Both businesses also range in different activities, whereas Richer Sounds sell hi-fis and home cinema systems etc, Sainsbury sell mainly food products but they also sell non-food related goods as well such as stationary and electrical goods, giving them another great advantage over Richer Sounds. Both business sell goods from stores, online and orders can be made over the phone as well.
RICHER SOUNDS OWNERSHIP & LOCATION
Richer Sounds are a Public limited company. They are a limited company so that if they come across any financial problems their owner and founder Julian Richer wouldn’t be responsible for any debts. Even though Richer Sounds are a plc they are unlisted from the stock exchange, this is because they don’t want to lose any control of the company to shareholders, and Richer Sounds want to have full control over their company. Also if they do become listed in the stock exchange they will have to have certain requirements such as File full accounts, Have a minimum issued share capital of £50,000 etc. They will have to abide by all the legal requirements under the various Companies Acts and the Finance Act, which means the directors, will have to take up certain legal duties, such as to make sure that proper accounting records are kept. Being a unlisted public limited company is suited to them because they are a large company and by being unlisted they will have one less thing to worry about, which is shareholders, because they won’t have any.
The business is located mainly in the UK, they have a couple of stores outside the UK as well and their main warehouse is in Lancashire. Richer Sounds first store was in central London at the London bridge walk. When choosing locations Richer Sounds consider two main points which are; to make sure that there are a lot of customers nearby who would actually be interested in purchasing from them, and to keep it as far as possible from another Richer Sound store, so that they don’t end up sharing customers instead of attracting new ones. Their stores are essential for customers because customers won’t have to look every where for their stores since their often on the corner of a road, which makes it really visible to see, and their mainly nearby a parking, so that customers won’t have to worry about finding parking space on the road.
Richer Sounds consists of only the tertiary sector which means that they only sell products; they don’t manufacture the products themselves or make it from the raw materials. Richer Sounds could make more money if they actually manufactured their own products like Sainsbury’s does, this way they won’t have to pay the main manufacturer a bit of the profit for selling the goods.
SAINSBURY’S OWNERSHIP & LOCATION
Sainsbury’s are a public limited company. Their main advantage of being a Plc is that they can raise large amounts of capital very quickly, by selling shares through the stock exchange. There are also disadvantages of being a Plc, because they will lose control of the business to shareholders if large amounts shares are bought by the shareholders. J Sainsbury is leading UK and US food retailer.
The company has a dividend reinvestment plan which lets shareholders to reinvest their cash dividends in the shares bought in the market through an arranged share dealing service. This basically means that instead of people getting back their share dividends they can reinvest it in the company, allowing the company to expand, become better and improve services. It is essential for Sainsbury’s to be a Plc or they would have problems with access to finance, if the company wasn’t a Plc they would have to provide capital from their own savings or they would have to take out a loan from a bank. Plc’s are able to raise finance much easier due to them being financially secured, because they can get capital through shares, bank loans or overdrafts. Large company’s such as Sainsbury will be able to borrow money more cheaply than smaller ones. Sainsbury’s is located in England, but it can also be found in other foreign countries, this means Sainsbury is located internationally. This will give Sainsbury a better trade pass, as they will be coming across many different people form different countries.
COMPARISON
Both of the businesses are Public Limited Companies but Richer Sounds aren’t on the stock exchange, this means they have no shareholders, but they have total control over the business. Sainsbury’s shares are sold at the stock exchange, this means that they have shareholders, who get dividends of Sainsbury’s profits, because Sainsbury’s have shareholders it increase the amount of expansions that could be done for the business, as their shareholders will be helping them to do this.
Sainsbury’s are located almost in every town, for now I’m going to use their Dalston store location, this store is inside the Dalston shopping centre, which means that there are lots of people around. They also have large amounts of parking space behind the shopping centre, which is convenient for customers that have a car. Richer sounds is located in the London city near the London bridge where there are lots of people and tourists walking around, this means the trade pass for Richer sounds is better than Sainsbury’s, but then gain Sainsbury’s is located internationally, whereas Richer Sounds is mainly based in the UK, which gives Sainsbury’s a better trade pass.
