Features contributing to the success of contrasting businesses
Type of business
The two businesses I have chosen to investigate are Tesco and British Heart Foundation (BHF). Tesco is the largest British public limited company and it is an international worldwide business founded in 1919. Tesco is a profit gaining company being the third-largest retailer in the world.
British Heart Foundation (BHF) is the largest charity organisation in the United Kingdom, it is a local organisation funding research for heart and circulatory diseases and their risk factors. The BHF is a not-for-profit organisation which was founded in 1961 by medical professionals based in London, it is also a great opportunity to volunteer and meet new people as well as adapt new skills.
Tesco is a huge organisation which supplies merchandises including: multinationals groceries, general goods e.g. cleaners, widescreen TV’s, toiletries etc. Tesco is in the tertiary sector, which is businesses that provide goods and services to businesses and customers in exchange for payment. This is because Tesco does not produce goods, it buys from the primary and secondary sectors and sells products to customers in retail which provides a service. Tesco’s aim is to be and stay the best and largest retail supermarket worldwide and to provide worthy quality services and products at affordable prices. Additionally, their objectives are to provide customers outstanding service, an easy, pleasant and affordable organisation to shop from and to recognize customer’s wants and needs.
BHF is an organisation that sells goods that have been donated from people that are not expecting anything in exchange, such as; books, clothing, DVDs, antiques, certain furniture and electrical items. These donations can be money or goods which are used to raise funds for life saving research on heart and circulatory diseases. The British Heart Foundation organisation is in the quaternary sector, this is where the business is doing research and gathering information within the organisation. Therefore, BHF is in this sector as they are researching about heart disease, the circulatory conditions and risk factors. The British Hearts Foundations aim is to be a help in future from curing the cardiovascular disease and to make sure they have enough research so people are not suffering or dying from the awful cardiovascular disease.
Tesco and the British Heart Foundation both have the same aims and objectives, these are that both organisations want to make a difference in the human population. However, Tesco’s wanting to ‘help make sustainable product affordable and accessible for all’ and the BHF’s ‘mission is to play a leading role in the fight against disease of the heart and circulation’. The difference is that Tesco is a for-profit business which will help people internationally to afford daily needs, whereas, the British Hearts Foundation is a not-for-profit organisation which will provide research and information to save lives. Also, Tesco’s products are brand new and they have a variety of different choices, while, the BHF has second hand products with a less selection of choice.
Tesco is a public limited company, PLC, which is owned by several partners and owned by shareholders who fund the company. An advantage of the business being a PLC is that it is able to raise capital for expansion by trading shares, as well as having a high status which will benefit from more publicity and awareness. Also, the business could offer shares to public which would spread company ownership among a large number of shareholders, this would allow investors to sell their own shares at a profit. On the other hand, the company will suffer from lack of privacy as financial accounts are openly available for all to view, this could leak some important information which could degrade the business. In addition, as the business is a PLC the original owners will eventually lose some control and the possession of the business as shareholders will have voting rights.
Tesco has limited liability, which means that the company has legal protection over shareholders personal assets when in debt, therefore, creditors cannot take personal assets for example; house, savings, accounts and vehicles.
British Heart Foundation is in partnership with Santander UK which are ‘committed to supporting local communities where our people live and work’. Santander’s sponsorship of the BHF cycles are encouraging locals to get fit whilst fundraising for the British Heart Foundation cancer research. An advantage of partnerships is that the business gains more capital and it is easier for the organisation to start-up and flow as costs are low. Additionally, another advantage of partnerships is that all risks, expenditures and responsibilities are shared between the partners and they would not have to pay income tax. However, a disadvantage of being in partnership with another business is that there will be many disagreements between the two businesses, this could lead to roughness between partners and the management which would not be very beneficial towards the company. Also, if partners join or decide to leave, there will be possibilities of having to value assets which could be incredibly costly, as well as this, trust is significant between partners, so they should have a written partnership agreement down under deed.
British Heart Foundation has unlimited liability, which means that the organisation does not have legal protection over personal belongings such as; house, savings, vehicles etc. each partner is responsible for their share of the partnerships debt as well as their own.
Stakeholders are anyone who have their own interest in the actions of a business. Tesco has many internal and external stakeholders and they are; the customers, owners, employees, suppliers, and local communities. Now I will explain why these stakeholders are interested in the business.
Internal stakeholders are people who work within the organisation.
