History Of Tesco And Costco Wholesale Enterprises Business Essay

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These slides explains the history of Tesco and Costco Wholesale enterprises. The information given in the slides are about the nature of the businesses of both organisations and who are the customers and how they came into existence.

Slide 5:

This slide explains the Purpose of Tesco, what are the key area of performances and the objective of Tesco plc.

There are number of purposes of any business so as Tesco.

The Tesco supplies a wide range of goods which it sells both in store and online shopping. It also offers the financial services such as its credit card, personal loans, insurances etc.

Tesco run various strategies to retain its loyal customers as well as its employees. It makes sure to achieve its mission and vision both by knowing its customers through offering Tesco Club card services, vouchers etc.

Tesco is also involve in expanding business and reinvest its profits in shape of opening new stores around the world, which increases the Tesco profit not only in Europe but also in Asian market .

One of the Tesco objective is to aim the business strategies for a long-term goals which will help in establishing the firm to run projects for 5 years terms in order to expand the business not only in the UK but also in the worlds wider market.

The Tesco also focuses on the values sit at the heart of the business and help deliver their core purpose-to create values for customers to earn their lifetime loyalty.

Slide 6:

This slide explains the purpose of Costco Wholesale:

Like any other business Costco is also customer focus organisation, to give customer best value at the best price.

Not only providing customer the great values of the products but also treat people right with respect and dignity.

Grow the business long term not only for the end consumers but also for the business customers which helps in growing the profit of the firm more effectively.

Make the organisational strategy for long term so that the organisation focuses on the long term goals and business sustainability.

Costco also aim to open new 50 to 60 stores on different locations to attract the customers from various markets.

The mission of the organisation is to provide good quality goods and services at all times at lowest possible prices and to obtain this mission the Costco follows the code of Ethics as well as the legislative polices come under the regulations.

Slide 6 and 10:

These two slides explains the 3 stakeholders of the organisation;

Tesco:

Stakeholder are the group of people who have an interest in the business or business activities. There are two types of stake holders, internal and external stakeholders. The internal stakeholders could be owners and shareholders whereas the external could be government, community etc.

Owners and Shareholders: these are known as internal stakeholders who have direct impact on the business or business activities. They have a right to get part of company's profit proportionate to the number of shares they possess Tesco Plc.

Government: Government plays very important role for the growth of any business. The economic policies have direct affect or impact on business costs and prices through taxes and interest rates. These legislations regulates the business activities such as business environment, health and safety, what products and services the business can offer and can not. As a Tesco's reputation in superstore area of business the Governments helps in improving and growing the business. As a stakeholder, employment, financial success, tax payments, codes of ethics etc.

Community: the local community often helps in providing the staff or customers, business often supplies goods or services to local areas. The community main interest is to have clean and healthy environment and by looking at Tesco the community encourages Tesco 's effort in providing good environment to the society and follows the ethical activities and charitable activities.

Costco:

As we defined earlier all businesses have their stakeholders who possess some involvement in the businesses so as Costo.

Owners and Shareholders: the owner and shareholder have right to get the part of company's profit proportionate to the number of shares they possess in Costco , the objective of shareholders and owners are to gain maximum profit.

Government: like any organisation Costco is also affected by government polices and legislations. Successful firms are good for Governments to have confidence in growth in their economy, increase in employment but at the same time these organisations have to follow the government polices too in shape of tax and interest on the products and services. As a stakeholder, employment, financial progress, tax payment, healthy and safe environment, ethical activities and charitable activities are important for the organisation.

Community: the local community helps in providing the business staff and customers and also business often supplies goods and services to the local areas. The community promotes the business who have produced healthy and safe environment in the area and people are happy by the organisation's activities. Also that is firms responsibility too to make sure if any support community needs they should involve in that.

Slide 11:

This explains the strategies and responsibilities of both organisations under study.

Like any other business the Tesco and Costco shares similar strategies and corporate responsibilities which includes:

Local community activity.

Create sustainable growth.

Code of business conduct.

Managing corporate responsibility .