Richer Sounds ownership is suited to the business, because by being public limited company, which is unlisted from the stock exchange, means that they have total control over the business and if anything was to go wrong they won’t lose much, they would only lose the money that was invested into the business. Richer Sounds could also start operating in the secondary sector, if they started manufacturing their own goods, they could make more money out of this and customer awareness would increase for Richer Sounds.
RICHER SOUNDS FUNCTIONAL AREAS
As the organisation chart shows, at Richer Sounds there are a numerous number of functional areas, such as finance, colleague support, purchasing, warehousing and distribution, store operations, marketing, administration and IT support and customer services. Each functional area has its own officer or director who is in charge of the area.
The first department is the finance department. This is where income comes in and goes out from, such as staff wages and paying bills. This department is where payment is checked and recorded for tracing up outstanding debts and money that is coming in from sold goods. Financial documents such as invoices, statements and credit notes are also made in this department and sent from here as well. People in this department have to make sure that staff salaries are paid, to make sure that suppliers are paid promptly, pay other bills such as electricity, gas and phone bills, check financial documents continuously so that no errors are made and so that the business doesn’t end up losing money or customers. Every month and year they have to produce annual master budgets and weekly/monthly budget reports as well, they will produce updates of cash flow forecasts and annual financial documents such as the profit and loss account showing how much money they have made extra or how much they are in debt of and a balance sheet showing how much money they have left. Estimates for cost are decided here for new projects and ideas, and how to obtain additional capital for the business. In the finance department because most of the documents are stored on the computer, communication is easily done by sending an email to another department. IT is used in the finance department to analyse customer data, to design their store catalogues using special software’s, to produce documents quickly such as letters and to contact or send information to colleagues quickly using email.
The second department is colleague support; this is Richer Sound’s name for human resources. This department is where staff are recruited and trained. Their responsibilities are to read CVs and decided who is suitable to join Richer Sounds and who is not, they keep a record of staff information and a record of who is eligible for a promotion, promotions are decided and given from this department. It is the colleague support’s duty to deal with individual queries from colleagues such as career progression or changes in personal circumstances. They will deal with any personal issue such as arranging company loans or advances in times of financial problems for colleagues, they will arrange covers for staff who have taken time off, or for staff who are ill., contact leavers, this is normally done by phone to check why a colleague has decided to leave, and to see if the problem can be resolved. Colleague support will keep a record of any colleague grievances, and will be dealt with disciplinary actions, colleague support will send out written warnings to colleagues who have been disciplined or send letters confirming suspension.
The third department is the purchasing, warehousing and distribution, they are responsible for buying new stock for the business. Their responsibilities are to maintain good relations with all suppliers so that they don’t end up losing any of them, check delivery booking forms in case of a late delivery it’s their job to trace up and see what went wrong and the cause of the late delivery. Decide cost of selling goods, after checking competitor prices and to monitor stock levels, to adjust prices if not enough goods are being sold. The warehousing and distribution is where goods are stored and delivered from. Goods are stored on fast moving lines in front of the warehouse, this will reduce time for the warehouse colleagues. Goods are then delivered by two way drivers, who will deliver between the days of Tuesday and Friday, each of the stores has its own specific time and day for deliveries.
The forth department is the Marketing department, this is where marketing activities, designs and point of sale take place in. Their main activities are; Marketing is where they analyse feed back from customers and information about their competitors. This helps them to decide how and what to advertise. Design is another one of their activities, this is where advertisements, catalogues and sale materials are produced such as signs and leaflets. Point of sale (POS) is another activity, people working here are responsible for the way the store looks, it is their job to put in fittings, flooring and fixtures etc. The POS has to make sure that advertisements from the design are shown in all their stores.
The Firth department is administration and IT support. This department’s tasks are to file documents make sure that correct files are in their correct places, photocopy and document production. The IT supports main responsibilities are to make sure that the current systems are up to date and are working properly and to make sure that users know how to use it. Their other responsibility is to plan for future developments, keep in track of how the systems are changing, so that the company doesn’t end up with an out of date system.
The sixth department is the Customer Service department. They are responsible for queries and repairs that customers might have. Richer Sounds customer service has many features such as smart and friendly staff that are trained to solve problems quickly and efficiently. They have a national call centre where they deal with technical problems and general queries over the phone with customers. They have a repairs section for faulty goods, where a trained engineer carries out a repair for goods that aren’t working properly. Richer Sounds has different schemes such as a part exchange, where a person can come in and exchange one of their old goods for cash or another good and there is a free delivery scheme for disabled people, where the delivery is done free of charge by the store.
