The impact of economies and diseconomies of scale Tesco face
The impact of economies and diseconomies of scale Tesco face As businesses grow and their output increases, they commonly benefit from a reduction in average costs of production. Total costs will increase with increases in output, but the cost of producing each unit falls as output increases. This reduction in average costs is what gives larger firms a competitive advantage over smaller firms. This fall in average costs as output increases is known as Economies of Scale. Tesco benefit from economies of scale because they are constantly opening new stores around the country, such as their new store in Stockport. Therefore, they are always increasing their output, and so benefit from lower average costs. That is why Tesco seem to have the monopoly is supermarkets, as they have an advantage over smaller supermarkets such as Morissons, who do not buy as much quantity. In the short run, Tesco benefit from economies of scale by selling in bulk. They do this using special offers, such as 'If you spend £50, you get 5p per litre off your fuel' and also 'Buy one get one free'. These offers encourage us, the consumers, to buy in bulk. This means Tesco are benefiting from economies of scale as they are selling more quantity of their products, and are then able to buy more, and hence reduce their average costs. Tesco also benefit from economies of scale in the long run, because as
Tesco's organisational structure
Task 1 Organisation: TESCO plc Our Mission TESCO is a company, which is dedicated to professional management of both people and property. They are committed to each other through mutual respect and support. We realize the importance of individual growth in order to strengthen the whole. They invest in the development of the individual through training, education and reward. TESCO is committed to serve our owners, our residents, agencies and each other with integrity, fairness and honesty. They seek a balance between preservation of our resources and realization of profit. TESCO's strive to combine accuracy and reliability with accountability. TESCO is a caring organization that endeavours to exhibit PRIDE IN EXCELLENCE AIMS AND OBJECTIVE > TO INCREASE PROFIT: TESCO 's profits have topped analysts' forecasts, coming in at £1.4bn, with turnover up 11.5% at £28.6bn. Britain's biggest food retailer also said it had achieved its target for emerging markets as underlying operating profits rose 78% to £212m. Analysts had forecast that the underlying pre-tax profit would be between £1.33bn and £1.39bn. Six years ago, TESCO launched a four-pronged plan to drive growth in food, non-food, and retail services like banking and overseas hypermarkets in places like Asia and central Europe. > TESCO expands TESCO has been expanding more than ever for previous six
Management of costs.
Management of costs Fixed costs are the expenses that do not alter in relation to changes in demand or output (in the short term). They have to be paid whether the business trades or not. Examples are rent, depreciation and interest charges. Variable cost is the cost that varies in direct proportion to changes in output, such as raw materials, components, piece-rate labour and energy used in production. In other words, these are costs that should double if output doubles. Although break-even charts require the assumption that some costs vary in direct proportion to changes in output, in practice it is unlikely that any costs will be totally variable. For instance, raw materials are likely to cost less per unit when buying in bulk. Therefore the materials cost might not quite double when output doubles. Examples of variable costs are materials, labour e.t.c. Semi-variable costs are costs that vary with output, but not in direct proportion. Therefore, in order to calculate total costs at a specific level of output, a manager would have to work out the semi-variables especially. This makes them hard to deal with, notably in break-even analysis. Examples of semi-variables include maintenance expenditure and telephone bills. In the latter case, it is clear that although a doubling of customer demand would not necessarily double a firm's telephone calls or bills, it is
Should the welfare state be desirable?
Is the Welfare State Desirable? (14 Marks) The welfare state refers to the technique which the UK government has set up whereby a benefits system has been put into place in order to accommodate those who are in need and financially unstable.. The main principle of this program is based on the taxation revenue where those with an adequate income are taxed a proportion of their income; this is sent to the government in order to facilitate to the needs of the country. The reason to why the welfare state would be desirable for the country can be illustrated through the following the reasons: the main reason and aim for the welfare state is so that the existence of poverty in the country will fall substantially, furthermore, another reason to why the welfare state would be desirable would be so that the inequality gap between the richest and poor of the country is reduced, thus meaning that the rich are not as rich and the poor are not as poor. Finally, another reason that would show that the welfare is indeed desirable is that with the presence of a welfare state, the overall health of the population in the country is increased; through the funding of the NHS, a free organization in which all people of the nation can benefit. However, it can also be seen that the welfare state is in fact not desirable, the reasons that some may have this attitude is due to: as a result of the
State the assumptions of perfect competition. How does a perfectly competitive industry work in the short run and the long run? What makes perfect competition efficient?