Donating money and time is good for

- membership

- patronage

Task 2: Nature of the Operating Environment

Local market: Noori supermarket

Noori is one of the local supermarket based in East London, this is a local type of business that needs provides the goods t o the local customers. This type of small business needs to fulfil the governments requirements which includes the employment tax, business tax, interests etc. This type of small business also has to follow the health and safety law.

Economic Factor:

The economy factor is defined as a state plan for its services, goods produced etc. there are three ways the economic factor counts:

The market economy

The mixed economy

The command or planned economy

The Noori supermarket is based on the market economy which depends on the local buyers and sellers who derived the economy ups or downs.

When it comes to government fiscal and monetary policies on local businesses it based on various factors such as:

Inflation

Equality

Employment

Stable economic growth Income distribution etc

Above are the factors that count in any business when government made its policies and all business has to follow them regardless of small, medium or large organisation

In local business competition is very low, which does not affect the business but customers benefits from that compaction and these types of business does not have any policies but government legislation to follow.

National Market: Kebabish restaurant

Kebabish is a national level type of a restaurant business. According to UK law this type of business need to fill some government policies to run business in the country.

Employment law , hygienic food law , tax registration and health and safety law etc.

This type of business have a very good impact on economic system to grow, such as increase the employment level, pay taxes etc.

this type of business have some competition in the market which affects on the profit of the business.

International Market: Tesco plc

Tesco plc is a large organisation expanded overseas, running its operations outside the UK market including Europe and Asia.

This type of firm has wider aspects of growth and the legislation for large organisations are vary than small firms. The annual reports shows the employment, profitability of the organisation and the tax paid accordingly.

Economic policies of government affect the firms` costs (through taxation and interest rate)

Legislation regulates what business can do in this area such as environment and occupational safety and health.

Successful firms are good for government as they create wealth and employment.

Task 3: Organisaitons and Behaviour

Market structure and pricing outcomes

Market Structure:

It is interconnected characteristics of a market which includes the relative strength of buyers and sellers and the degree of collusion among them. It also includes the level and forms of competition, extent of product differentiation and ease of entry and exit from the market

Structural characteristics of a market

The number of firms and the extent of overseas competition (e.g. from within the single market or in global markets)

The market share of the largest businesses (measured by the concentration ratio)

The nature of costs in the short and long run

The degree to which an industry is vertically integrated up and down the supply chain (e.g. forward and backward vertical integration)

The extent of product differentiation / product branding

Price and cross price elasticity of demand

The number and size of buyers of the industry's product

The turnover of customers from one seller to another (also called "market churn") - this is affected by brand loyalty and the effects of advertising and marketing

Nature of Costs:

There are number of ways the nature of costs can define in the market.

Entry costs into a market

Capital costs will vary from industry to industry

E.g. a natural monopoly

Sunk costs

These are costs that are not recoverable

E.g. advertising and marketing

Depreciation of capital equipment

High sunk costs makes a market less contestable

Natural cost advantages

Location advantages e.g. close to ports, access to cheaper labour

Ownership of important raw materials

Control of the supply chain through vertical integration

Product homogeneity or differentiation:

Homogeneous goods

Essentially the same physical characteristics

Associated with perfect competition

Potential for different grades

E.g. steel, cement, coal, fresh fruit

Non-homogeneous goods

Products differentiated from their competitors

Branding

Packaging and marketing

Strong product differentiation and brand loyalty allows firms to charge higher prices

Demand become less price elastic

Reduction in the cross-price elasticity of demand

What are the Performance Indicators?

Performance indicators are the factors that can affect the business in different ways;

Trends in real price levels over time

Size of business profits - evidence of excess profits?

How much spending on research and development - does it lead to a fast pace of technological advance and innovation?

How much spending on human capital, does it lead to rising labour productivity in the industry?

Does the conduct of firms give rise to efficient outcomes?

A locative efficiency

Productive efficiency

Dynamic efficiency

Market Structure:

Performance and changing market

Performance can affect structure

Top performing firms will gain market share at expense of rivals

This gives them more market power

Fine line between market dominance and economic efficiency?

Market conduct affects structure

E.g. decisions about research and development and marketing

Strategic behaviour of firms especially in oligopoly makes it difficult to rely on the structure conduct performance model

The theory of contestable markets stresses the dynamic nature of competition especially when a market is open

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