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Unit 1 – Investigating Business
In this unit, I will study the aims and objectives that profit not-for-profit businesses try to achieve.
I will explore how the external environment, such as changing social values and competition, affect the ability of businesses to achieve their aims and objectives.
I will study how businesses use market research and the marketing mix to identify and meet customer needs, explaining how these marketing activities help businesses to achieve their aims and objectives.
I will explore the meaning of enterprise and enterprising behaviour and investigate why individuals and teams are vital to the success of business.
Introduction of my business
The business that I have chosen is an off license grocery shop business which is located on Leicester Street, Whitmore Reans in Wolverhampton. The name of this shop is Khera Doaba Stores.
The business is owned by Mr Putvinder and Mrs Amerdeep Khera, who have been running it for the last 15 years. They bought this shop back in 1991 from some close relatives, who were looking to sell because of money difficulties, so they helped them out.
In the shop there are two joint managers Mr and Mrs Khera. There are also 7 employees that help out by stacking and bring in the goods; Hardeep Khera, Jasmine Khera, Navdeep Singh, Kuldeep Sangha and Sammy Pather. There are also two paper boys; Raj Bigra, Kiren Kang. The banking and buying of the goods is all done by Mr Harjinder Khera. He also sorts out what wages each employee gets and the hours they will work. The sorting out of all the invoices and the VAT is done by Miss Dalip Khera. Each day they have a sale of about £800-£1200 and in a year we have a turnover of £250 000-260 000.
The shop is open 7 days a week from 8 00 am to 9 30 pm on week days and 9 00 to 10 00 on weekends. The shifts that the employees do are from 8 00 to 6 00 Mrs Khera works then from 6 00 to 9 30/10 Mr Khera takes over. The rest of the employees have different shifts, depending on there responsibilities
The business sells alcohol, Jamaican food, sweets, crisps, tins (soup etc), cigarettes, freezer food, ice creams, fruits and general house products (kitchen cleaner etc). Other items that this business sells are: sim cards (O2, t-mobile, Orange) Phone Cards and newspaper. Also in the shop is has a PayPoint and Pay Zone where customers can pay all of their bills such as, gas bills, electricity bills, water bills and any other bills that they want to pay off.
The types of people that visit the shop are mixed ethnicity that live all in the local area. These people are very happy with the help they get in the shop. Khera Doaba Stores has a lot of competition with other stores, which are about 5 to 10 minutes away.
The business is situated at:
The front view of the business
To survive, every business needs SMART objectives:
- Specific – Objectives should identify what they want to achieve.
- Measurable – You should be able to measure whether you are meeting the objectives or not.
- Achievable – an objectives that should not be beyond the reach of the organisation and individual employees
- Relevant – an objective should help to achieve the aims of the organisation
- Time specific - Descriptions of objectives should also include timescales of what is required by when. It should have a start and a finish date.
There are many objectives set for Khera Doaba stores one is to increase the number of sales made in a certain amount of time. This shows the SMART objectives because it is specific, measurable, achievable, relevant, and time specific.
Aims and Objectives All Businesses exist to either produce goods (such as cars furniture and textiles) or to provide a service (drive you to your destination, i.e. Taxi). In some cases a business will provide both. In order to survive a business needs to provide a product or service that its customers are willing to pay for.
The aim or aims of a business is a target, which it wants to achieve: Some businesses such as those in the private sector exist to make a profit their aim to succeed is to ensure that there are costs, which are not greater than their income. The aim of some businesses is to expand, to be come national or international companies. Some businesses aim is to sell as much of their service or product as they possibly can, or aim to beat sales of rival companies by either lowering their prices or providing better quality of services or goods.
Aims and objectives
An aim is a long term goal of a business and an objective is a short term target that the business will try and achieve in the time set. Overall, if the business has met its aim it is met its objective. The aims and objectives are decided by Mr Putvinder and Mrs Amerdeep Khera. The business aim to:
- Survival in first year of trading –the business had this aim so that they can stay in the Trading business. They achieved this aim by carefully planning out all the financial stages which helped to get the business of the ground and paved the way for expansion into larger premises. When talking to the manager he said that “it was quite hard to estimate monthly sales”. But they came around this because they had done enough researched of the local market. This involved finding out the number of school- aged children in the area.
- Business recycling – there aims is to recycle as much as there products as they can. The business has introduced recycling over the couple of year and also they have recently opened a customer recycling facility out side the store were customers can recycle there products such as:
Khera Doaba stores wants to encourages all there customers to make recycling part of there life they have done this by having boxes out side the stores were customers can just drop of there cans, plastics newspapers etc. by doing this they are environmentally friendly. They also look to save paper that has been used as invoices or just general uses. They have also got recycling bins out side were customers can recycle there paper or there used cans. The picture above shows how the boxes are kept out side the store.
