat shops in china requesting 1000 more shirts, or a business conference with VGS and waitrose – these are examples of oral communication, however there can be formal and informal oral communication. For example an interview, a meeting or a conference, these are formal, an example of informal communication may include; networking or phone calls. The main technique of external communication is in the form of writing, this is due to many reasons for example, to keep a record. Businesses such as Chelsea village, that have shareholders, may need to make documents formally available to the general public, for example a company report and accounts.
How is internal and external communication used to support functional areas in Chelsea Village and Valley Grown Salads?
Human resources, training and trade unions
When Jose is training his squad he would use face to face communication to teach his squad. Other training often involves new staff, there is a new secretary, the trainer would communicate firstly face to face then maybe write a list of things that the new employee can expand on and practice. Other businesses like the Chelsea Mega store may train their employees because of new machinery for example, a fork lifts truck; communication would be used via a manual or a demonstration.
Communication in the form of person to person is needed for training on VGS machinery for example, packing machines. However there also may be a manual available for the piece of machinery.
The football player’s trade union would communicate through formal letters. If needed, they may arrange an interview with the footballer to communicate face to face. This is the same for VGS.
Sales and marketing, market research and pricing
The market researchers at Chelsea [the scouts] would communicate by writing a detailed statement or report of what they have assessed, they may at first communicate informally by telephone or email.
The market researchers at valley grown salads may communicate their findings by writing a detailed report with prices etc.
Chelsea’s pricing strategies are determined by the market researcher’s findings; therefore the researcher would communicate by writing a report of his/her findings. This would also be the same for valley grown salads.
Research and Development, Product improvements
This functional area may need to communicate with shirt designers via sketches and reports; this is the same for the Chelsea game etc.
This functional area may also need to communicate with companies that offer efficient fertilisers. They will need to communicate in the form of writing and if VGS are interested they may call for a meeting.
Finance and accounts – Monitoring income and expenditure
This functional area communicates discreetly, for example Jose may communicate to the board of directors only by face to face meetings and conferences. It is an important part of the business, so a memo will not be good enough.
Because VGS have chosen to conceal their account information they will need to communicate formally, in the form of face to face or a written report.
Administration and IT – reception, security etc.
Security teams around Chelsea village and Valley Grown salads will need to respond quickly therefore it is essential that they carry some form of telecommunications whilst on shift for example, walkie talkie. Other parts of the functional area for example, IT, may prefer to communicate via email because they would probably be sat at a computer in the first place.
Customer service – after sales and complaints
The after sales team will need to communicate to the customer by writing a letter or face to face, in some cases the customer service department may want to follow up the complaint with a phone call.
The customer service for VGS may be different because they supply goods to Sainsbury and waitrose. But if there is a problem with the goods VGS will need to communicate quickly, therefore telephone may be an appropriate form of communication.
How does IT improve Chelsea village and VGS?
Information communication technology is an important part of these businesses even more so in Chelsea village. There are many benefits of using IT for example; in communications, data storage and handling, security, customer service and IT ultimately reduces transaction costs.
Security. Both in Chelsea village and VGS there needs to be some form of security to protect important files that must not be accessed by anyone but the creator – IT [especially in windows software] offers downloadable programs to encrypt certain pages or folders up to 1024mb – hackers nightmare. Other forms of security are needed, for example an employee opens a blank received email with an attachment, this may be a regular thing but the employee may not realise how much damage her/she may have caused – a virus. To prevent spy ware, ad ware, viruses and Trojans the business must use a reliable firewall – to prevent them, and virus scanner – just in case!
Communication. Information communication technology also speeds up the process of communication – this may be an essential factor for VGS and Chelsea village. The most common form of IT related communication is email. Email allows messages to be typed and sent to more than one person simultaneously thus saving time for VGS and CV. However it has been criticised as being less formal and taking away the factor of personal contact.
Storage and handling information. IT can be used to store and manage data significantly better than filing cabinets thus saving time and money– another advantage to VGS and CV; however the data can be destroyed in a click of a mouse. IT can be used to store vital data such as orders from VGS and CV. A program can be downloaded to track a parcel – advantage to the customer service department
Reduces transaction costs. Every product in a supermarket like Sainsbury [except loose vegetables etc.] will have a barcode on it, this is very useful to the Chelsea Mega store and saves lots of time – you could handwrite 1000 labels or make 1 label and print 1000 labels. A barcode contains a lot of information for example, shirt, shirt size and the price – this is also a great advantage to VGS and CV because it saves time.
