Disadvantages
An unwanted takeover can take place if share prices have fallen and there are difficulties within the company.
The business can be remote from customers. This may be because there is a large amount of shareholders that want different things. It is possibly that some shareholders want quick results so that their share value increases. The directors of the firm might acknowledge what shareholders want, rather than what the customers want.
A public limited company can have the disadvantage of diseconomies of scale meaning that average costs increase with the scale of production. This is due to variable costs that rise more as the scale increases and fixed costs that are not significant.
Co-operative
A co-operative type of firm has two or more owners and a committee has the main control of running the firm. An example of a Co-operative firm is the supermarket chain, The Co-op.
Advantages
A main advantage of a Co-operative firm is that they try to run on democratic principles. This is an advantage because the members have a say in how things are organised giving them an active role in the firm.
Another advantage is that there are returned profits to customers.
Disadvantages
The main disadvantage is that the committee who have control of the firm may lack business experience. This can create problems with running the firm successfully.
Public-sector firms
The government controls public-sector firms. It consists of government in London, various local councils and firms such as the Post Office, a nationalised industry, which is all owned by the government. Public-sector firms are usually aiming to produce a service to the public.
Public Corporations
The government owns public corporations and the control of the firm is with chairman/chairmen who are selected by the government. Public corporations tend to be very large and the capital of the firm is raised by issuing stocks. Profits of the firm go to the government and the man aim of a public corporation is to serve the public. An example of a public corporation is the Royal Mail Group that runs the post offices and the Royal Mail.
Privatisation
Privatisation is the term used when a firm from the public sector is transferred to the private sector. During the Thatcher administration, public sector firms like British Telecom were sold to the private sector.
Arguments for Privatisation
Firms will operate more efficiently in the public sector because they are trying to maximise profit.
Money can be raised to increase government services or to pay for tax cuts.
The public become shareholders and take a greater interest in the economic matters.
When a privatisation occurs, it can create competition and this should help reduce prices.
Arguments Against Privatisation
Public monopolies simply become private monopolies meaning that it is difficult for similar companies to be established.
Services from the firms are socially necessary but unprofitable services may not now be provided.
The public because of taxes paid already owns nationalised industries indirectly.
After privatisation, people may lose their jobs, as the firm has to become more efficient.
Multinationals
A multinational corporation is a very large firm with a head office in one country and several branches operating overseas. Motorola is an example of a multinational firm.
Advantages
Create jobs for the host country and can generate new jobs in the areas that need them.
They are widespread market opportunities.
The multinational firm will introduce new production techniques and managerial skills.
New or better goods may now become available in the host country.
Helps spread new technology worldwide.
Disadvantages
Profits are returned to the overseas head office.
Workers in other countries argue that building a branch operating overseas is taking away jobs in their country.
The multinational may operate against the interest and values of the host country.
The multinational may force its overseas branches to buy supplies from the head office.
The firm my exploit the host country by paying low wages to workers, inferring with local businesses or destroying scare natural resources.
Findings
Task 1
Table of Sainsbury’s and citizens Advice activities.
Provides community leadership
Removing barriers to employment
Improve people’s ability to cope
Promote equality and discrimination
Help deal with illness and disability
Helps to resolve client problems of social security
Helps to resolve clients problems of debt
Helps to resolve clients problems of employment
Helps to resolve clients problems of housing
Helps to resolve clients problems of the legal system
Helps to resolve clients problems of immigration and asylum
Sainsbury
A wide range of food and drink produce is available for retail customers.
Sainsbury’s is one of the food retail stores in the country, consisting of Sainsbury’s Supermarkets and convenience stores called Sainsbury’s Local. Founded in 1869, Sainsbury’s main role is to offer a range of food and drink produce to retail customers and at the present, the company offer 30,000 food products. This shows that Sainsbury have objectives of:
Profit
brand recognition
Customer satisfaction
Ranges of non-food products are available for retail customers.
As well as offering food and grocery products, Sainsbury’s have taken the option of supplying a range of non-food products. These non-food products include ranges such as home ware, health care, clothes, entertainment and electrical. In the entertainment range, over 250,000 books, CD’s, DVD’s and computer games are available.
