Business at Work - ASDA

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Business Studies

Unit 1 (Business at Work)

E1 - Type of Ownership

Asda is a household name in the U.K and is renowned as one of the leading national supermarkets. Asda is a nationwide chain of supermarkets, which has branches across many parts of the world. More recently Asda was taken over by the retail giant Wal-Mart which has a retail empire in the USA. Asda is a public limited company. It is open to the public; therefore stakeholders can purchase shares into the company.

Asda is supermarket, which aims to provide its customers with the best possible goods and service with its permanently low prices. Asda's aim is to provide the best service to its customers and beat its competitors. Asda has branches all over the world, it is very well known by the public as well as the supermarket industry. Asda is in the industry of oligopoly as it has many competitors.

There are many advantages for Asda in being a public limited company but at the same time there are also several drawbacks. Asda is a large company, therefore it has its shares bought and sold on the stock exchange. This is beneficial as large amounts of capital can be raised very quickly.

However having shares quoted on the stock exchange is very expensive. Furthermore a crucial disadvantage for Asda is that control of the business may be lost by its original shareholders when large quantities of shares are being purchased perhaps as part of a take-over bid.

Asda have stated that selling shares on the stock exchange is a risky business, as they have good days and bad days. If the issue of new shares coincides with a bad day this provides the company with a lot of chaos.

For instance if Asda hopes to sell 1 million shares at £1 each and all goes well, it will raise £1 million; but on a bad day it may only be able to sell half these shares at the given price. Therefore there is quite a deal of luck involved, and the date for the launch of new shares has to be chosen well in advance. Some companies are very unlucky with this as they launch their share when people are gloomy about prospects in the economy. However before the launch of new shares Asda arrange a 'placing' with a merchant bank. The merchant bank then recommends the companies shares to some of its share buying institutions with which it deals, i.e. pension funds and insurance companies etc, they may then agree to buy say one-tenth of the new shares. This way the merchant bank makes sure that the shares are placed with large investors before the actual date of issue comes around. Then even if it is a bad day on the stock exchange the company's money is secure when the actual date of issue comes around.

One of the main advantages in being a public limited company is that if the company gets bankrupt it will not loose everything, but rather just the business. For example the owner of Asda will not loose their house or personal belongings etc as they would have limited liability.

Asda is continuously having price rollback campaigns every month and providing its customers with the best service and goods. It is able to compete with its rivals due to the fact that its status as a successful PLC (which is owned by the retail giant that is Wal-mart) has allowed it to use its vast financial support and human resources to effectively compete with rival supermarket chains.

E2) - THE MAIN ACTIVITIES, AIMS & OBJECTIVES OF ASDA

It is the mission statement of Asda, 'To be the worlds leading supermarket'. It has many aims and objective. Asda believe that by following its aims and objectives, it can successfully turn their mission statement into a reality.

Aims

In relation to other supermarkets, Asda is one of the fastest growing supermarket chains. However in order to maintain its lead position, Asda states several main aims which it constantly strives to achieve. These are as follows:

* To maximise sales through competitive pricing and heavy advertising campaigns

* To make the supermarket a happy and an enjoyable place for the staff to work together in harmony

* To ensure complete customer satisfaction and minimise any complaints about their products or prices.

* To make shopping at Asda a completely new, unique experience which provides customers and their children with a convenient, warm, welcoming, happy and safe shopping environment.

* To keep the customers happy and satisfied by providing them with the best and latest products and services at the lowest prices, without having to compromise on quality.

* To provide as much relevant information about products and services throughout the store, in a manner which is understandable to the customer.

* Be as environmentally friendly as possible

Objectives

Undoubtedly and inevitably, the most significant aim of Asda, as with any

other retail organisation is to be extremely profitable. However, in order to

achieve the aims highlighted above and hence increase its profits turnover,

Asda states the following objectives to show how they intend to satisfy and

accomplish their main aims and targets.

The objectives of Asda are as follows:

. As their main aim is to maximise sales and profits, Asda uses media such as radio, newspapers, magazines and largely television to heavily advertise its advertising campaigns about the latest promotions, price cuts and new product lines and services. Such advertisement campaigns and promotions have given Asda a loyal customer base, in addition to attracting new customers as well as an envied reputation for quality products at low, low prices.

2. Asda want to make the supermarket an enjoyable and happy place for the staff to work together in harmony, as Asda are aware that the attitude of their staff reflects back on customers and the service they ultimately receive. A pleasant working environment is created for the staff in which to work in, as well as benefits and incentives such as staff discounts, company pensions, beneficial share packages and opportunities for job promotions and salary bonuses.