Others. IT can run many different programs; a DTP – to design a new Chelsea shirt, word processors – to type letters and can be used as means of entertainment, which may be a disadvantage for managers!
Ownership and liabilities of Chelsea F.C LTD
Chelsea is and always has been a Limited company, meaning it has always been an incorporated business. A limited company like Chelsea F.C has limited liability meaning that their owners are not personally liable for the company or firm’s debt – their losses are limited to the amount they invested in the business. To become a limited company, Chelsea F.C had to submit a memorandum of association – this contains the business information including, the amount of capital invested. Chelsea F.C was then able to get a Certificate of Incorporation, and then they may able to begin trading.
Both PLC and LTD must submit their accounts, and have them available for inspection. This warns the trader that they have limited liability and that debts cannot be recovered from the personal funds of the company .
Private Limited Company’s
Public Limited Company’s
Chelsea F.C was a public limited company; it had all shares available on the stock market until Roman Abramovich bought all the shares, therefore Roman has decide to make Chelsea F.C is owned into a private limited company. Roman wanted total control over Chelsea F.C this is why he bought all the shares. However in the long run a public limited company may be better for example, A PLC has much more capital available, which they may have raised by selling its shares to the public on the Stock Market. This means PLC’s can expand a business more easily than a private limited company. They can also benefit from economies of scale, because it is a large-size organisation. This means that it will be able, for example to buy in bulk and borrow more cheaply. All of this should ultimately decrease costs and improve efficiency in the long run.
Ownerships and liabilities of VGS
VGS has always been a partnership between two brothers, jimmy and Vince Russo with their dad being a sleeping partner – this is someone who invests in the business but plays no role in the business. They prefer this type of business because they can keep the family close because they are partners.
Partnerships are businesses owned by two or more people. Jimmy and Vince had to sign a deed of partnership, this include that they agree how much money each of them should get and what type of partnership the business is. Partnerships are like sole traders – they have unlimited liability, this means that the person is liable for all business debts – the bailiffs can take everything from Jimmy and Vince.
Business Location
There are five main points to consider when choosing a location for a business;
Central government funding, the government may offers rewards or bonuses to any business firms who are prepared to move to a targeted area for example, These might be areas of high unemployment.
Natural Resources, an area that has a lot of raw materials may attract a certain industry. For example, the steel industry may be located in Yorkshire because of the amount of sources of coal so they can heat the metal cheaply.
Transport Links, a network of motorways and railway lines makes it easy to transport goods. Some industries still need to be close to transport links, so produce can be moved to market quickly and cheaply for example VGS’s vegetables to waitrose and Sainsbury.
Markets, getting a particular produce to a certain market is not a problem because there are many forms of transport and communications links in the UK. It may be an advantage to be located near a densely populated market like London; however it may cost more money to be located there. Supermarkets and restaurants set up near their certain markets, or customers.
Workforce, this used to be a factor, but now there are a large number of unemployed people. Workers with specialist skills are often needed by a particular business. Many technology businesses locate near universities, where people with the right skills are often available.
During the development of a business there may be a number of factors to consider, staying or to move;
To move;
Rising competition in an area for example, a Netto near a Sainsbury
Rising costs for example, rent rises
Falling demand for example, locating a sweetshop near a PowerStation.
To stay;
Government incentives for example, government funding
Low labour costs for example, Nike in Indonesia good
Developing markets, for example an increase in demand for Yoyo’s
Chelsea village is located in the fashionable Knightsbridge postal code region of ‘SW6’. It is easily accessible from the main motorways; M25 and the M40. Their location has been described as ‘superbly located’ for the two largest airports in England, Heathrow and Gatwick. The location is also in close proximity to the popular Earl’s court and Olympia. It is also located within 5 minutes walk from the district line, Fulham Broadway.
Because Chelsea village is significantly about the football matches, they need to be in a location that offers superior transport links, their actual location offers a versatile and wide range of transport links for example, and they are located near an underground railway station and a normal train station. The hotel is situated in the right place as well, Knightsbridge is considered to be a fashionable and wealthy town, rich business men may choose to stay at the Chelsea village hotel if staying in the area. The Mega store also needs to have good connections to transport for incoming deliveries. The workforce at Chelsea village may not actually be too large, a few cleaners and tour guides when a match is not on, however on match day there will need to be a lot of security and police, and therefore the business is 09located in close proximity to a police station. The Mega store is located in the best place possible, adjoined to the stadium where hundreds of thousands of Chelsea fans pass through every year.