State the assumptions of perfect competition. How does a perfectly competitive industry work in the short run and the long run? What makes perfect competition efficient? Assumptions behind a Perfectly Competitive Market In a perfectly competitive market it is assumes that there is a large number of small firms that all produce a homogeneous product. Firms in this market are all price-takers, where they use the selling price that it set by the price equilibrium. A perfectly competitive market also has no barriers to entry or exit; there is also perfect knowledge within the market. A perfectly competitive market must contain four characteristics in order to be perfectly competitive. These four are better described as: * There must be many buyers and sellers in the market however none of these should be able to influence the price. A perfectly competitive market usually has a small number of firms that supply to a small number of buyers. The buyers and sellers in this market are also price takers set by the price equilibrium. * All firms in a perfect market should have an identical output, where all the firms produce a homogeneous product (where one good is as good as another) and these goods should be perfect substitutes for one another, in order for the consumers to view the products as identical as each other. * A perfect competition is assumed to have no barriers to the
Birmingham International Airport - Location
There are a lot factors that need to be taken into consideration where you are choosing an appropriate location for a business, and BIA is no exception. Competitors: Don't go and pick somewhere where you competitors are based, because the chances are they are already established and they will just beat you into the ground. Its like if you got a choice, race a cheetah or a snail, you'd be picky the cheetah, not impossible to beat, but required a lot of work, which is what would be needed for anyone who opens up a business next to a rival; BIA must be made accessible to everyone who wants to use it. I am not just talking about (potential) customers; you also have to note there must be easy access from BIA to their local suppliers. As long as the there are sufficient links to get to and from the airport, and generally any time of day, for example BIA's current location, anywhere that fits this description and the ones below are okay. Surrounding population. BIA will generally by targeting the population around the airport for the most potential customers, so if there aren't any or there are very little, this is a bad start. Cost of buildings / work. If the building is already built, BIA won't pay over the odds for it, and the cost of the building are usually affected by the cost of land, if that is too high, then this is not suitable place. The reason any business won't
functional areas in oxfam and sainsburys
In this assignment, I will be writing about the different departments in Oxfam and Sainsbury's. SAINSBURY'S One of Sainsbury's main functional areas is distribution. They ensure goods are delivered in the right place, at the right time and in the right condition. Distribution is also involves arranging for goods to be cost effective. * Planning vehicle routes to avoid back tracking. This keeps fuel costs down and saves time. * Making sure that goods are stored appropriately before they are delivered. * Checking if deliveries match the order. Human recourses The human resources of business are its employees. HR is responsible for employing knew staff and making sure each vacancy is filled. * Advertising job vacancies. * Maintaining staff records. * Advertising promotional opportunities. * Checking health and safety and keeping accident records. Finance In nearly all organisations the most important functional area is the finance department. Sainsbury finance staff support the accountants by keeping financial records. * Record money received * Checking and paying invoices received. * Preparing the pay roll and paying the staff salaries * Issuing regular budget reports to all the departments. Customer service Customer service is also a main functional area in Sainsbury's. This part of Sainsbury's handles complaints positively and professionally. They also: *
explain how each stakeholders or groups influence a business - Which in this case, will be Sainsburys.
Section A, Unit 2 - Influences As you have noticed, stakeholders have interests in the business but they also have influences. In this part of the Unit I will explain how each stakeholders or groups influence a business - Which in this case, will be Sainsbury's. Shareholder Shareholders influence on Sainsbury's would be the actual share prices. This is because the shareholder will want the share price to increase, as they want its "value" to be greater. They can also have some sort of power and influence within Sainsbury's if they posses a large share, which could lead to a take over. Employees Employees have an influence on Sainsbury's, but only to an extent. This is because the employee has a limited amount of influence to Sainsbury's as it is up to the employer. The employer will determine the amount of influence through: * Training that they have received. * Rules and Regulations. * The contract between the employee and the employer. Which include pay and working conditions, fringe benefits like a company car, discounts, and travel/health insurance. * Promotion. * Job security. However, the employee does have the influence which affects the reputation of the business and the quality of the service provided, as if this is not sufficient for the customer, he/she will go some where else. Managers The mangers influence in Sainsbury's is to carry out day to day
Define "The multiplier effect" and explain how it works. Using practical examples of how the east and north London people and firms might benefit from a multiplier effect of the Channel Tunnel terminals.
Economics Homework for Barry . Define sustainable growth and write and explain using examples. Sustainable growth is when countries aren't using up all there non-renewable resources which is good as this can cause problems for the future generations, instead their using their renewable resources which allows future growth to continue. By using up all non- renewable resources it will cause future growth to end, will cause damage to the bio-diversity and may produce unsustainable pollutants, which is very bad for the economy. Sustainable growth is when the economy increases output in a way which allows future output to continue and increase. This can be done by using more of the renewable resources such as paper, glass and aluminium which can be recycled so that it isn't wasted allowing future growth to continue. Also to use less of non-renewable resources such as coal, oil which can not be recycled thereby it cause future growth to end. 2. Define "The multiplier effect" and explain how it works. Using practical examples of how the east and north London people and firms might benefit from a multiplier effect of the Channel Tunnel terminals. The multiplier effect is when changes in expenditure to the economy produces a more extensive output upon total economic activity, allowing expenditure to continue feeding the economy. This is usually done from investment expenditure,
Marketing mix and segmentation of Sony.
MARKETING MIX AND SEGMENTATION OF SONY In marketing two of the most important things are the marketing segmentation and the marketing- mix. Even if you come up with a "gee-whiz" product, if you do not use the right marketing ingredients the result can be devastating. Nowadays, Sony is the one of the most successfully growing electronic companies in the world but it cannot be attributed just to the technology and the innovation. Sony's marketing segmentation consists of four different lines: electronics (camera, computer, camcorder, TV, Walkman, MP3 players), Sony Music and Sony Pictures, digital entertainment (Play Station) and mobile phone (SonyEricsson). One of the biggest steps in Sony's life was when the Sony Computer Entertainment sector was set up with the Play Station 1 (PS1) concept, and later developed with the Play Station 2 (PS2) concept. By the mid-1990s, the whole company was in a deep funk. Its profits had sunk from a high of $1,3 billion in 1992 to a loss of $3,3 billion in 1995. The solution was the Play Station division in 1993. Less than 5-years later, the Play station business had grown to achieve an incredible 40% of Sony's $3 billion in operating profits and nowadays, it brings nearly half of the company's profits and Sony owns the biggest share from this market in the world. So how was this success compromised? Task 1 SEGMENTATION Sony
