The two businesses that I have decided to investigate are Sealy Beds and Asda.
The two businesses that I have decided to investigate are Sealy Beds and Asda.
I have chosen these two businesses because they are local and easily accessible, in the past either a family member or me have shopped in it. These two businesses are quite the opposite; Sealy Beds manufactures their own products and sell them to different stores. Whereas Asda buys their products off other brands and sells them in there own supermarkets.
General Information on Sealy Beds
Sealy Beds UK is a part of the Silentnight group that is based in Lancashire. The brand came to the UK in1974 and it is located in Aspatria, West Cumbria. In Aspatria it operates 200,000 square foot manufacturing plant; it supplies beds to retailers all over the UK. In the year 1999 Sealy Beds celebrated its twenty-fifth anniversary.
Sealy is primarily an American owned company, Sealy brand is also made in many other countries including:
- New Zealand
- The West Indies
- South Africa
When Sealy started making beds its annual turnover was a mere £450,000, but Sealy started to flourish and it has now established itself among the leading bed manufacturers such as Sleep Easy, Millbrook, Myers and Slumberland.
General Information on Asda
Asda has made itself the best value food and clothing superstore. Asda became part of ‘The Wal-Mart Family’ on 26th July 1999. The company was formed in 1965 by a group of farmers from Yorkshire. It has come a long way since then, it now has 240 stores and 19 depots across the UK. Asda offer prices on an average of 10% lower than there main competitors such as; Tesco, Safeway, Sainsburys and Morrisons. Asda employ 100,000 workers and they have the best reputation for being the best and friendliest in the industry. They work with over 2,800 suppliers.
Sealy Beds Location
Sealy Beds is located in Aspatria, West Cumbria. Aspatria is known as an unemployment blackspot. The nearest city is Carlisle, which is half an hour drive away. The West Coast InterCity Railway links Sealy to the rest of the UK. The company tries to ensure that its location will never affect its product cost. When it comes to distribution Sealy Beds never ship fresh air, by this they mean because they are so isolated in the North West and the majority of their customers is in the South East it is so costly to distribute their goods. They use all the space they can and don't waste any.
On the map to the left is from Aspatria to London it is 5 hours minimum drive. This would cost a fortune to distribute all over the UK.
If Sealy Beds
set-up again in a different location, it would not locate in Aspatria because of how isolated it is. They would maybe locate in the Midlands. I think an ideal place would be Birmingham because it is in the middle of
England this is to distribute over the UK and it is close to motorway links and main airports.
Asda are a Supermarket chain they have stores in the UK everywhere, they may be even located internationally. Asda tend to locate either on the outskirts of a town/city or in the town/city centre, facts have shown that Asda locate on the outskirts 36%, the city/town centre 40% and the suburbs 24%. Usually in many cases the Supermarkets in town/city centres do the best. By the best I mean make profit or gain more and more customers every year. Businesses locate in different areas; they make their decisions depending on different factors. It depends on nearness to customers, transport links, financial help, the cost of premises and the history and tradition of the area. In my opinion the one that is most important is nearness to customers because if you have no customers you have no business. Another that may be considered to be important is transport links because you don’t want to be too far away form main places in the UK because you will use most of your money on distribution.
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Sealy Beds Ownership
In 1947 a man called Tom Clark setup a business called Silentnight Holdings PLC (Public Limited Company). It was a family based company; this means that the family owned the majority of the shares. A PLC is when the company sells it shares to the public to gain money which they use to invest in new ideas. The accounts that a company has are made public that could be described as being one of the knock on effects of being a PLC, another problem of being a PLC is that, there is a lot more red tape (paperwork) and legislation (laws). Sealy Beds changed their ownership in the mid 1970’s there reason for this was that there is less bureaucracy and red tape. They change to a LTD Company (Private Limited Company). I went on a business trip to Sealy Beds in Aspatria and another pupil asked for figures on profitability and the worker from Sealy Beds said no because they are a LTD and they don’t have to give us them; not even the employees were the told the figures of profitability.
Asda was a PLC but they later got bought by a large American business called Wal-Mart. Although another company bought Asda out they still kept their original name of Asda. Advantages of being a PLC are that it is easier to raise money for further development in their stores. AGM’s (Annual Governor Meetings) are held and also annual reports are issued to keep all the share holders up to date on what is happening in the business that they have bought shares in.