Although Chelsea is renowned as one of the best teams, if you moved them stadium it would no longer be called Chelsea because of the location. The Chelsea stadium has stayed in the same place for at least 200 years and so a tradition has been formed to upgrade the stadium and not to move it.
If Chelsea was not located near good transport links they may suffer for example, thousands of Chelsea supporters rushing to the stadium and there is only 1 road for ten miles, traffic would be tremendous and also not everyone has cars. The Mega store also would be greatly disadvantaged if it was moved 2 miles down the road. In contrary to this, the Chelsea F.C will always have their faithful supporters to attend their matches even if it was located in the middle of nowhere. If Chelsea did not have the tradition of not moving to another location Chelsea F.C may be described as a footloose business.
VGS is located in the rural Nazing area. Because VGS is also a vegetable grower they need to have a lot of nutrient enriched land to grow their crops, Jimmy and Vince picked Nazing to set up their business there because the land is in good condition to grow crops and also the price of the land was very cheap to buy. If, for instance, they bought there land in London they would of paid tens of thousands more. If valley grown salads bought their farm land from a region that had poor soil, then their performance in the primary sector may be jeopardised. VGS’s partners are located internationally for example, Edom is located in Israel and they also supply goods to VGS.
Nazing has many roads, however the winding country roads that lead to the main roads may be a disadvantage for the lorry drivers, and however I’m sure that the employees will not find the roads as difficult to drive their cars to work on. Because VGS import produce from Spain and Israel there may need to be good transport links, for example the channel tunnel is an advantage and also the waters that lay between France and Britain are used extensively in the transportation of goods and people, therefore this, also is an advantage for VGS. The motorways that link the coast to Essex are also good for VGS, for example the M25 will be used in the transport of goods to VGS.
External influences of Chelsea Village
Businesses, like Chelsea F.C, operate in an external environment; they will have competition from rivals businesses. However they may have to take account of legal, political, social and economic influences – these are all external influences.
Chelsea F.C as a company will have many competitors for example, arsenal F.C. If the arsenal football team buy one of the most famous football players around this will pressure Chelsea in keeping up with who the fans want in their team, therefore competition is a significant external influence for Chelsea F.C.
External business environment is a factor to Chelsea village; however they may have little or no control over it for example, the rain may cancel an important FA cup match therefore disappointing the fans.
The British economy may go through periods of fast and slow growth. Businesses, like Chelsea village, may prosper when the economy is ‘booming’ and living standards are rising, this is because Chelsea F.C offers a luxury/service that is not needed but wanted, if the economy is booming, people are earning more money, people have more money to spend on services like watching a Chelsea football match.
The legal system creates the rules, legislation. Government policy may support and encourage some business activities for example, enterprise. But the legal system may discourage others for example, the creation of pollution. Therefore Chelsea village may not be highly affected by legislation against Chelsea; however there may be a bit of legislation against the ‘football hooligans’.
The exchange rates will ultimately affect Chelsea village profits and losses for example, when Jose Marino buys a new player abroad the foreign club would want to be paid in their own currency. The pound is has been strong recently; if the pound grows to 2 euros to 1 pound then Chelsea F.C may purchase the player for less money solely because of the exchange rates. Therefore choosing a moment to change up 20,000,000 pounds is risky.
For a company as big as Chelsea F.C there are many forms of inevitable pollution. Noise pollution is a major factor for the residents around the stadium and Chelsea F.C may have many complaints from residents claiming; all they can here on a match day is the Chelsea songs. Pollution in the form of litter will also be an annoyance for the residents situated in the stadium area for example, tens of thousands of hungry football fans exiting the stadium will inevitably litter. Air pollution may also be another factor created by Chelsea F.C for example, tens of thousands of football fans from around the world all commuting to Chelsea village will create a lot of pollution form; cars, planes, busses etc.
Because Chelsea F.C also owns a credit card and savings, therefore interest rates will be a factor in the outcome of Chelsea F.C’s gains and loses for example, if the interest rates are high, Chelsea will also need to increase their APR offered to the card holders. However the interest rates will not affect Chelsea F.C personally because the team is so rich and they do not have any outstanding loans/debts.
