Business Ownership
There are many ways in which business can be organized. It can be from a small one-man business to a multinational organization. The business ownership is mainly divided into different sectors. In this part I am going to explain about two types of business ownership.
. Private limited company
2. Public limited company (plc)
Private limited company
The limited company is fast becoming one of the most common forms of business organization. When a small business expands there is need for extra capital. The proprietors may start the business as a limited company just to obtain the benefits of limited liabilities. The partners may decide to turn the business into limited company to raise this capital. A limited company is a separate organization in law from its shareholders and directors.
The main points of private limited companies are:
* The name of the company must end with the word 'limited'.
* There is no limit to number of shareholders.
Advantages
. Limited company can continue even after the owner dies.
2. With limited liabilities company is able to attract capital from public.
3. The founder of company can usually keep control of it by holding majority of the shares.
Disadvantages
. The company is not allowed to appeal to public for extra capital.
2. The accounts of the company must be filed annually by the Registrar of the company.
3. The shareholders of the company may be able to transfer his/her shares to someone else only with the consent of other shareholders.
4. The company is unable to trade shares publicly on the stock market.
Public limited company (plc)
The second type of limited company is public limited company (plc). This is largest and most important business unit. Public limited company must stated in the Memorandum of Association that the company is public. The process of creating a public limited company is very similar to that of creating a private limited company. The name of the company must end with the words 'public limited company' (plc). The most common examples of PLC are football clubs and supermarkets.
Advantages
. The public limited company has independent legal entity.
2. It is allowed to appeal to public for extra funds/
3. There is no restriction on the transfer of shares.
4. They can sell their shares publicly on stock market.
Disadvantages
. The accounts of the company must be published to public.
2. The owner can normally exercise little control over it.
3. The formalities are quite complex.
Business objectives
Business objective is a goal that every business wants to achieve to be successful. You can find these objectives in the mission statement of the company or in details in the corporate strategy. In this they clarify for everyone what the business is working to achieve. They aided the decision making process and choice of alternative strategies. They provide the means by which performance can be measured and actions can be controlled. Sainsbury also have many objectives that you can find in their mission statement. They want to be consumer's first choice for food, products and outstanding quality. They want to give great service at a competitive cost by working simpler, faster and together. Sainsbury's wants to be the leading store in United Kingdom by staying above their competitors.
The main objectives of Sainsbury's are:
* Outstanding Quality
* Great Service
* Competitive Cost
* Customer Satisfaction
* Store Refurbished
* Improving Shares
* Major Benefits for Customers
Outstanding Quality
Quality food is a priority of Sainsbury's customers and a key component of the Sainsbury's brand. Sainsbury have invested in their food ranges during the year, they have improved over 320 products. Their own labels are sub-brands amongst the best in United Kingdom. They are developing stronger complementary non-food offer through Adams children's clothes, Jeff & co. and ...
This is a preview of the whole essay
The main objectives of Sainsbury's are:
* Outstanding Quality
* Great Service
* Competitive Cost
* Customer Satisfaction
* Store Refurbished
* Improving Shares
* Major Benefits for Customers
Outstanding Quality
Quality food is a priority of Sainsbury's customers and a key component of the Sainsbury's brand. Sainsbury have invested in their food ranges during the year, they have improved over 320 products. Their own labels are sub-brands amongst the best in United Kingdom. They are developing stronger complementary non-food offer through Adams children's clothes, Jeff & co. and a trial of home enhancement range. They are working to develop their own health and beauty offer through up-grading their in-house capability.
Great Service
Delivering great service is a main objective of Sainsbury's business transformation programme. Sainsbury had made great strides last year by retraining their staff to serve their customers better. Their mystery shopper is now embedded in the company, this and their customers satisfaction index demonstrates the progress they are making.
Competitive Cost
Sainsbury monitor 10,000 lines weekly to ensure that they remain competitive in the market. They have reinvested some of their cost savings in price adjustment. Alongside this they continue to run a highly attractive, sustainable promotional programme. They have set up many promotion plans to attract more customers to their business, like buy 1 get 1 free policy.
Customer Satisfaction
Despite all the work in stores Sainsbury still focused on the high standards their customers expect. They know that their customer's satisfaction drives sales and that the investment they have made in improving their stores.
Store Refurbished
Their store reinvigoration has now been implanted across more that a third of their estate and they plan to improve further 70 stores during the coming year. A major refurbished now takes place under 12 weeks ensuring that the improved offer is available to customers as quickly as possible.
Improving Shares
Sainsbury will improve their market shares by 2/3% to increase sales of food by 3.5%. Directors are proposing an increase in the final dividend of 5% from 10.30 pence to 10.82 pence per share.
Major Benefits for Customers
Sainsbury has to make many improvements, which will make a major difference to customers, enhancing availability and ensuring a freshest product, are on the shelf. They are developing groups to help bring their plans to life and, through their largest ever-training programme, involving and engaging their colleagues.
Overall cost benefits will include a reduction of least 25% in warehouse costs and transformation programme will around $ 100 million.
Functional areas in business
Businesses are divided into different functional areas, which are specialized in dealing with different matters involving the business and its activities. All businesses or organizations have different functional areas to help them to achieve their aims and objectives and to be successful in the market and real world. There are many different functional areas in businesses, but I will explain about few and important functional areas of the Sainsbury.