Campaign of ‘Try Something New Today’
The campaign of ‘Try Something New Today’ is to try to encourage people to try new products that they would not or have not tried before and is the marketing campaign in support of Making Sainsbury’s Great Again. The aim is ‘to inspire customers to think beyond their normal range of products.’(Page 18) and to develop changes to what customers purchase. The ‘Try Something New Today’ also tries to persuade customers to experience different recipes. Sainsbury’s have produced recipe cards of recipes to try to promote this new, different and unique way of cooking. The campaign is endorsed by celebrity cook Jamie Oliver, who features in the Sainsbury’s television adverts to try to appeal to a vast range of audiences of the ‘Try Something New Today’ campaign. This shows us that Sainsbury have objectives of:
Social issues - helping the community and customers to have a healthy and unique diet.
In addition, it shows that Sainsbury are trying campaigns to provoke profit. If customers are buying new things to try, this could lead to an increase in profit.
Citizen’s Advice Bureau
Dealing with social security problems.
Dealing with social security problems includes a vast range of topics. These topics include disability benefit, income support, housing benefits, sickness benefits, council tax benefits, job seekers allowance, working families’ tax credit and others. The Citizens Advice Bureau (CAB) advises on more than 1.5 million client problems each year on welfare benefit, tax credit and financial support matters. The types of problems include people not receiving their benefits, or the benefits have been reduced or cancelled. The role of the CAB is they try to deal with the benefit problems that the client has, for example, getting in contact with the benefit committee to see if the reductions or cancellations of benefits are correct, and to ask why a client has not been receiving their payment. If the client has had they benefits reduced or even cancelled, the CAB try to help that person in a number of ways; this can include helping the client into paid employment, which the CAB synergies with the Jobcentre to do so. This shows that Citizen’s Advice service has objectives of:
Social issues, as they are trying to help people with their problems.
Customer satisfaction. If someone has a social security problem, but there is no one else to talk to, then the Citizen’s Advice service is a place
Dealing with Housing Problems.
The CAB deal with clients who claim to have housing problems. This can include topics such as housing debt, homelessness threat, environment and neighbour problems, housing costs, housing conditions, security of tenure and actual homelessness, as well as others. A type of problem is a person facing or being threatened with homelessness. This may be due to a persons housing benefit not administrated properly, therefore the person does not receive it. In this case, the CAB works with Camden Housing Benefit Service to ensure that other Citizens Advice Buenos, local authorises make sure that the services to claimants of housing benefits are improved. This shows that the Citizen’s advice service have objectives of:
Social issues, trying to help people with their housing problems
Customer satisfaction, trying to solve their housing problems, therefore achieving customer satisfaction
Provide training and active citizenship
The CAB provides training, not only for the staff but also for the clients that come to the service. This training could be getting the clients to go to formal education so they can read or write, or could be to get the client to go counselling to get anger issues sorted. Within training the staff, the staff can be trained to ensure that they do their job properly and it is up to a high-class standard. This shows us that the CAB has objectives of:
Social issues, as they are helping clients with essentials skills.
Personal satisfaction, as they are helping staff with essentials skills needed with the job, therefore the staff will feel happier if they know what they are doing
Long Term Survival, staff has to undergo training to ensure that their skills in their role are up to date, if not; this could effect the long-term survival of the service.
Main Purposes
‘The Citizens Advice service helps people resolve their legal, money and other problems by providing free information and advice from nearly 3,400 locations, and by influencing policymakers.’
Source: Citizens Advice Web site
It is clear that Sainsbury and Citizen’s advice are two different companies which two different purposes. It is apparent that Sainsbury main purpose is to make profit because most of the things they do are to promote people to spend money. In contrast, the Citizens advice service main purpose is to produce a service, to help resolve people problems that they encounter with providing free information and advice. The main purpose of both companies could be explained by what type of business they are, Sainsbury is a public limited company that tries to achieve profit, while the cab is a public sector company, therefore its aim is to provide a service. Even though both companies have different purpose, there are some similar between the two companies. Sainsbury, even though the main purpose is profit, do have some objectives regarding social issues, even though not in too much depth like the CAB. Another similarity is there are both trying to achieve customer satisfaction. Customer satisfaction is a vital objective for both of the companies to succeed their own purposes.
"Our mission is to be the consumer's first choice for food, delivering products of outstanding quality and great service at a competitive cost through working 'faster, simpler and together."