3. In order to achieve complete customer satisfaction and minimise any complaints about its products, services or staff, Asda ensures it provides customers with a customer service section at each supermarket, whereby customers can communicate the complaints and enquiries, in addition to registering any comments as regards to products and services in the customer comments log-book. It prides itself in its commitment towards customer satisfaction.

4. In order to make the experience of shopping at Asda as warm, safe, welcoming, pleasurable and as convenient as possible, Asda has renewed many of its larger stores by providing the all-American style of shopping whereby customers have all the services and products provided usually by local businesses, at hand under the convenience of one roof. Many of the larger branches of Asda now have in-house cafes, dry-cleaners, opticians, bakeries, fast-food take-aways and butcheries in addition to having their own petrol forecourts and car-wash centres. Many branches have now diversified into the retail electrical, home ware and clothing market in addition to providing financial and insurance services.

5. To keep the customers happy and satisfied with the products, prices, services and staff. In order to ensure a loyal customer base and continue to attract new customers, Asda ensures they take advantage of their massive buying power and leading position in the supermarket industry in order to purchase the best quality goods and latest products at the most competitive prices. These savings and product promotions and price-cuts are heavily advertised both through the national media and throughout its branches nationwide. Furthermore, as an additional precaution, Asda prides itself on the fact that customer satisfaction with its products and prices are always maintained as its staff continually check prices locally on a weekly basis, in order to ensure the supermarket always provides the lowest prices around.

6. Asda strives to provide as much relevant information about products and services throughout the store, in a manner, which is understandable to the customer. It intends to achieve this by communicating various types of information such as public safety notices, new promotions and products and services, price reductions, charity fund-raising events through its regular customer magazines, leaflets, posters, customer information desk and staff.

7. Wherever possible, Asda strives to be as environmentally friendly as possible. This includes minimising product packaging, using recycled paper for its magazines, leaflets and receipts, building new supermarkets on existing industrial sites etc;

E3 - INFORMATION COLLECTED BY ASDA TO MEASURE ITS SUCCESS

As with many organisations Asda likes to collect information to measure its success. This is done in many ways including using MIS (Management Information System). However one of the main methods Asda uses to measure its success is by using statistics and graphs which allow them to view future trends and also enable them to see whether the company is making a profit or a loss. The company also uses annual reports which are produced yearly and allow the company see whether it is succeeding or not. Share prices are also very important, as any organisation would wish for more stakeholders to buy shares into the company. A decrease in share prices shows that there is something wrong within the organisation, therefore this in itself is a measure for the company's success. Often the share price of a PLC is a good indicator of how it is performing in relation to its previous performances.

Annual growth is another method used to measure the company's success especially considering the fact that Asda is now part of the Wall-Mart retail empire. Asda constantly strives to widen the price gap between its competitors in order to meet its aims. This also attracts more customers, thus it allows Asda to view whether it is doing better than its competitors such as Morrisons and Tesco. This is to say that more stakeholders would invest into the business, as they would see it is succeeding and doing better than its competitors.

Asda believe that employees are an important aspect of the business as they have direct contact with the customers. Asda is currently Britain's biggest employer of employees aged over, 50s with more than 20,000 working in stores, depots and offices. Asda claims that one of the key drivers to its business is to be 'The Most Enjoyable Place To Work'. In March 2002 Asda was named as 'Britain's Best Company To Work For' in a nationwide survey of UK businesses. And again, this year, for the third year running Asda has featured in the top 10 companies to work for with flexible working. This is to say that Asda is succeeding it meeting its objective 'To Be Britain's Best Company To Work For'. For Asda this is also another of success to see how well the company is doing. More recently, the general public have been provided with evidence of this simply through the television advertisement campaigns, which regularly pay tribute to Asda employees.

As with many organisations Asda also uses questionnaires to measure its success. These allow the company to receive feedback on what their customers think about the organisation and where they need to make improvements, if receiving negative feedback.

E4) - THE VARIOUS FUNCTIONAL AREAS WITHIN THE ASDA ORGANISATION

As with any nationally large, professionally established company, Asda has divided its organisation into four different functional areas of business. These are the Human Resources, Finance, Customer Services and Marketing and Sales divisions of the business. This section of the report will identify and provide further details of these four different functional areas of business within Asda, in addition to explaining how each contributes to the business activities of Asda. An explanation and illustration of how these four departments work together in order to achieve their aims and objectives is provided in this section.

Human Resources Division

The purpose of the Human Resources department at Asda is to keep all their staff and personnel satisfied with their employment and work conditions, in addition to being responsible for staff promotions, recruitment and selection of future staff, staff evaluations, terminations of employment and legal employment issues. This department is mainly concerned with employees who work for the company in addition to the overall responsibility for ensuring Asda continues its success as a great work environment for the staff.