Owners of the business are people who make the decisions, investments and are the ones to hire staff to keep the business going, review sale posts, adjust activities, meet budgets, collect tax, create computer network etc. therefore, it is vital that owners are prepared for their duties and are prepared to hire, train and guide staff. The owner controls the business, can fire managers, employers or directors and can give away the business to another, if the business is not selling products, there will be no profit made, therefore, it will go bankrupt.
Employees are people who work in an organisation under an employment contract. They are interested in the business as they want a constant working environment and high wages so they are able to help themselves in their personal lives. All employees must be interested in working for Tesco as they will be serving and helping customers daily, therefore, they should be engaged in their positions.
External stakeholders are people who work outside the business but are involved and affected in/by the business.
Generally, customers want quality products at a low, affordable price with a variety of goods to choose from. Tesco doing this would impress customers which would result in Tesco receiving positive reviews and word of mouth, therefore, this would attract more and new customers. As this happens, Tesco would need to keep their customers interested and up to date, additionally, this makes the customers a pressure group as they are pressuring Tesco into making sure they are meeting the customers’ needs. This would result in customers’ repeat of purchase and would gain Tesco the customer’s loyalty.
Suppliers are people or companies who provide goods or services to other companies, this is a way to contribute to the development of the business. The suppliers that are working with Tesco provide them goods on a regular basis and in exchange want rapid payments and to be included and signified by the company in respect. They are interested in working with Tesco as they want to be represented by a company with high credibility which can pay them quickly. Therefore, this would result in suppliers giving quality goods and would make them reliable external stakeholders.
The local community is a group of interacting people living in a common location. These local communities’ interests are having Tesco give back to the surroundings by giving jobs to people living in the community and by helping out with local schools in the area. By Tesco giving back to the community and by hiring locals to work at the business, this would attract more customers to the business which would raise awareness and word of mouth by social media, influencing more people to come and shop at Tesco.
All external and internal stakeholders influence Tesco as they have a big part in the aims of the business, they have a say when the business is making decisions which can affect the organisations actions, policies and objectives. Having stakeholders in the business increases the business’ success and achievements.
British Heart Foundations
BHF has a couple internal and external stakeholders which are; the volunteers, the local community. Now I will explain why these stakeholders are interested in working for British Hearts Foundation.
The BHF’s volunteers are people who are wanting to work at the organisation without getting paid or getting anything in return, these volunteers can be anyone in age without needing reference or having job experience. They help out in the organisation by stacking book shelves, cleaning/moping, helping customers, bringing in items to donate. The amount that’s raised, for every £1, 70p is given to research for heart and circulatory disease and the risk factors. BHF accepting volunteers can benefit the organisation as the volunteers will not be expecting to be paid, so the organisation will not lose money from paying staff. Also, there are personal benefits from volunteering for a business, these are; building confidence and motivation, the joy of making a difference, improve social interactions and a chance to be a part of a community as well as meeting new people. The volunteer’s aims are to help make a difference to the community and to people around them, while developing on skills, knowledge and experience.
Local community forms groups of locals to help for the fundraising, these could be done by small fairs, for example, having a bake sale, market shops, having dance/music shows or competitions, or having activities such as; football, running and cycling. The locals aim is to help the organisation achieve the best for future research, which can help find a cure towards heart and circulation disease and its risk factors.
Tesco + BHF
Internal stakeholders –
The owners at Tesco are satisfied when their hard work and effort has been put to good, by this I mean how their business succeeds and achieves what they wanted. Additionally, owners are the most important stakeholders as they are the ones who make the most decisions and are the ones who make profit for the business which makes them successful.
There are many reasons to why owners may be facing difficulties, these are:
-poor customer service – lack of patience, poor communication skills, not understanding customer needs, not being able to help customers, lack of product knowledge, poor punctuality.
-poor recruitment – this could be extremely costly and a waste of time as they are having to go through hiring process to find the right employees that are right for the job and who have talent that’s needed for the business.
-employees leaving – when employees leave they are most likely to take ideas and promotional concepts to another business which leads to competition within the business.
-lack of stock – this could lead to customers leaving Tesco to visit other organisations which meet their wants and needs, also may lead to lack of sufficient goods, which lead to lack of customers, which lead to lack of sales, which leads to loss of profit, leading to the death of the business and getting bankrupt.