Sealy Aims & Objectives
Sealys Aims and Objectives are:
- Ensure a high quality product
- Keep the customers happy
- Continuous Improvement
- Safe working environment for staff
- Develop new products or services
Sealy's main objective is to make a profit; their workers are on a piece rate, this means that however much work and products they make they get more money for more work. If the workers are motivated by the fact that they will get more money they will make more products and Sealy will sell more and make a profit.
Asda Aims & Objectives
Asda's Aims and Objectives are:
- Keep the customers happy
- Make a Profit
- Always have products in stock
- Keep low prices
- To attract new customers
- Expand or make new supermarkets
- To sell at least one product from a local
supplier in every store
The reason for having at least one product in each store from a local supplier is that it caters for that specific region with their specific taste and it gives small businesses the chance to grow.
Currently Sealy’s activity is manufacturing they makes beds and they are part of the secondary industrial sector. There are three industrial sectors that a business could possibly be in:
- Primary; Take natural things
- Secondary; Produce/Makes goods
- Tertiary; Provides a service
Sealy Beds has also considered making bed steads and they gave us a reason for this which was that the market for beds is not what it used to be. Sealy Beds offers every size of bed whether it has draw’s, the size of the base or the type of material on the base. Overall Sealy Beds has fast become one of the best bed manufacturers if not the best. The HRM (Human Resource Manager) told us that they only make beds when they get an order on demand. They have low stock levels which we seen on our trip to Sealy Beds in Aspatria.
The picture on the left is called a peak and
trough diagram. This is to show demands when they have them and when they don’t.
Asda’s activity is to sell things on to customers. There industrial sector group is Tertiary, the reason for this is that they provide a service by selling things. You could also include Asda into the Secondary industrial sector group because in specific stores they have bakers which make their own products.
Sealy Beds Functional Areas
Sealy communicates between functional areas by:
- Mobile Phones
They do not use video conferencing to other countries they do not see any reason for it.
Recruitment: On our visit to Sealy Beds they told us that they had no plans to expand their operations. The HRM told us that the market for beds was not growing so they didn’t need to have recruitment campaigns. When jobs become available by retirement or being promoted then they have to start having recruitment campaigns. The HRM at Sealy Beds in Aspatria started to work on the shop floor through all his hard work, training and development and different promotions he ended up as the HRM. An advantage of this is that it may have a positive influence on other worker to try and work harder so they could possibly get promoted. All of the jobs he has worked in he knows what to do in each of them so he knows what is expected of the workers. The internal promotion would be cheaper then hiring a new person form elsewhere. The reason for this is that you would have to offer them more money to attract them to you if they have another job and if you promote instead of hire the person that you have promoted will know what is expected of him also they wouldn’t have to explain all the rules and expectations of Sealy to the person which has been promoted. A disadvantage and there isn’t many of them is that it may cause conflict between colleagues and friends because they are jealous or the person who has been promoted may not have managerial skills whereas if you hire someone externally who was previously a manager elsewhere would be better in this scenario.
Also to do with recruitment is to retain good employees which you have, this can be costly.
Why employees leave:
- Better job elsewhere
- Unfair treatment
- More money
- Might move away
At Sealy Beds they vary the jobs that employees do which stops boredom. This would also be good for the workers because they will learn different skills or improve on old ones.
If you retire form Sealy Beds a perk is that you still get invited to Christmas Parties. They don’t forget old friends.
Training: People at every level of Sealy’s business are given the opportunity to develop their skills and themselves. The company gives all employees every support both in the form of training in-house and the opportunity to gain outside qualifications up to and including university level. Every year Sealy undertakes a detailed analysis of training needs to ensure that its training programme continues to meet the aims set out in the company’s business plan. Individual staff reviews, which are held annually also, enable employees to be actively involved in the planning process and give them an opportunity to discuss their own training needs. All employees are given the company training manual in order to familiarise themselves with company activities, products and policies. A corporate video is used as part of the induction programme for new employees, for showing to potential customers and for educating retails sales staff – both on-site and for in-house training sessions around the UK. Training courses have included Computer Literacy and Information Technology also known as CLAIT. Sealy was also responsible for recruiting Cumbria’s first Modern Apprentice, a sewing machine mechanic, who the company hopes to develop as a manager of tomorrow. On-site conference and training rooms provide state-of-the-art facilities for all internal employees, as well as customers who visit the factory on familiarisation trips. People from the factory are taken on trips to Trade Shows, so that they can see the product they have helped build, actually in the market place. As a result of its commitment to training and Human Resources, Sealy UK has received a number of industry standards and awards. It was the first company in the furniture industry to gain the Investors in People (IIP) standard and has also received the Northern Development Corporation’s Partners in Quality Award, for the Fit For Work Award for disabled staff, Cumbrian Business of the Year Award and was runner up in the Barclays Bank 10th Northern Business Awards.