The Seventh Department is the store operations. They are responsible for setting budgets for each of the stores, they organise store visits, so that they can check on the stores to see how well they are doing, Decide how many people should be employed at each store and to check that all the stores meet their aims. All the stores have sales target. In each store, the managers must ensure that the cost of running that store is not too much. The running costs of each store are its overheads. Overheads include everything from the phone bills to the salaries to the cost of stationary. Each store is then ranked on how well it mages the business and how it contributes to the company. The use of IT in this department is that all their stores have the EPOS systems on the tills, which records all the items that are sold into the main computer. The system also allows them to maintain a customer database, so when a customer shops twice at the store they will know who they are and how to deal with them. The store operations team use email to contact colleagues in other departments of the company.
How some of these departments work together;
- The purchasing department works with the operations department for delivering the orders and the operations department checks the quantities and the products for the store to see if it is the right amount to what is ordered by the store
- Operations work with the marketing department for when they are design their store catalogues. Operations decide what should and should not be in the catalogue and then marketing publishes the catalogues.
- Marketing work with the purchasing department to find out if their local competitor has a cheaper price than them. Marketing will first find out the prices of their competitors and if any changes are required then it is passed on to the purchasing department to make these changes to the prices of their goods or services.
- All analysed questionnaires from marketing is sent to the purchasing department and if there is a customer who needs a product which is not available at the stores, then the purchasing department will sort this out by ordering the product that their customer wants.
- Purchasing work with the operations department when deciding the prices of their products. Purchasing will set the price and then operations decide if that price is reasonable for the products being sold. Purchasing also works with the marketing department when they want to see whether the price they decide on products is good value in the market or not.
How they achieve their aims and objectives;
- To continue on providing excellent services in all their stores to all their customers the operations team have used a scheme of not asking ‘how they can help’ but by offering a cup of tea, an ice- lolly when its hot and even an umbrella on rainy days.
- Surviving is an aim set by Richer Sounds, for this aim their departments help to survive by the purchasing asking the marketing for what products customers mainly ask for then they order the products that customers want and then they sell it with a good profit. Marketing helps to research the customer’s needs and wants continuously so that they can continue providing goods and services that customers want.
EXTERNAL & INTERNAL COMMUNICATION
Internal and external communication in Richer Sounds is done in many different ways. Internal communication, such as from one functional area to another is done by emailing information. They can exchange notes during meetings. Using fax machines also passes through documents. Other information is said through the telephone. Communications from directors or seniors are done through a telephone conference call, or information is sent through the fax machine. Employees communicate with the manager through a one to one, face-to-face conversation.
External communication such as communicating with the suppliers is done by email or a phone call; this speeds up the communication and prevents delays for deliveries. Communications with customers are done in many ways such as a face-to-face talk, when customers are in store. Communication is also done by given out questionnaires and people are able to write in as well.
SAINSBURYS FUNCTIONAL AREAS
Sainsbury is split into many different areas. Each area has its own structure and management. Each department has its own manager; they are responsible for their area of management. They can then feed back information from managers above themselves as well. This means people at the top of the chart get a better view of what is happening on the ground; therefore it gives them a better understanding of what their employees are doing.
The First department is the Human resources; their responsibilities are to select and recruitment employees, train and develop employees by teaching them new skills or more than one skill, so that they become multi-skilled and are more efficient when working. Training and development is also good because it cost less than selecting & recruiting employees and it prevents the company from recruiting someone with the skills required. This department is also responsible for the well being of their employees, they have to make sure that the staffs know all the safety regulations, so that accidents aren’t caused. This department helps Sainsbury’s meet its aims by improving the company performance and the customer service. This enables Sainsbury’s to meet its staff objectives and this increases the company’s performance through the staff and the well being of the staff.
The second department is the Marketing department. They are responsible for advertising for the business and market research. They have to make sure that they company has up to date goods, research on new goods so that the company don’t keep selling out of date goods. It is this department’s responsibility to keep a record of outgoing sales. They also organise sales promotions and competitions such as “buy 1 get 1 free” and they have their company logo printed on the side of all their vans, this increases the awareness of their company in the local area and it increases their market share because the company has increased the sales by methods of promotion. This allows Sainsbury’s to meet its objective to increase sales. By increasing sales, this usually leads to an increase in profits.