Source: Sainsbury Web site
Task 2
Citizens Advice
‘The objects of Citizens Advice are to promote any charitable purpose for the advancement of education, the protection and preservation of health, and the relief of poverty, sickness and distress. In carrying out these objects, and in all aspects of its work, Citizens Advice is committed to promoting equality and diversity, preventing prejudice and discrimination, ensuring equal access to advice and promoting good relations between all sections of the community.’
Citizens Advice overall aims are:
To ensure that individuals do not suffer through lack of knowledge of their rights and responsibilities or of the services available to them, or through an inability to express their needs effectively and equally.
To exercise a responsible influence on the development of social policies and services both locally and nationally.
The company intends to achieve these aims by:
Making their services more accessible
Provide a quality service
Represent their clients’ interests
Raise their profile
Obtain the human and financial resources they need to achieve these goals.
In May 2004, the Citizens Advice service strategic plan for 2004/08 was launched giving other objectives to achieve their overall aims.
These objectives are to:
meet the needs of as many people as possible
have a greater influence on policy development
be innovative and develop new services
improve funding for both bureaux and Citizens Advice
Develop all of the staff and volunteers that make up the Citizens Advice service.
Making services more accessible.
To achieve this, the Citizen Advice service has set out aims to develop different range of methods to increase access and to strengthen access to advice with the means they already have including telephone and their website.
What they do to make services more accessible:
Exploring and assessing effectiveness of different potential methods to increase access to advice including email services, and information kiosk services.
Trying to increase the availability of consultancy by telephone.
Trying to achieve 2 million visits to Adviceguide website.
Making services more accessible links in with what the company’s main purpose because the more accessible the service more people will be advised, therefore more people’s problems like housing, employment etc. can be resolved and quicker.
Providing a quality service.
To achieve this, the Citizen Advice service has set out an aim for the CASE, the national case recording database that connects each member bureau to a central database, to provide improved management information on problems. CASE will also help bureaus to manage their case workloads, analyse problem statistics and provide valuable data for local authorities to help plan improvements for the future. This will provide staff with information more efficiently.
What they do to provide a quality service
The latest version of CASE to be set up in all bureaus.
Providing a quality service links with the objective in the strategic plan to develop all of the staff and volunteers that make up the citizens advice service. An aim of providing training for all roles covering general advisers, specialist advisers and management options has been set up to achieve this.
What they are doing to develop staff and volunteers:
Scheduling 1,791 training events
Developing a service to allow bureaus to book training directly via the intranet.
Representing clients’ interests
To achieve this, the Citizen Advice service has to understand what clients’ options are and services can be made better. To know what clients options are of, the Citizen’s Advice must provide information for them to get in contact. They can get in contact in a number of ways:
Telephone
Email
Letter
Face to face
To ensure that clients interests are being represented, they try to improve what clients think need work on. For example in 2004/05 there was an aim to Provide advisers with information more efficiently by moving to an online delivery of electronic information for advisers (AdviserNet).They also develop staff and volunteers to ensure that they services are up to date and a high standard so that there is client satisfaction.
Obtain the human and financial resources
This links in with the objective from the strategic plain to improve funding for both bureaux and Citizens Advice. To achieve both of these objectives the Citizen Advice service must make sure there is enough staff in the service. At the present, they have 27,621 people that contribute to the Citizens Advice service nationally. With 5,259,000 problems, these staff is vital for the success of the service and need to keep existing staff, as well getting new staff. For existing staff, training is available to allow the staff to perform at their best.
Through the a grant from the Department of Trade and Industry (DTI), and donations from charitable trusts, companies and direct contracts with statutory bodies, the grant income for 2004/05 was £33,165,000. Citizens Advice awarded £4,737,000 in grants to bureaux during 2004/05. To promote more funding into local bureaus, Citizen’s Advice are planning to:
Implement a local authority funding strategy for bureaus
Obtain and maintain partnerships, particularly with local authorities, for manager or deputy manager salaries, clerical, administrative, training or specialist posts
To obtain grants to assist the development of premises improvements, particularly for disabled people
Raise funds £1,742,000 for strategic projects
Sainsbury
‘Our objective is simple; to serve customers well and thereby provide shareholders with good, sustainable financial returns. We aim to ensure all colleagues have opportunities to develop their abilities and are rewarded for their contribution to the success of the business. Our policy is to work with all of our suppliers fairly, recognising the mutual benefit of satisfying customers' needs. We also aim to fulfil our responsibilities to the communities and environments in which we operate.’