- Improving there profits and increasing product prices– at the moment the business is not making much of a profit. There sales revenue which is coming in from selling product is greater than the total cost involved, which means the business is making profits. They will try to make more profits by having more products. The business would like to invest more money to make Khera Doaba Stores a better place to shop. To achieve this, the business will try to purchase the latest technology available in order to offer the highest quality training for its employees to meet their full potential. Khera Doaba Stores believes that when an employee achieves their full potential they will offer the highest customer satisfaction. “in the long run the business must genertae a profit if it I sto servive and grow”. They would like to expand on there profits so that they can expand on there store. they will do this by bring in new products and increasing price.
- Expansion of the business – in the next year, the business looks to expand the store by at least 14 feet. The business is not yet in a financial position to expand the business. The expansion will take place at the back of the store. The first picture shows the wall that is going to be knocked down and the second picture shows were the expansion will be taking place. They look to this with the profit they make each year. This would enable a much larger shopping range and more shopping space. After they have expanded on the business there aim is to have a cash machine and if possible a telephone box.
- To improve its reputation – the reputation is a very important asset to the business. if the business gets a good reputation it will help to attract and retain customers. Also with a good reputation it makes it easier to recruit new employees and can improve employee motivation. In the past the business has had a reputation of having bad and out of date food. So this has affected the business because more people are finding out about the bad food and they are not coming to the store. Were people were buying the product then coming back in the same hour saying it was out of date. To solve this problem the business had to give them either a refund of a change in item. This is the business look to change there approach on health, safety and the environment.
After deciding on the aims the business then decides on a measurable objective in order to achieve their aims. The objectives set targets and challenges for the business. Here are some objectives for the business:
- Selling more products then there competitors - they have this aim because all the shops around the area have beer so the promoting of beer is an aim for. They promote the beer by putting up deals such as, buy 2 cans of beer and get a 3 can free or 4 cans of Carling for just £4.00. Another way they promote is by handing out leaflets. They want to sell more products and provide more services than in the previous year. They look to do this by bringing in new goods and by having more employees so that more works gets done in little time. once the business has made profit they are going to put it back into the business to buy new equipment and buy expanding the premises.
- Having new products - if there was a new product that has just came, which was a good seller, and another store had it not Khera Doaba store then this would be a major effect. This is because there will be customers going into that store buying that product. Also there will be customers coming into Khera Doaba store asking if they have the product. Also by investing in new products the business will make more profits and have more customers, which will help there aim of making more profit.
Licensing Act 2003
- 142 Allowing the sale of alcohol to children
- 148 Sale of liqueur confectionery to children under 16
- 149 Purchase of alcohol by or on behalf of children
Under the 2003 Licensing act a person 16 or 17 years old may consume beer wine or cider on licensed premises, provided they are accompanied by a suitable adult and have it with a table meal, however once the meal is cleared away so to must the drink.This act will pay a big part in the business because if the businesses are guilty of the offence under this section then they could be convicted to a fine not exceeding level 5 on standard scale. Also if the business to commit this crime then they could lose there licence. This is why the business has to be careful and ask from ID when customers look younger then 18.
PEST is a way of analysing an organisation’s external environment. This is done by grouping external forces neatly into four areas using a PEST analysis. PEST analysis is very important; PEST is used by organisation to consider its environment before beginning the marketing process. PEST stands for:
These are all external factors that which may influence the achievement of the business. Some examples are:
Businesses decisions are influenced by political, fiscal (taxation) and legal decisions.
This affects Khera Doaba stores in many ways, if the tax rate increases then this would have a negative affect on the business. This is because the business would be paying more for its products and also the prices in the store would have to be increased. This could result in customers being lost because they would be paying more for their products but if the tax decreased then this will result in more money for good, and the prices in the stores would be lowered, therefore bringing in more customers. Here are the different types of tax that will affect the business:
- National Insurance
- PAYE and payroll
- Corporation tax
- Income tax
- Capital allowances
- Business expenses
- Business rates and other taxes
The store currently is paying good money for its products. But if the suppliers were to change the prices of the goods this would have a positive and a negative affect on the business. If they decreased the price of the products, the store would be paying less for the product; therefore they could sell it at a lower price. This could result in more sales being made and more profit. But if the supplier looked to increase the price then this would have a negative affect on the business because they would be paying more for products. This would also mean that Dalip Khera would have to increase the prices in the store; this could result in customers being lost.
Though the economic environment is influenced by domestic economic policies, it is also dependent upon world economic trends. Some of the external factors that affect Khera Doaba Store achievement:
- Energy prices
- Economic conditions
In 2005, the business spent up to £200 on energy-efficient, lighting and refrigeration. Due to energy sources such as Gas and Electricity rising people will have to pay their bills rather than spending there money on other items that Khera Doaba Stores sell, this will affect the business as they will be loosing money and custom.
