Business Activity & PLC

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Business Activity

Tesco specialises in food and drink as their core product and this helps them to concentrate in one major area. This also helps them purchase a large number of products in bulk and therefore gain huge discounts as they are benefiting from economies of scale.

        

Tesco sells other types of products apart from breakfast cereals, toiletries and snacks. They do this because over the years they have realised that their customers want to do all their shopping under 1 roof rather than in 10 different shops. A few years ago Tesco decided to start selling other type of goods like foreign food, halal food, low G.I, organic and low fat food. Selling different types of products will benefit customers because they will be getting what they have in their normal diet but at cheaper prices. This shows that Tesco responds to the latest trends in the U.K., and thus satisfies everyone.

The reason Tesco sells their products so cheap is because they buy them in bulk and gain low prices. Also selling products at low prices helps to gain customer loyalty which has helped the store a great deal, and helped them to gain huge profits.  

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Tesco’s main income is through food and drink but they sell other products as well. This diversification has helped the firm to raise £280 billion. Some of the items that are sold are clothes, household goods and electronics etc.

Tesco aim their products at different types of people e.g. Family pack of tomatoes at families and value tins of tomatoes at people on a low income. This makes everyone happy because they are all saving money and have the benefit of a club card and the privilege of online shopping. Tesco is saving money because they buy in bulk ...

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The report states the business 'Tesco', however there haven't included an image, to allow the examiner to visualize the report/brand. The report states a number of technical terms such as 'economies of scale', however there haven't explained this within the report. All technical terms should be explained, to allow the examiner to understand. On the flip side, the report states 'PLC', and has explained this with detail.

The report states that Tesco is able to purchase in 'bulk', however this isn't explained how Tesco can do this. The report could include 'Tesco is able to purchase in bulk, as there have a large purchasing power. This is due to the amount of units / products there are able to buy, and this allows Tesco to negotiate with price if the order is large.' The report states that Tesco is able to sell other products that are non-food. Although the report fails to understand the reason for this. Tesco are able to undertake this, as consumer trust their brand.

In summary, the report is quite good. The report states how Tesco sells a number of their products to consumers. In addition, the student describes what a PLC is with a little information regrading the process. However some area's are not justified along with areas which show a lack of understanding. The report states that Tesco has 'huge profits', although how much did Tesco make within the last financial year? This information could be found on their website, and could be included within the report. The report states the term 'PLC', and explains this quite well. However the student has stated the number of shares in issue with regards to Tesco, and how much 1 share sells for. This would show a clear link between from an academic view point towards a commercial environment. I believe that the student hasn't fully understood one aspect of the report. The report states 'The disadvantages include the fact that the minimum share capital is £50 000, so it is not really that easy to buy a share in Tesco'. However this is in-correct, the business needs a minmum of £50,000 in cash to be able to list on the stock exchange. The shareholder can purchase only one share which may be as little as £0.01. The student has got a little confused here, which shows poor understanding.