External influences of Valley Grown Salads
VGS may have many potential competitors for example, another company down the road. However because Jimmy and Russo decided that they would not like to expand, competition at this time may not be a significant external influence.
External business environment is a factor in VGS but not in growing crops, they grow their vegetables in a greenhouse, the factor lies in road conditions. If for example it snows in Nazing their vegetables will not change but transporting the vegetables may be hazardous and dangerous in the snow especially through the winding roads of Nazing.
Because VGS owns and maintains valley grown nurseries they may need to use a lot of ‘green house gasses’ so in the coming years VGS may need to consider reducing green house gas emissions.
Higher oil prices have caused the difficulties that all economies face, VGS may burn oil – related substances in the green house for example, paraffin. The oil prices are at 99.9p a litre – the highest ever, this is a disadvantage also in the transport sector where their refrigerated Lorries guzzle down oil.
Exchange rates may play a part in the gains and losses of VGS for example, if the exchange rates rise by 3 euros to 1 pound and 4 tomatoes cost 1 euro, VGS may make a significant amount of profit just because of the exchange rate, however the exchange may also fall in favour of euro.
Because VGS imports produce internationally they will cause much air pollution in the form of carbon dioxide from their lorries and from the importing vehicle.
Evaluation of Chelsea Village’s Strengths and Weaknesses in the light of the External Influences
VGS
The external influence ‘Competition’ would be a strength to VGS because they seem to have built a friendship between other similar businesses in the area.
The external business environment is similar to the weather, however In VGS’s case the external business environment does not play a major factor because they grow all their crops inside a greenhouse therefore the external business environment is a strength.
The external influence ‘Social Factor’ which includes structure of the population and consumer lifestyles may not affect VGS in a bad way because the product they are selling is a food therefore a ‘need Item’ this external influence is a strength also because if the population increase there will be more people, thus more mouths to feed.
The external influence ‘Legal Factor’ this includes the law and how companies must behave in order to stay the right side of the law. VGS is a harmless partnership that produces ‘high quality fresh produce’ however; the external influence ‘Legal factor’ may be a slight weakness because they do in fact use a lot of green house gasses although there has been no legislation passed that involves the use of green house gasses therefore the external influence ‘legal factor’ is a strength for VGS
The external influence ‘Economic factors’ relate to changes in the wider economy, a booming economy promotes consumer spending but an economy in recession diminishes consumer spending. In the case of VGS and their food produce they will not be affected if the economy booms or stoops because their produce is a food, not a luxury, a ‘need’ item, therefore this external influence is also a strength in VGS.
The external influence ‘Technological factors’ will be a great strength for VGS as they do not manufacture any new technology, only foodstuffs. The new technology will also improve the way in which VGS may operate; ultimately decreasing costs therefore this external influence is a good strength.
Chelsea Village
The external influence ‘External business environment’ concerns, in the case of Chelsea village, the weather. The weather is an important factor because it ultimately effects the outcome of a game – if the pitch is waterlogged a football match may be cancelled. Chelsea village may have no control over this external influence, but if they would like to be in control of this external influence they may need to spend millions of pounds installing a retractable roof over the pitch, therefore the external influence ‘External business environment’ is a weakness for Chelsea village.
The external influence ‘Competition’ in the case of Chelsea village may concern other football teams, when Chelsea F.C are winning in the league this may be a strength however if they are not winning this can also be a major weakness because there are so many other football teams playing against Chelsea F.C, for example Tottenham and Arsenal. Therefore the fans need to be pleased, and losing games will lose them money because fewer fans will come to look.
The external influence ‘exchange rates’ will affect Chelsea village in a good or bad way, for example if Chelsea bought a player when the pound is weak the may need to pay more pounds than if the pound was strong.
The external influence ‘Interest rate’ will affect Chelsea village also in a good or bad way, it entirely depends what state the economy is in for example, if the economy is ‘booming’ the people of the country are buying and spending more money, therefore can afford to watch Chelsea play because Chelsea is a ‘want’ product.
The external influence ‘Legal Factor’ this includes the law and how companies must behave in order to stay the right side of the law. This may be a bad weakness because of the football hooligans, the F.A may call for the game with no fans, causing loss in ticket sales and reputation.
