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Safeways unit 1

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Introduction

SAFEWAY 1: Ownership of the business Safeway is a public limited company (Plc), meaning their business has shares for the public to buy on the Stock market. Shares of the company can be floated and then traded on the stock market. Therefore any member of the public can become the owner of their part of the company. This also means shareholders who own part of the company's share are taking a risk, such that if the company are suffering from any financial losses and goes in to liquidation, that shareholder will be in loss. However, the owners have legal liability to only the value of their initial investment, therefore the owners cannot be forced to surrender personal wealth. They could offer their share to the public through Stock Exchange. There are advantages and constraints of Safeway being a public limited company (Plc). The advantages are, The greatest advantage of Safeway being a public limited company is that, owners have limited liability which means that owners are not liable to the company's debts, only their initial investments into the company. Safeway being one of the major retail stores in the UK, take the form of multiples (company with many branches and stores), which have steadily grown over the years by acquiring other new stores. This is though issue of shares for sale in order to acquire capital for expansion to fund new projects, instead of only relying on the sales of groceries. Safeway being a public limited company acts as an advantage in terms of suppliers, because suppliers are likely to offer listed companies with more attractive credit facilities, this is because they will be thought less likely to default on payments than private limited companies. Safeway being a public limited company will be regarded by lenders as representing a lower risk investment than a private limited company. They are therefore likely to benefit from smaller interest charges on any loans obtained. ...read more.

Middle

They implemented this new commercial strategy for their business to deliver a goal, for Safeway to be the first choice retailer for those customers who have the opportunity to shop locally in one of their stores. Safeway states that, for the first half year their performance was solid with pre-exceptional profit growth of 4%, achieved in a very competitive market place. That is by using their strategy and objectives, it was encouraging and given then progress with new formats and ranges, helping them to look for ward in delivering continued growth and good results for the year as a whole. On the second half results were affected by the announcement on 9 January of the proposed merger with Morrisons, where their prices needed to be slashed down. We have previously mentioned, that Safeway derived solid profit growth in the first half year, despite that the first half of the previous year, additional �8 million of transitional revenue casts for reformatting stores. Including these costs, operational profit rose by 4% to �222 million. For the year as a whole, operating profit decreased by 4%to 3398 million. These occurred because of the funding level of some suppliers who were understandably concerned about the future ownership of the business. However they tired to use their strategy to regain themselves. Well Safeway, despite all these exceptional items and problem (not included), looking at their Annual Report (year ended 29 march 2003), at their profit and loss account from 2002-2003, where their retained profit for 2002 is �1,149.7 million, and for 2003 is 1,218.9 million. And their total gain since the last Annual report is �32.1 million in 2002 and �168.1 million in 2003, that is after all prior year adjustments such as dividends paid, shareholders' funds e.t.c. Which shows a substantial amount of increase between both years. But then, their earnings per share being in 2002 24.0p and in 2003 16.4p, also showed a decrease. ...read more.

Conclusion

Land - this refers to the areas at which the business is located and is the location consists of the materials and resources need for the production of the business. Businesses comprising of these factors of production need functions to carry them out, to contribute to the efficient running of the business. Therefore the functions are then divided on to functional areas, including; Finance department Human Resources department Production department Marketing department Administration department Safeway being a plc has different functional areas of their business and using the factors of production to guide the functions of the business such as, converting inputs; money, office equipment, people into output. For example, the people who work in Safeway's stores are central to the delivery of their business goals. It is the skills, flair and enthusiasm of their people that ensure success to the business. This is the investment they are making in the training and development, because making staff more knowledgeable about the product offering ensures a high degree of customer satisfaction. This will refer to the labour aspect odd the factors of production. Safeway relies on the efficiency of their functional areas to be carried out successfully by meeting their business strategy, aims and objectives For them to achieve their best Alternatively, Safeway is a large and complex business and a key theme of the organisation is communication both up and down the organisation as well as between functions. Safeway's main business is to operate 460 stores and supermarkets in the Retail Food sector and considering that they are increasing the number of people working for then, more socialized people are required for the different functional areas of the business. The major functional areas of Safeway are; Finance department Human Resources department Production Department Marketing Department. Administration department 3.1 Diagram showing how the functional areas of Safeway fit together Note: The research and development department is not included because Safeway does not have a separate department for that because it comes together with the marketing department. ...read more.

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