Business at work - Tesco

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Business at work


I have been given the task to find out how a business works and what its objectives are.

These are some of the things I aim to find out for my business

  • The objectives
  • The type of ownership
  • Its organizational structure
  • The management styles used by the company

Tesco was founded in 1924. The company has grown and continuously developed, responding to new opportunities and pioneering many innovations. Its now Britain’s leading food chain. It was founded by sir Jack Cowen, the brand name of Tesco first appeared on tea in 1920s the name was based on T. E. Stockwell that’s because of the first 3 letters of the name.  The first store was opened in burnt oak Edgeware.

Tesco is the leader in retailers with Sainsbury Plc second on the list. To insure that Tesco stay the leader they are investing 15 million for British growths so that they get better fresh produce. This is also to help them grow better fruit and vegetables during the seasons.

Tesco offer a number of services

  • Home shopping
  • Personal finance
  • Internet access

 Through all this they have a number of products that they sell.

Home shopping

Home shopping you can purchase a number of different products. Such as groceries and food all the general you can also purchase clothes and tapes music and you can even book flights to go and travel the world within the site. Whatever you purchase in the site you can

Personal finance

Personals finance this involves a full range of services such as

  • Loans
  • Credit cards
  • Savings
  • ISAs
  • Mortages
  • Life insurance
  • Motor insurance
  • Home insurance
  • Pet insurance
  • Travel insurance
  • Travel money

Tesco online

You can also get Internet access for 12.99 a month you can get unlimited access to Tesco Internet.

Charitable events 

Tesco charitable events that they take place in are race for life cancer research and they aim to make in excess of 17.5 million every participant must raise 50 pound for sponsorship and pay a 7.50 entry fee they also do a charity of the year where they decide a particular charity that they feel is suitable and worthy of. This year Tesco chose barnardos. Barnardo's is the UK’s largest childcare charity, working in communities with children in urgent need and helping them to rebuild their lives. Tesco's year long fundraising initiative is called the Building Blocks Appeal

Cultural change



Tesco is a public limited company. They offer shares for sale in the stock market and shareholders can help to appoint directors to control the management of the company. Shareholders have a limited liability and this means they wont make a loss on their shares if the company goes bankrupt.

The advantages

  • Shareholders get an advantage because of the limited liability this means that they will only lose the money they put into a business.

This advantage is an important one because, it is a good thing that shareholders would have limited liability because with limited liability the shareholder would only lose his/her investment that they have put in when buying the companies shares.

  • The sale of shares enables larger sums of money to be raised

This means that if the company wants to raise more money in order to invest in the company, they wouldn’t find it hard to do so simply because the company would have shares on the stock market which people would buy this means that the organisation would get the money that the public have invested in their company. With this money the organisation would be able to invest in the company if they wanted to.

  • It would become easier to raise finances, as financial institutions are more willing to lend to PLCs.

This means that once a company becomes a PLC financial institutions are willing to give money to them simple because they know that the company will be able to pay it back. They know this because the PLC would be able to raise the necessary funds from the selling of their shares.

  • Directors may be brought in as experts in certain fields

This means that directors that experts in the different areas of the company can be brought in to make sure of the smooth running of that different area. An example of a director in one area of Tesco would be Andrew Higginson finance director. His job would be to make sure that Tesco have enough money in order to function properly.

  • Production costs may be lower as firms may gain economies of scale

This means that that as Tesco is a PLC the cost of producing their own brand products will be cut because they will be able to put machinery which means that less manual labour will be needed and productivity will be more.


  • The setting up costs can be very expense – running into millions

This means that in order to become a PLC people would have to consider all the things that would cost money when starting up. Some of these would be the company would need lawyers to make sure that the companies prospectus is all legally correct, also the company may have to use financial institutions to process their share application, the company would have advertising and administration expenses and finally the company would need to have at least fifty thousand pound in share capital. So as you can see that all of these things would cost money and in some cases it would go up to the millions.

  • Since anyone can buy their shares, it is possible for an outside interest to take control of the company.

This means that because there isn’t one owner of a PLC anyone from the outside can come and take over the company by buying a lot of shares in the company. In other words someone from the outside becomes the majority shareholder in the company. With buying all these shares he/she would have the power to take control of the company without anyone saying anything.

  • Members of the public can inspect all the company’s accounts.

This means that anyone can ask Tesco for their accounts, this could be a member of the competition which means that they can use these figures and improve their company buy it. Also the financial status of Tesco or any PLC would be a public thing so everyone would know where the company’s money is going, and if they aren’t using the money wisely then the public would be able to find out and the reputation of the company would go down.