The department is responsible for recruiting new staff to the organisation. The cost of recruitment may be high but the costs of mistakes are even more expensive. The Human Resources department plays a vital contribution towards the day-to-day business activities of Asda. I personally believe that perhaps it is one of the most important divisions of any large organisation simply due to the fact that without the rightly qualified staff for the thousands of posts within Asda, all other departments would cease to operate efficiently and effectively. Appointing someone who cannot do the job either to the standard required, to the satisfaction of management or who does not work well as a team member with other members of staff can be potentially disastrous. It is for this reason Asda aims to keep their staff turnover as low as possible, that is to say, to retain the staff they recruit. This is in order to not only keep recruitment costs down but also ensure that staff are content in their workplace so they continue to remain loyal to Asda for many years down the line. This is another reason why Asda actively encourage over 5os to apply, as they can potentially be very loyal employees.

This department is also responsible for taking on the responsibility for training staff. But the question one must ask here is why should companies want to continue to even train their staff after they have started work?

There are several important reasons for this. Some of these include:

* New members of staff need to be familiar with the company's organisational methods as they may be different from the ones of their previous workplace.

* As you change jobs, you also need to change your skills e.g. the company may practice new methods of working which may require new skills, which you may not have used before e.g. computerised filing and stock-taking etc;

* The staff may be interested in improving and extending their own personal work skills so they can take on more work and improve opportunities for promotion e.g. I.T skills, book-keeping etc;

* People are only motivated and fulfilled in their work if they are set challenges and opportunities to continue to learn and develop their work and social skills.

There are many various job roles within a Human Resources department. Listed below are a few examples of the job roles one would expect to find at the Human Resources department within Asda:

o Recruitment officer - responsible for selecting and recruiting staff

o Security officers - responsible for all security staff

o Human resources manager - Managing the human resource department and staff.

o Health and Safety officer - Checking all health and safety matters, monitoring and preventing accidents

o Staffing/Personnel Officer - keeps staff records and monitors their welfare

o Training and Development Officers - ensures old and new staffs continue to receive up-to-date training and information.

o Legal officer - responsible for ensuring that Asda abides by the employment laws.

Marketing and sales

The Marketing and Sales department at Asda try to identify what the customer's needs are and seek to provide them. The staff aim to basically achieve high product and service sales by initially putting themselves in the shoes of their potential customers and 'view', through their eyes, what marketing and sales techniques are the most effective and have the most impact on the customer. From this unique perspective, the marketing and sales team are able to achieve high sales by marketing and targeting products and services through the most effective means of advertising and communication. To Asda, the marketing department is more than just a split function, in other words, everyone is focussed on gratifying the customer's needs by providing the right products, the latest items at the right time at the right price. An essential criteria for a member of the marketing and sales team is to have excellent skills in creativity, prediction, communication, research, sales and insight into what customers needs are and how Asda can best satisfy these through their product ranges. Asda's Marketing department try to keep an interest in what else they can do in addition to satisfy the customers needs and try to find out what additional needs the customers have, which they or other supermarkets have not realised or taken full advantage of.

For instance, in the past, the marketing and sales teams have very successfully identified that their customer's needs demanded better facilities such as cafes, toilets, various types of trolleys and car parking spaces for families and the disabled, the availability and convenience of other regular high street services such as petrol forecourts, car washes, dry cleaners, opticians and more electrical and home ware goods.

More recently and much to the annoyance of other supermarkets, the marketing and sales team at Asda have lead the way in very successfully identifying that more conveniences are needed for the average hard-working family and so have introduced 24-hour openings, internet shopping, better baby facilities, home deliveries and take-away style shops in which customers can simply take-away freshly made pizzas and authentic hot Italian, Chinese and Indian take-aways. Furthermore, once having established this need and potential for increasing sales turnover, the marketing and sales department then successfully launched an advertising campaign through television and in-store taste sessions and posters to tempt customers to try their delicious take-away foods. The team have also been successful in tempting those customers who perhaps had no intention to purchase hot food from the Asda take-away food counter, by providing taster sessions, attractive and tempting presentation of the various foods on offer and effective branding and colourful packaging. The responsibility for designing, branding and attractive product packaging lays also with this department.
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A corporate company such as Asda always try to keep one step ahead of the customer by finding out their needs and fulfilling them. Asda puts its customers at the top of its priority list in every operation it takes on. When Asda launches a marketing and sales operation for a specific product or service, its marketing team work on the best techniques for advertising and communicating to its customers how their specific products can fulfil their needs whilst the sales team take on the responsibility for actually providing the goods or services their customers require. This team ...

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