The functional for Sainsbury are:
* Finance
* Production
* Human Resources
* Marketing
* Administration
* Research and development
Finance
Finance department is known as the backbone of every organization. It is very important department in every business. The purpose of using this function is that every business needs to look after their financial sides. Sainsbury's finance department is concerned with creating an effective balance between from where to raise the finance and where it should be used, so that it can provide the maximum return to the company. Finance function also deals with financial operations such as salaries, taxes, paying bills and keeping information of accounts for all departments within Sainsbury. This department is responsible to keep track of all the money coming in and going out of business accounts. The financial staff will check regularly about the company's expenditure and income. This is very important for every business, as they would need someone to go over and finalize how well the business is doing financially.
Under finance function Sainsbury has maintain two departments:
. Finance department.
2. Accounting department.
Finance department.
It decides about the capitalization of company, the capital structure of the company, return on investment to be earned by the company, how to manage the earning of the company, when to raise the capital, from where to raise the capital, what should be the cost of the capital and what should be the source of finance. The person who is incharged of this is known as accountant or chartered accountant.
Accounting department.
It deals with recording the financial information and processing it for the managerial use such as making balance sheets and profit & loss accounts, interpreting the financial information by calculating ratios (ratio analysis), using capital budgeting techniques for project appraisals to calculate the financial viability of the project. Similarly making competitive balance sheets, doing funds flow analysis to determine the working capital position of the company. Doing cash flow analysis to workout the liquidity position of the company. All this is done for the purpose of processing the information for managerial use. Accounting department also deals with wages and salaries calculation.
Production
The production function is department, which converts input into output effectively. Sainsbury production management department is not only termed as production department but also referred as operations department. Sainsbury's main operations are concerned with dealing with customers in service organization for e.g. greeting people as they enter in Sainsbury's store, dealing with customer queries over the telephone, in telephone banking and insurance.
So in service industry like Sainsbury the production function involves organizing resources effectively to offer the final consumer the best value and quality. Sainsbury is a successful blend of production of services and goods.
Under goods category Sainsbury is producing food products, furniture, and flowery culture and in service it includes banking, insurance, supermarkets and petrol stations.
Sainsbury's production department is split into six main sub-functions:
. Production and planning department
2. Purchasing department
3. Consumable stores department
4. Technical support department
5. Quality assurance department
6. Works department
Production and planning department
Under production and planning department the targets and standards are set about the quantity and quality of the products for the production process.
Purchasing department
The purchasing department is responsible for purchase of raw materials, equipments and components to be used under production process by the various departments.
Consumable stores department
This department is responsible for maintaining the stock of tools, spare parts, raw materials, oil and lubricants to be used for production process.
Technical support department
This department will be responsible for doing the new researches regarding the design of the product. It will be responsible for estimating cost of producing in different quantities by using different methods.
Quality assurance department
This department is having concerned over the total quality management and quality assurance of the products.
Works department
Works department is concerned with actual manufacturing of the products.
Human Resources
This is the most important department in many organizations. Human Resources department of Sainsbury covers a variety of activities. It performs many various roles in the organization. The work of HR is to communicate with all other areas within the company. In this department employers ensure that their employees are provided with safe work place, methods, appropriate training and more over safe equipments. HR also deals with recruiting, selection, training and development, compensation, promotion, transfers, demotions. In nutshell we can say that it is playing the following roles in Sansbury.
. Establishing a major policy that covers the place and the importance of the people in the organization.
2. It is concerned with helping other managers to develop their work for e.g. helping production managers to appoint and train new production workers.
3. It is concerned with looking after people at work and their needs.
4. It is concerned with acting as an intermediary between different groups.
5. It is also concerned with compensation, remuneration, bonus pays and fringe benefits such as implementation of health and safety rules.
6. It is also concerned with educating the employees to make them capable of competing in the changing circumstances.
Marketing
Marketing is essential to the survival of most organization. It is fast paced, dynamic, highly visible and rewarding to its successful practitioners and frustrating. The main purpose of using marketing is that to find out what customer needs and providing it. In other words, marketing is looking to the business through customer's eyes. When the need is identified the company will try to sell these needs to customers. These needs can be identified through market research. Marketing is useful for further success and profit, like Sainsbury marketing is a huge part of the activity. Their main aim is to one step ahead of their customers by identifying and anticipating their needs.
Asking someone for his/her views and opinions is called market research this has to be carried out by asking appropriate questions. In marketing terms this is called survey. Sainsbury conduct this survey by face to face, through Internet and through customer's suggestion boxes by asking questions like.
For e.g.
* What more products do you like to be in Sainsbury?
* What kind of improvement do you like to be here?
* What prices do like?
Marketing function of Sainsbury is very important because it is responsible for anticipating the market demand, doing the research about consumers taste, behaviors and preferences, identifying marketing opportunities, making the strategies to compete with its rivals. The marketing objective is to increase Sainsbury's lead over the United Kingdom. Competition in business performance attracts more customers and retains more profit.
Sainsbury advertise through TV, radio, press, direct mail, Internet and promotion. Marketing will run promotions with partners who reflect equal brand value to Sainsbury. They have to make sure that promotional plan is delivered with high quality communications. Sainsbury's brand must have strong incentives with national coverage and covering various market sectors but ensuring the brand is not devalued. The types of promotion Sainsbury use include BOGOF products.
