Aims & Objectives: Theme A
In this report I will define what is meant by aims and objectives. I will also
relate this to the businesses I am studying which are Tesco and Chester Zoo.
An aim is a list of things that a business wants to achieve e.g. making profit, being environmentally friendly. An objective is the targets that a business sets itself to check it is going to achieve its aims. At the end of secondary school I want to leave with at least 5 A*-C grades including Maths, English and science. This is an Aim. In order to achieve this aim I am going to try hard and complete all homework given to me, and also come to school all of the time, these are my objectives.
All businesses have similar Aims and Objectives. Example:
Survival is continuing to be in business, even cope in hard times like when the recession takes place. All businesses need to survive first, in order to make profits. Tesco not only specializes in food it also specializes in different areas like clothes, entertainment and insurance etc. So if a customer stops buying food from Tesco it will still be able to make profits by selling clothes.
Profit is probably the most common and the most important objective. Tesco cannot survive for long unless it covers all of its costs. Tesco can only make profit if they sell its products or services for more than the price they got it from.
Growth means to expand the business. Growth occurs when a business e.g. Tesco becomes bigger. ‘Bigger’ may mean several things such as a larger share, a greater amount of capital employed, more employees and a greater turnover and profits before tax.
Prestige means to have a reputation and having a good impression. Tesco will want to have the prestige of becoming the market leader in their field of business.
Survival: Tesco has survived since 1919; this means that they have already achieved this aim. It was established as a single store and is now that UK’s leading supermarket chain. It has competed for supermarkets and taken them over (bought them out) such as Aldi, Netto and Sainsbury’s and other so called major superstores. Another objective to gain more customers is to have promotions and special offers which are cheaper than the competition. Tesco can examine the competitors that it has; they can do this by using market research, they can do market research by doing surveys and questionnaires. They do this because Tesco wants to know if everything they are doing is correct for example they might want to know from the public if they are helping the customers enough, they need to know this because if they didn’t care about them, Tesco’s customers might go to Asda for example, Tesco don’t want this so they need to ensure that everything about them is perfect, this helps them to survive.
Although the survival of Tesco in the UK is not in question because they make the most profit compared to the other leading supermarket and also they make a huge £120,000 profit everyday according to the BBC website, may not happen in the new markets it has entered, particularly the US, which is often a difficult and competitive environment for UK businesses. Also for Tesco to survive they will need to monitor their main competitors Asda, Morrisons and Sainsbury's to see if they are selling their products at the best price. They will also need to investigate new products and services that keep customers coming back. They need to make sure that they don’t over expand and ensure that they have products and services that sell in good economic times and in recessions.
Tesco has also diversified into a range of store size, competing also in city and town centres through Tesco Metro and Express. This means that it is now managing to compete with smaller ‘corner shops’ and sole traders as well as the larger supermarket chains. Tesco always have adverts on the TV to show that sales are going on. Sometimes in the adverts they compare prices of food and clothes. E.g. Tesco milk is £0.95, and Asda milk is £1.15 by doing this Tesco will appeal to new customers, because for example the recession has taken place, people will want to buy food at the best possible price. This will help Tesco to survive because if more and more people come to Tesco and shop they will mean more money.
Profit: Tesco has made a huge amount of profit but they are always looking about ways to increase that, to gain more profit Tesco has to reduce its cost and also increase its revenue. For higher revenue Tesco can purchase their stock from a different supplier for less and to increase the profit Tesco can also put on higher prices on each item.
Tesco has also given a range of products e.g. Tesco Finest, for people who are high class. Tesco Brand, are mid range products and last but not least Tesco Value, these are products which minimize Tesco cost’s by having cheap packaging. Tesco will promote financial services products, such as loans, savings accounts and insurance, more heavily in its stores as well as selling more business online.
They can also have special offers in newspapers, and they can hire more employees on a minimum wage. Tesco can gain even more profit by obtaining cheaper packaging from different companies. As Tesco has survived the world of business and is busy it should take into service other shipping companies so that there stock can arrive to stores at a faster pace.
Also for Tesco to reduce costs they will change their suppliers constantly this is because they will want to buy the lowest and best priced products from their suppliers and sell it from a more higher price to their customers to make a profit. Also they will regularly review the number of staffs and to reduce costs Tesco will buy products from abroad.
The above table shows profits over time at Tesco from 2002 to 2006. There has been a 47% increase in operating profit from 2002 to 2006. Tesco is therefore already successful in managing to increase profits. Tesco lower costs on products by having huge sales, ‘but one get one free’ and discounts.
Tesco lower costs regularly in their stores to catch the attention of new customers, for instance they always have discounts, special offers and ‘buy one get one free’ etc. They have offers on because this will appeal to the general public. These days the recession has taken place, and most people will want to pay the lowest price possible for certain products. If Tesco have special offers going on a regular basis they will have more and more customers coming in which will lead to a fine profit (revenue). This will definitely help Tesco a lot for them to survive in the coming years, this is because if they make enough money to pay wages to the staff, pay the store expenses etc they will never go bankrupt or go into administration.