I am researching a tyre company called 'Bridgestone'. Bridgestone is a limited liability company and it is begun in Japan in 1931 by Mr. Ishibashi. He dreamed of supplying his nation's new automobile industry with tyres developed and manufactured with Japanese capital and Japanese expertise. His mission, which is to 'serving society with superior quality'. Bridgestone soon became the largest manufacturer of tyres in Japan and expanded its business in other markets in the world. Nowadays Bridgestone is expanding to more than 100 factories in 24 countries in the world. The growth of Japan's automobile industry subsequently propelled them into the top ranks of the global tyre and rubber industry. First of all, Bridgestone started to make tyres and after this success they started production on car components. The Bridgestone Group has diversified more and more, encompassing industrial products like polyurethane foam products, construction materials, parts and materials for electronic equipment, bicycles and sporting goods.
Their ethos is to make life safer, more fulfilling and more fun but of course their major objective is to produce high quality products. The most important thing for Bridgestone is to earn the trust of their customers. So they never neglect marketing, manufacturing, researching and developing, providing service and using new technology.
E1: Classify the business according to its ownership, and explain the benefits
and constraints of this type of ownership
Companies in the private sector organizations are separated into categories. These are;
* Sole trader
It is the most popular type of business which is owned by one person. Sole trader is self employed, because it is easier to set up than any other kind of business. There are lots of sole traders in UK.
They have tendency to rely on banks for overdrafts or obtain credit from suppliers when they start their business, but it is difficult to borrow money because their funds are limited. As the owner they make all the decisions themselves. It can be set up with relatively little capital. As they work in close contact with customers they can encourage customer loyalty.
Unfortunately their hours are long because they do not have any help and they have unlimited liability which means, they are fully liability for the company's debts.
This type of business is also very easy to set up and it consists of between 2 and 20 people. They are providing capital and working together in a business with an objective of making profit. It covers professions like accountants and solicitors.
Partnership means they can raise enough finance, because they can help each other, they share the work load, and support each other when they need to go on holiday and are ill. To become partner it is necessary for the prospective partner to buy their way into the partnership thus providing existing partners with additional capital. Bank prefers to lend more money to them because of the security. Partnership can share ideas and useful skills for their business.
However they may have disagreement when they have to share profits. Also unfortunately they have unlimited liability. In addition, if one partner resigns, dies or is made bankrupt, a partnership will automatically end or dissolved to overcome this Deed of Partnership can be drawn up.
It is a form of business organisation owned and run by its members. It is divided into two types, which are a retail cooperative and a worker cooperative.
If it is a retail cooperative the profits are shared through the interest payments of shares and dividend Stamps which can be exchanged for gifts or money off products. It is declining due to large organisations that can purchase in bulk and sell more cheaply. Cooperative has limited liability and they can appoint a board of directors and also societies are regenerated under industrial and provident societies.
However unfortunately financial organisation do not like lending money to cooperatives because they are not primarily a profit-making organisation and also it they find it difficult to attract the right calibre of managers to run the organisations successfully.
It is to be taken on ownership of a company which has already created an image by individuals who buy into a Franchise. Owner can get money from franchisee.
Different amount of money are paid depending on location and type of business and franchisee will get company image, support from Head Office in respect of marketing, sales, designing of premises, possible transport, expertise, corporate image, initial support, on going support and advertising for their money.
Franchisor will get money from franchisee for initial outlay and 5 -10% of the profits on a yearly basis. The franchisor will expect the franchisee to keep the rules of their company.
Franchises do not have any problem in launching a new business and also there is less chance to fail the business. Business is already published and established so it is easier to raise finance and they will succeed at high degree. Another thing is that they do not have lots of competition and they can always be supported from franchisor so it is easy to solve problems. In addition, they are economies of scale and they have established product so they do not have any development costs.
Unfortunately they are less independent than a sole trader and they are not allowed to sell business without franchisor's permission. Also they do not have automatic right to renew business. Another thing is they have to make continued royalties for franchisor.
* Limited company
Limited company is divided into two types of limited companies (Private Limited Company and Public Limited Company). Both of them have to have at least two shareholders. If they wish to set up as a limited company the promoters are required by law to provide a number of legal documents to the Registrar of Companies at Companies House, Cardiff. These are:
Memorandum of Association
It show how the company is managed, who are the name of business, owners, business address, objectives of the business, a statement of limited liability of the members, amount of capital to be raised by issuing shares and the agreement of the founder members to form a limited company.
The Articles of Association
It controls the inside working of the company. It includes details like procedures for calling a general meeting of shareholders, the number, rights and obligations of directors and shareholder voting rights.
After these documents have been produced, the Registrar at Companies House will issue Certificate of Incorporation, which means they can start trading.