This shows that Sainsbury have aims to:
To ensure there is customer satisfaction, serve them well and to satisfy their needs
Provide shareholders with good returns
To ensure there is staff satisfaction
To fulfil responsibilities to communities
To fulfil responsibilities to the environment
Customer satisfaction
To achieve this aim, Sainsbury listen to what their customers want and if they have any problems. They listen to customers’ options by making sure customers know that they can get in contact. Sainsbury have a helpline for queries and in-store customer/help desks for them to express their views if needed. As well as listening to customers views to achieve customer satisfaction, they try to create an attractive and friendly shopping environment. They do this my ensuring staff are willing to help but also they ensure that the store it self is planned out well for shoppers confidence.
They try to keep queues to a minimal by opening up tills and providing ‘ten items or less’ tills for a speedy service.
Providing shareholders with good financial returns
To achieve this aim, Sainsbury focus on the customers’ needs. They do this to promote financial growth, as customers will spend more money if they are satisfied. Sainsbury stock a range of items available, including non-food items to promote finical growth. More money means more finical returns to the shareholders.
Sainsbury have a financial aim to generate £1.4 billion extra sales from core grocery products, with this aim, shareholders will have better financial returns.
Sainsbury has target is to generate £700 million of additional sales from non-food products.
Staff satisfaction
Sainsbury’s employs almost 153,000 people in stores, depots and offices around the country and a key aim is staff satisfaction because without staff satisfaction Sainsbury cannot run probably as unhappy staff will effect customer satisfaction, resulting in a lose of money, therefore less finical return to the business and shareholders. To achieve staff satisfaction, the company makes sure that is a good, suitable working environment. They listen to colleagues options and try to fix any problems that one might have. Making sure the staff has a suitable wage that corresponds with their job role. Sainsbury are also committed to staff training and development.
In autumn 2005, every store colleague received new customer service training.
At present they are delivering that training to a further 9,000 managers which helps the manage to understand new ways to lead the business,
Fulfilling responsibilities to communities.
‘We invested a total of £18.6m in community initiatives in 2005/06, an increase of 170% on last year.’
Source: Sainsbury Web site
Sainsbury want to make a positive difference to the community. To make this difference they have invested, developed and worked with:
‘Active Kids’ programme
The active kids programme is a nationwide scheme to help schoolchildren to take more exercise and to eat healthy. In 2005, they donated £17m of activity and sports equipment to schools across the UK, an average of £700 per school for this programme.
Youth Sports Trust programme
In 2005, Sainsbury invested £500,000 in the Trust to help train teachers in activity and sports skills. With this training, teachers can encourage schoolchildren to take part in exercise which is the aim of the ‘Active Kids’ programme.
‘Taste of success’ programme
They funded more than £100,000 in ‘Taste of success’ programme. This aims to help children learn about food and nutrition. The programme tries to promote healthy eating.
‘Local Heroes’ awards
In 2005/06 Sainsbury donated £250,000 through ‘Local Heroes’ awards which recognise and encourage the many colleagues in all jobs roles who donate their time and effort to a range of good causes outside Sainsbury work.
Supporting charities
In 2005/06 Sainsbury raised more than £3.2m for charities such are:
Home-Start
Comic Relief’s Red Nose Day
Sport Relief
Salvation Army
FareShare
Food for All
To promote helping the community further, Sainsbury have an aim to link all supermarket with a charity.
Fulfilling responsibilities to environment
Sainsbury want to make a positive difference to the environment. To make this difference they have invested, developed and worked with local communities
To our search for new stores and they want to make sure that their
Stores complement the local environment. They do this by:
Try to build on a brown site rather than a green site that would damage and hurt the environment more.
Invest in improving impacts such as emissions and energy use.
Healthy, safe, fresh and tasty food.
‘At Sainsbury's we will deliver an ever improving quality shopping experience for our customers with great product at fair prices. We aim to exceed customer expectations for healthy, safe, fresh and tasty food making their lives easier everyday.’
To achieve the aim of healthy, safe, fresh and tasty food, Sainsbury has:
Sainsbury have developed the ‘Try something New Today’ campaign that is to try to encourage people to try new products.
Sainsbury have developed the ‘Be Good to Yourself’ food range that provides customers with low fat diet products as well as healthier options.