The owners have the most influence on the business because they have control over how the company succeeds. They need to be sure of the decisions made as it can either be an advantage or a disadvantage towards the business.
The employees working in Tesco would want job security, which would make them feel comfortable and safe working at Tesco, this would help put them at ease while they are working as they would not be worried about feeing endangered. Also, employees that have been working a longer period at Tesco may want a promotion and a pay rise, this may make them feel valued, and so they would carry on the hard work and would try their best to help satisfy the company.
Employees may be annoyed and unhappy at certain times during the period that they work in Tesco. This is because, if the company is not doing so well, the employees are at a risk of becoming unemployed and having a negative review which could result in them not being able to be recruit in another business and ending up being jobless. Staff are expected to take care of themselves as well as taking care for customers which may put them under pressure, because they would need to follow instructions, policies and procedure which would stress them out.
Employees influence your business by understanding customers’ wants and needs and getting the right information from customers to help build the business and give feedback to make changes. This would give the business a chance to improve and to satisfy customers by giving them what they want and what they’re looking for in the business.
Tesco’s customers want high quality goods at a low and affordable price, with variety of products to choose from that are up to date and in fashion. As well as having quality goods, they are expecting to have amazing customer service, for example, employees having patience while customers asking questions or looking for a certain products that they need, they are wanting staff to have clear communication skills and understanding their queries and also wanting them to have positive language with honest feedback, this may make customers feel comfortable asking questions.
Additionally, the British Heart Foundation’s customers would want the same, however, they go into the organisation wanting to purchase products for the fundraising, and they expect good customer services and a safe environment to shop in but overall they go in wanting to help make a difference in the human population. The customers bringing in donations for the organisation would be proud and happy with themselves as they would feel as though they’re making a difference in the community and for the human population.
On the other hand, if customers are not getting what they want, for example, poor quality goods, poor customer service, they may not want to shop from the business. This could lead to customer complaints, which would spread by word of mouth and could end up with less customers attending Tesco. This may lead to loss of sales and loss of profit which could result in business failure and business getting bankrupt.
British Hearts Foundation’s customers want them to be honest with the fundraising, they want to be told how the research is going and they want to be updated with what’s happening. This would make them feel included, however, if they are not being updated or not told, then they would feel like they aren’t doing enough to help.
Customers can influence the business as they have the choice whether to continue buying goods from the business or going to another business and getting a better service. The customers may advantage the business as they could give reviews which can be used to help improve the organisations.
The suppliers providing quality goods to the company will return them with rapid payments as well as a reliable relationship with the business. Suppliers can decide if they want to raise prices for which can help them gain profit.
The suppliers can get annoyed or angry as the business could be having cash flow problems, which end in the suppliers not getting paid in the time they wanted. Also, if the business they are supplying for closes down or changes suppliers, they may lose money and may lose work which could result in the suppliers not having a company to supply for.
Suppliers have a huge influence on the business, this is because they have control over products and it is important for them to give high quality products in exchange for rapid payments. However, if the supplier gives poor quality products to the business, this may degrade the business’ reputation and would not meet the customer’s wants and needs. So business’ need to make sure they have access to quality goods that are good enough to sell to their customers.
Tesco’s and the BHF’s local communities want the organisations to give back to the locals, this could be done by the both organisations providing job opportunities, which would lead to rise in awareness and would gain more attention from people. Also, Tesco’s locals would want the business to help with the community for example; local schools, corner shops etc. However, BHF’s locals would want to help by organizing charity events to raise awareness and include more locals in the fund raising. Their aims would be to attract more people in by either, purchasing goods from Tesco or for helping with donations for the charity fundraising.
On the other hand, the locals may not be having the best experience from the organisations and this could be because, Tesco may be struggling with keeping their rubbish away from the community, which could lead to pollution spread because of car parking and could cause illness to locals, this could be bad for the business as well as gaining bad reviews from them, they may also complain because of noise in the neighborhood. This could be due from cars going to and from the business. Therefore, the locals may want more from the business so they feel satisfied.
The local community can influence the business as they could help spread word of mouth to other people which can help raise awareness for Tesco and the BHF. This is done by them giving positive reviews, recommending the business, purchasing products from the same business and helping out with charity events. Additionally, most local communities would also aim to have access to a service 24/7 which has quality products that are available whenever, and for them to have efficient staff members to help them out during late night shopping, this would make the business a promising store as they could count on it when they are needing specific products at such times.