The Third department is the administration department. This department’s responsibilities are to make sure that paper works are filled in correct places, so that documents are easier to find when needed.
The Forth department is the Finance department. This department keeps a record of incoming and outgoing money from the business. It’s their job to check and pay outstanding debts, employee wages and suppliers. They will have to produce a cash flow chart every month and an annual one for every year. They also have to produce a profit and loss sheet, so that they know how much extra money they are making or how much they are losing. This department also ensures that the stores meet their targets. The targets include increasing profit and sales as well as providing enough profit to consider expansion within stores if required. By doing this the finance department helps Sainsbury’s to achieve its objective that is to increase profits by reducing the expenditure.
The Firth department is the Customer service. This department deals with customer queries and takes refunds from customers, providing the good purchased hasn’t been opened such as foods or whine bottles.
By splitting the company into many different sections, this way they can concentrate on the needs of their customers. If the company had only one big functional area it would be total chaos for them to control the business and their employees, because everyone will be everywhere and customers won’t know which service to go to.
EXTERNAL & INTERNAL COMMUNICATION
Internal communication is the communication that is used within the business, these are such as meetings. The internal types of communication used by Sainsbury’s are electronic email, enhanced telephone systems, the intranet, meetings and video conferencing. Electronic email is a good cheap way to communicate within the business from one employee to another. The disadvantage is that the recipient may not read it, if the email is prioritised incorrectly or it may be discarded as spam.
The enhanced telephone system directs calls to different areas of the business; the operator handles all the incoming calls and for a business like Sainsbury’s which is really big, a direct phone call from one office to another is very useful and efficient.
The intranet will feature any new information about the company, any changes or meetings dates, the intranet is only available to the staff of the company. Since Sainsbury’s is really big getting information to a large number of people can be done efficiently using the intranet.
Arranging meetings is probably the main communication which is used by all businesses, this is where bosses can sit down and talk with a large number of people at once, face to face. When meetings are arranged in Sainsbury’s staff are notified in advance, so that everyone attends and they attend on time, causing less hassle and problems to occur.
Video conferencing allows meetings to take place when people are in different rooms or different country. It sends a video of the person so that the person on the other end can see and hear the person making the call. Sainsbury’s is a big company and staff may not always have the time to attend meetings, but they can hear and see what’s going on through a video conference meeting.
External communication is used to talk to people outside the business. External communications used by Sainsbury’s are letters, telephone calls.
Letters are a really good way to communicate with customers, or with other staff within the company. Sainsbury’s use letters to let staff know about meeting dates in advance and to contact customers and to let them know about how Sainsbury’s is changing and improving.
A telephone call is a verbal communication, so you can only transfer speech, no writing. Sainsbury’s uses it to contact suppliers for late deliveries etc, and to contact staff who are absent from work without notice.
EXTERNAL INFLUENCES ON RICHER SOUNDS
The main external influences on Richer Sounds are actions made by competitors, the different changes in economic conditions and the environmental constrains. Richer Sounds review their competitors in three different ways.
Firstly each of the stores check their competitor’s prices in their area, then they fax the information to the purchasing department so they can make any changes that is required to the prices. The second way is they review advertisements on prices that advertised by the competitors and they check to see how they compare, to see whether they are selling goods for expensive prices or cheap prices. The third way is to send a mystery shopper to their competitor’s stores and to compare how their prices are different. If the competitors are selling the same goods but for a cheaper price then the mystery shopper will inform the purchasing department this news, so that they can also reduce the cost of their goods and match their competitor’s prices.
The economic changes that affect Richer Sounds are that the bank interest rates are always as low as possible for their overdrafts. Richer Sounds customers usually now have more money which means they spend more on essential products and less on anything else. If the interest rates of Richer Sounds are reduced then customers may be willing to spend more money to buy better quality goods and to buy these goods they may use their credit card, but then providing that the interest rates are reduced.
If there was an increase in the interest rates then Richer Sounds will have a lot of problems. They may need to sell more goods to cover their charges for overdrafts. Also they may need to increase the price of some goods, which will affect their customers because they would want to spend less on goods and at the same time have a quality product. If their interest rates increase then Richer Sounds may not be able to sell quality goods for cheap prices.