  • Because of the size of the company they are not able to deal with their customers at a personal level.

This means that as the company is so big they aren’t able to deal with every customer at a one to one level, which means that the company would lose customers because the customers may think that this company is being rude. So they will lose business and respect from their loyal customers.

  • There are a number of legal requirements to fulfil in setting up a company.

This means that in order to become a PLC the company would have to go through a lot of legal requirements, which would take time. Some of these legal requirements would be a Statutory Declaration, Memorandum of Association and an Article of Association must be provided. All this processes would be time consuming.

As you can see that there are a lot of advantages and disadvantages in starting up a PLC, but on the other hand being a PLC has a lot of benefits such as jobs and promotional benefits.

To be a limited company you have to have a certain level of capital. If you are a small business you wont be able to become a limited company. Tesco is a very large company with a number of branches around the country.  They have 150,000 thousand people employed and server almost 20 million customers a week.

The objectives of the business 

Tescos objectives are to stay the leader in the retail industry and make sure that they provide good quality products at a price that is reasonable and cheaper then there competitors.

An objective is goals that a business sets themselves in order to do well as a business. All organisations set themselves objectives, which they aim to achieve. All businesses set themselves objectives that will affect the way the business operates. The objectives that the organisation sets all come from the company mission. A company mission statement is a written document that sets out the organisations purpose. The objectives come from the mission statement because this statement outlines what the company wants from its employees and what they want to achieve within a certain period of time. So by going with the mission statement they are able to pick out the objectives, which will affect the company, the most in a good way.

There are two types of objectives that an organisation would set themselves. The first being long-term objectives that cover a three to five year period, these objectives specify the organisations primary or main aims for example to increase profits by 10%. The second type of objective being a short-term objective that usually covers a one-year period, and these are used to support the long-term objectives. An example of a short-term objective would be to increase profits in the northwest by 15%. Objectives can change over time depending on conditions in the external environment and on internal policies.

In order for the objectives of the organisation to be effective, they would need to be SMART. Every business when setting their objectives would need to use the SMART method. SMART which stands for:

  • Specific – this means it should be for a particular product in a particular area.
  • Measurable – this means that it should be able to be measured, by a figure of some sort for example percentage sales.
  • Attainable – this means that the company should be able to achieve the objective
  • Relevant or Realistic – this means that it should be an objective that isn’t too adventurous, but should be able to be met.
  • Time constrained – this means that this objective should be able to be met in a certain period of time.

This method helps the organisation set out objectives that are to the point and specify everything that the organisation needs to get the best results.

From all the information that has been given above, I would say that Tesco set objectives that would benefit them as well as the customers. Also Tesco set themselves both short and long run objectives so that they are able to work towards those objectives as quickly as possible. As Tesco’s objectives are mainly concentrated on their customers, they use what is called a Customer Plan. They receive this plan via the Tesco agenda each year. In the customer plan it has different projects that come under two headings, the first being Fix projects which concentrates on areas that need to be improved on. The second heading is Innovate projects, which look at areas whereby they can differentiate themselves to give a change in the shopping experience. The objectives that Tesco set themselves this year I will point out and explain, so that you as a reader understand the objectives better. The objectives that Tesco have set themselves come under a range of categories; they have done it this way so that they get their objectives in every area. This at the end will benefit them by more customers coming to shop at their stores because they will be responding to customer needs and expectations. These below are the objectives that they have set themselves this year:

The first objective is

  • To maximise sales, and to increase profits.

This means that Tesco would make sure that sales are always healthy, and as a result of this profits will rapidly increase because of the amount of sales that has been made.


  • Continue to get cheaper for customers both through prices and great value promotions

This objective means that Tesco want to make sure that their customers get the products that they want at the cheaper prices that they have. Also they want customers to be able to buy more products by putting more promotions such as buy one get one free.


  • To improve customer emotional loyalty and drive competitor differentiation
  • To improve customer satisfaction with service and availability at an individual store level, driven by appropriate customer and internal measures

This means that Tesco want to be the UK’s number 1 retail supermarket, so in order for that to happen they are going to make sure that the goods availability is always high so that customers get the products that they want. Also they want to make sure that there are no queues, and if queues do build up they open up a till to shorten them. Finally they will give all their customers a good standard of basic services and facilities such as toilets, ATM machines etc.

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  • To understand your clientele ie dislikes and problems in these stores and fix them
  • To make the environment of these stores more attractive to customers
  • To add something extra to each store without compromising the customer.

This means that Tesco will redecorate their stores so that it attracts more customers. They want to give customers more space in order to shop and make sure that they give their customers the best facilities such as toilets as they can.


  • Over the next year we will make ...

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