* Private limited company
Many small to medium sized companies trade as private limited companies. This is often once they have been a sole traders or partnership. It is a way of expanding their operations. Their shares are only allowed to be sold to friends and relations. They cannot be sold on the stock exchange.
The advantages of this are money can be raised through the sale of shares and it never has to be repaid. All shareholders have limited liability which means they can only loose the money they have invested as they company receives its own identity. Another thing is that owners can appoint directors on their record of achievement and business knowledge.
On the other hand shares cannot be advertised or sold on the stock exchange.
* Public limited company
This is another type of limited company. Public limited companies are among the largest and the most successful organisations in the UK. Bridgestone is the public limited company. As a Public limited company, Bridgestone is able to sell shares through the stock exchange and therefore should they need to raise more capital they can encourage the general public to purchase.
* Company can set targets clearly and ensure objectives can be met. As accounts have to be published, the management needs to make sure that everyone is working towards the same objective.
* Being a Public Limited Company the control of the company is maintained and the management constitution is better and stronger than any other type of business.
* If Bridgestone want to raise more capital they are able to borrow from the bank or sell more shares.
* Being a large company means they will get more media attention, also they can advertise more freely as they have more financial stability.
* They are able to attract better staff and therefore create a more stable working environment. They are big enough to offer staff incentives and therefore recruit the cream of all staff.
* Owner has limited liability, so owner will not lose all their personal possessions.
* By going public it means their stock and shares can be bought by anyone and therefore competitors could try and take them over.
* It is difficult to manage effectively due to size.
* Accounts are made Public.
I have inserted into my coursework company details obtained from the Companies House web site. This shows that the company although run in England is a Japanese company, it shows the company number, date of registration and what the business sells. In order to register Bridgestone had to complete the Memorandum and Articles of Association.
Name and Registered Office: Bridgestone Corporation
10 - 1 Kyobashi 1
Company No.: FC020122
Country of Origin: Japan
Date of Registration: 11/02/1997
Branch No.: BR003796
Name, Address: Bridgestone Corporation
Storage Transportation of Tyres,
Tyre Testing Etc
Unit A, Hurrucane Way
Axis Park, Langley
Berkshire SL3 8AG
Date of Open: 25/12/1996
Type of Business: Storage Transportation of Tyres, Tyre Testing Etc
Registered at: Cardiff on 11/02/1997
Country Origin: Japan
Tokyo District Legal Affairs Bureau, Tokyo
Governing Law: Commercial Code of Japan
Legal Form: Public Limited Company
No of Branches: 1 Open
Discounts held at Company/
Branch Office: BR003796
Accounts delivered to: 311295
Objects of the Company: Design Manufacture & Sale Automobile Tyres and other rubber product
Bridgestone is a very big company and it is expanding into 24 countries, so they need many staff to work. It is a difficult business to control. However as Bridgestone is a large company they can advertise and promote the company and products better and wider and also the owners of the company can be satisfied that the business will be successful. The owners can recruit good managers to lead and meet objectives and work the company better. In addition, it can borrow money from bank if necessary, because it is more reliable and more collateral. I think Bridgestone has some disadvantages as well.
E2: Describe and explain the objectives of the business
All companies need objectives to survive, companies most important objective is to make a profit, to give good value and service and to provide quality. When they decide their objectives, they always have to think about consumers. It is very important to think about what are consumers' needs and want are as without the customer the company cannot exist. Objectives are, in other words, aims in the company's business which they have to achieve. When they decide their objectives, they will imagine some ideas and vision of their products that they are trying to make. It is easy to decide products because they know what they need to do for their products. Objectives are set to succeed in business, so they can measure performance that they should do like advertising and market research. Objectives are geared at everyone in the company so that they can evaluate their own work.
Different areas have different objectives, for example objectives need to cover market standing, productivity, profitability, worker performance, innovation, financial and physical resources and managers' performance.
Objectives in Bridgestone
These are some objectives of the Bridgestone company:
* To make life safer, more fulfilling and more fun for everywhere. It means that pursuing the highest quality in products, in service, in technology and in all our cooperate activities. By devoting ourselves to attaining that goal, we earn the trust of our customers.
* They strive to define the standard for excellence in every tyre category in every nation around the world. Wherever vehicles carry people and goods, they supply world-class tyres and supporting those tires with world-class service.
* Developing global product to support their global marketing.
* Developing global manufacturing to offer products into markets smoothly. Bridgestone companies manufacture tyres and other products at more than 100 plants in some two dozen nations. Those plants ensure reliable supplies of products for people in more than 150 countries. Rigorous quality control assures customers of dependable quality wherever they buy and use our products.
* Making top-quality tyres. To do it, they make synthetic rubber, carbon black, steel cord, textiles fabric and other vital materials and transform them into tires for nearly everything that moves on wheels.
* To help customers get the most from their tyres and vehicles.
* To create better tyres, they deploy the most advanced scientific resources in their industry.