Finance: The Financial Department at Sealy Beds job is to manage money coming in and out this, this maybe the most important thing in the financial department because if they make a mistake they could go bankrupt and close but really it was a stupid mistake by one of the workers. Another thing is pay bills and wages, if they don’t pay wages it would maybe have a few effect, the workers would go on strike and they would be able to make enough products and they wouldn’t fill orders in time and they people that wanted the order would go to one of Sealy’s main competitors. They also raise money for the business they could do this by having sponsored events or having social events they may lose money but if they get enough guests and it all goes according to plan then they would raise that money back and possibly gain more which was the idea in the first place.
It is important that all the Functional Area communicate with each other.
For example; the marketing Department may come up with special promotions such as special offers i.e. buy one get one free. But it must communicate to departments such as Finance because they will need to cost it up to make sue it is a feasible idea. The Manufacturing Department will want to know because they will need to make more of the product and take on more staff or increase overtime. Therefore Human Resource Department must know as well to hire new workers or to change staff rotas.
Businesses have to communicate both internally and externally so that they can stick to delivery dates and know what the customers want.
- E-Mail, These are fast and easy to reply to, it is easy confidential but you wouldn’t want to send important documents because it might not always get to the intended receiver. People spend their time trying to hack and put viruses on computers so someone might be hacking and your E-Mail would never get to its intended target.
- Meetings, These can be used both internally and externally. You could have a meeting with your customers to discuss delivery dates or times. You could have one with the staff to say whether they are working well or not so well or you are going to fire or promote someone.
- Tannoy, These are usually if the business produces their own gods, they place them around the factory floor. They have a main microphone you speak into to get messages or announcements across the factory. They are very effective because they are loud and they would catch the workers attention.
- Notice Boards, These are usually used to pass information to groups of people. There are useful if you only want a certain amount of people and or also specific people to do tasks. These are one of the cheapest methods to communicate inside of the departments.
Those (above) are mainly ways to communicate internally.
Below are ways to communicate externally and to customers, communicating to customers is one of the most important aspects of a business.
The importance of communicating to customers is so that they know what order they want and to make sure they get everything right. Here are some ways businesses communicate externally (below) :-
- Letters, These may not always be the best method of communication because they are not time efficient or reliable and it takes to much time to reply.
- Telephone, These are one of the better methods because it is quick depending on rates maybe cheap and you can get a fast reply. You could consider a disadvantage to be that you don’t know whom you are talking to. Sometimes you need to see the person you are talking to see their facial expressions.
- Focus Groups, This is where the Marketing Department hold meetings with customers and they talk about what they need to change to keep up with the latest trends. They also talk to them about the latest needs and fashion.
- Faxes, This is another form of electronic communication, fax is short for ‘facsimile’. Fax is a system whereby a sheet of paper is scanned by a machine in one location, transmitted down a telephone line and printed out by a similar machine. Faxes may also be generated on a computer file and sent directly down the telephone line from a computer. These are fast and cheap way to communicate to customers.
- Web Sites, These are where they make a web site with an address which corresponds with your business. These web sites could have links to order or ask questions or maybe you have a complaint. Web sites may also have e-mail addresses that you could contact r phone numbers for any queries that you may have.
At Sealy everyday at 9:30pm they hold a meeting where all the staff discusses the previous day’s performance and the supervisors cascade all the information to the factory floor. Every six weeks there is a meeting between the members of the joint consultative community. Humans Resource things are discussed here also operational issues are discussed.
E.g. uses of machines, working on load times is the amount of time of customer order and delivery.
2 years ago the lead-time was 6 months it is down to 130-140 working days.
Quarterly (every 3 months) the managing director gets together with the whole factory and gives a presentation to see how the business is doing.
Factories only tend to communicate when there are problems or areas for improvement.
There are many reasons for using communication: -
- Asking for Information
- Supplying Information
- Planning Work
- Asking building managers to conserve water
- Explain how a job must be done
- Deciding on how to re-organise a department
Communication is the most important factor of a business whether it is to customer’s suppliers