Sainsbury have developed ‘Plus Meals’ with added ingredients such as prebiotics, probiotics and Omega 3.
‘Sainsbury’s SO organic’ brand, full range of over 700 Sainsbury’s and branded organic products
Guideline Daily Amounts (GDAs) on kids range packaging.
Traffic light system called the ‘Wheel of Health’. The ‘Wheel of Health’ is now on over 1,300 of our products
Task 3
Citizens Advice
The CAB is still working towards their aims and objectives but has effectively achieved part or all of some:
Making the services more accessible
There was a target to increase the availability of telephone consultancy to bureaux. Money advice and welfare benefits advice increased from three to 5 days a week, as well as employment and consumer rights advice increased from 3 to 4 days a week. This is a great achievement.
One aim was to achieve 2 million public visits to the Advisernet website. They already achieved this with 2.36 million visits.
Another target was to work on new initiatives to improve access. An achievement of the citizens advice is that they have worked with local bureaus to develop new access possibilities such as information kiosks and a pilot e-mail service has been began.
To provide quality service
There was a target for the latest version of CASE to be set up in all bureaux that requested it. The Citizens Advice has achieved 98% of member bureaux having the latest CASE.
One aim was to schedule 1,791 training events. They have exceeded this and have scheduled 2,234 training events.
Another aim was to develop on-line training course booking facility for bureaux. 36% of bookings are now made on-line.
Obtain the human and financial resources
There was a target of implementing a local authority funding strategy for bureaus through workshops. The first year of this programme focused on developing materials, running training workshops and providing guidance to bureaus.
Another target was to raise funds £1,742,000 for strategic projects. A total of £1,598,695 during the year and a further £273,711 was received. The total exceeded they target.
Overall, I think that it is apparent that the Citizens Advice service has effectively been achieving set objectives and targets that mean that the company can progress and help individuals who have problems and a lack of knowledge that is the main purpose of the Citizens Advice Bureaus.
To help them achieve more of their objectives and targets, they should:
Focus on the objectives and targets that have not been achieved, and then develop more ways in which they can achieve them.
Further more, I think to achieve their main aims, they should:
Continue with training so that the advisers are up to date with techniques to advise clients about they problems
Sainsbury
Sainsbury are still working towards their aims and objectives but have effectively achieved part or all of some
During 2006:
Sainsbury are now serving 16 million customers each week this is 1.5 million more than last year. This shows that Sainsbury are improving and that the objective of customer satisfaction is being achieved especially if customers return to shop there.
Sainsbury research shows a marked improvement in customer satisfaction. This shows that Sainsbury are achieving their objective of customer satisfaction.
They have increased sales (Inc VAT) by 5.8 per cent to £17,317 million and increased like-for-like sales by 3.7 per cent and increased market share. This shows that Sainsbury are achieving they are achieving they aim of providing shareholders with good financial returns and to make profit.
Customers are now giving their highest rating for healthy, fresh and tasty food. This shows that Sainsbury are achieving the aim are great produce.
They invested £2 million to produce bread with higher fibre and 15 per cent less salt making bread healthier for the customer. This shows that Sainsbury are achieving the aim of healthy, safe, fresh and tasty food.
Around 95 per cent of their customers are aware of the communities’ schemes and believe it is providing a valuable contribution for the local community. This shows that their objectives to fulfil responsibilities to communities are being noticed.
‘Our advertising, featuring Jamie Oliver, has publicised the campaign to an even wider audience, and sales of whole nutmeg increased from 1,400 jars to 6,000 a week after Jamie used it as seasoning for pasta’
Source: Sainsbury’s web site
This shows that they marketing campaign of ‘Try Something New Today’ is working and reaching customers.
Customers brought 120,000 of our ‘Bag for Life’ each week, saving an estimated 50 million standard bags a year. This shows that Sainsbury are achieving their objective of fulfilling responsibilities to environment.
Overall, I think that it is evident that Sainsbury have effectively been achieving set objectives and targets that means that the company can progress and growth and therefore make profit that is the main purpose of Sainsbury.
I think to carry on achieve their main aims and their main purpose, they should:
Carry on focusing on the customer satisfaction as happy customers will continue to shop at Sainsbury, therefore more profit
Keep providing customers with choice of products, this will provoke customer satisfaction
Louise Allsop Introduction to Business Unit 1 63205