This could have a affect in the business because an increase in the amount of money or credit in relation to the amount of goods per services available, which causes an increase in the general price level of goods and services. Shop prices inflation is far lower in London than the rest of the UK as the competitiveness of his marketplace continues to keep a lip on shop prices inflation. Trading condition are likely to get tougher in the second quarter and discounting looks set to continues, which is good news for consumers and bad news for shop owners because they will be paying more money for there products and selling them for more money.
Alcohol tax cuts would benefit only producer’s ad the 20% of drinkers who consume 85% of the alcohol. Most of the people that visit the store would not be affected or would barely notice, because about one-tired of adults don’t drink at all, and among those who do, most drink very little. Also within inflation there is the fact of prices of beers and tobacco. Since 20th march the price of beer and still wine increased by 2.6 per cent, adding one penny to a pint of beer and five pence to a standard 75 cl bottle of wine and for a packet of cigarettes 11p increase. This will have a affect on the shop because the store wont increase there prices by 1p but they will have to increase there products by 5p – 10p because the people that by alcohol might not by it any more because the increase in price but the people that do the business will be making more money from it. Also they would increase it by 5p because the demand of the product is higher and the business will want to make more money by increasing the price. This is the same reason why they will increase the price on cigarettes.
If the government wish to increase inflation it might increase taxes to reduce spending. There will be less spending and unemployment might increase. this happens the business would then have to increase its price for each product sold. For example, before inflation, the business buys a box of crisps for £10 making one packet 40p. With inflation the box of crisp will increase to £11.50 making one packet 43p. Also because of this customer might not come to the store because they might thing that their prices are high.
During times of high inflation, people have lss money to spend on luxury items as everything costs more. It there is a high inflation then Khera Doaba store may lose customers and therefore income. During times of low inflation people will spend more money as they have less fear about the feature.
The business can be affected by economic factors because the busines manages its own activities, it success will depend on conditions in the economy as a whole. The business can be affect by changes in:
- Interest rates – this repersents both costs of borrowing money and the reward for saving it. There are expressed as a percentage of the sum of money in question. If there was a interest of 5% and the business borrowed £1,00 they would be charge £50 each year in interest by the lender of money. This changes every month. The base rate also affect the rates sets by all the other UK banks.
When interest rates are high, the business has less money to spend on luxury items such as a holiday or a car. The business will also have less money to spend as they too will have to pay more for their borrowing. But on the other hand, if the interest rates are low then the business will consumer more money. They may want to have more money to invest in ter expantion.
Also another economical factor that came into the business was the unemployment rate, this is the number of people unemployed. In the business there are two different base currently used for official unemployment rate. These are based and used on pages which is called narrow base and is an estimate of the number of employees in employment in the area plus the number of unemployed. The rates are not comparable with the official rated for wider areas, but in practice the different from the narrow base rates is quite small.
The business know who there competitors are, and they know what types of goods they offer, which help the business bring in new products and makes there service and makerting stand out. Khera Doaba stores are in fierce competition with stores around the area to provide the best possible value for money goods, and to offer the most suitable range of products for their customers. One of the ways they are in competition is over price. For example, the manager of the store competes to supply the same products at a cheaper price to customer compared to other stores. This is one of three main weaknesses for the business because thereat are lots of new shops that are going to open in the next coupling of weeks, which will affect the business a lot. There will be less people coming to the store and less money being made. This could also have an affect on its aims and objectives.
There are only a few social factors that affect the store these are:
This is very important to the business. The current location and the environment around the shop are having a very good effect on the shop. This is because Khera Doaba stores are the only shop that sells alcohol, and it is the only shop that has PayPoint. This means that there are a lot of customers coming from different parts of the area. Also another hit to customer is Payzone were people come and top up there phones.
there is one society change that affects the business, this is behaviour. This is because as the behaviour of the business changes, the business must still offer products and services that aim to complement and benefit people’s lifestyle.
the change to the population around the store has a direct impact to the business. The change in population would affect the supply and demand of goods and services.
As the years are going on there is a lot of technology such as mobile phones, computers etc. there are some technological factors that affect my business:
without this machine the business would not be making as much profit as it is now. This machine is very cheap and efficient. This machine provides a good customer service and therefore many customers use it on a daily basis. The machine brings in lots of money. If this machine had a problem or wasn’t not working then this would affect the business. A lot of money
there are a lot of new products coming out such as, new beer, new sweet etc. from the speed in which the product rate is changing Khera Doaba store have to develop there range in products. The store offer a lots of new goods but this may not suit certain customer due to new, cheaper store opening with the same sort of quality. Some customers that coming into the store do not mind paying a little bit more money for the goods they are receiving. This is because Khera Doaba has a good reputation around there areas and there service is at high quality, this is why the customers do not mind paying higher.
They ask me my surname I tell tem Singh they ask me again and I tell tem the same thing
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