A change in prices can also affect Richer Sounds, because if their supplier raises the prices on the goods they sell to stores, Richer Sounds may have to shop around and find another supplier which offers better deals, or they will have to raise their prices on the goods they sell, which customers will not like. Fortunately because Richer Sounds have a purchasing department, they may have a list of more than one supplier contract, so if one of their suppliers did increase the price of goods, they would be able to cancel the contract and join a different supplier.
Richer Sounds are also affected by the changes in the exchange rates because they buy large amounts of products from abroad such as other European countries. The currency in Europe is Euro, therefore at the moment Richer Sounds have to pay less money in pounds, because pound is the strongest currency in the world. This means they can afford to reduce their prices in their stores for goods and services. If the pound currency was to fall and the currency for Euro was higher, then Richer Sounds would have to pay more money to their overseas suppliers as the prices of goods will increase.
Richer Sounds isn’t as well known as their competitors, in order for Richer Sounds to become more popular, they need to increase their customer awareness, by building more stores within the U.K and bigger ones, so that people don’t judge the store with it’s size to it’s quality of goods and prices.
The environmental constrains at Richer Sounds are to be fully aware that other people such as customers and staff can be affected by the amount of noise that the company produces or by the amount of pollution it produces. To prevent these from happening customers who wish to listen to music from the systems will have to go to a demonstration room, which has a fully sound proof so that other people aren’t disturbed. At Richer sounds warehouses electric fork lifts are used to prevent pollution and waste is kept to a minimum so items such as paper will be discarded of properly causing the less amount of pollution as possible and all electronics are checked by the end of the day to make sure that they are turned off, so that energy isn’t wasted.
Richer Sounds competitors are stores that sell similar or the same products as Richer Sounds, such as Dixons, Curry’s and Comet. The National competitors for Richer Sounds are mainly Dixons and Curry’s, because their stores are based all round U.K and also compete with Richer Sounds. Richer Sounds does not have as much stores around the U.K as Dixons and Curry’s and isn’t as popular as them either but it still says that it’s products are far more better and cheaper than other well known stores.
EXTERNAL INFLUENCES ON SAINSBURY’S
Sainsbury’s have many different external influences such as their competitor’s, which are Tesco their main competitor, Safeway, Asda and any other large supermarket. They have to make sure that their prices aren’t far more expensive than their competitor’s prices on goods and services and if it is they will have to make sure that the quality of the goods is worth the extra pay.
Sainsbury’s environmental constraints are to produce less waste and to recycle goods, because Sainsbury’s manufacture their own goods it is essential for them to take care of the environment around them. They have procedures for these, Sainsbury’s only waste products that are not fit for sale such as broken goods or food that is past its expiry date, this way they can keep waste level to a minimum so that they don’t receive any complaints from the people in the local area. They are also monitored by stock wise to produce as less waste as possible. Recyclable products such as plastic or cardboard will not be thrown away but recycled so that it could be used again. Sainsbury’s have been recycling since the 1980s. To make sure that the recycling scheme continues they set a target in each store to make sure that the company continues to recycle goods that could be used again. So it shows here that as well as Richer Sounds, Sainsbury’s also have really good ways to stop too much pollution from occurring.
CONCLUSION
In conclusion Sainsbury’s is a very large company who are in the market to make a profit and to please customers. Sainsbury’s is second in the market share; it is behind Tesco which is in the number one spot, Sainsbury’s are working very hard to increase their market share by becoming a very popular company in the UK where millions of people shop at every single day. One of the reasons people shop at Sainsbury is because one of its main objectives is to please the customer, by concentrating on the customer’s wants and needs so that people decide to come back to Sainsbury and spend their money.
Richer Sounds is a public limited company, unlisted from the stock exchange and they are smaller than Sainsbury’s, they have fewer stores in the UK than Sainsbury do. Richer Sounds operate in the tertiary sector which means they only sell products, because the products aren’t their own brand they have to give money to the manufacturers and the producers. Whereas Sainsbury operate in both secondary and tertiary sectors, which means they get more money than Richer Sounds from selling goods.
My view is that Sainsbury are bigger and better than Richer Sounds, one of the main reason is because they specialise in goods that people need in everyday life, whereas Richer Sounds sell goods that people will desire to buy but don’t really require it.