Conor Cunningham
Unit 1 – Exploring Business
P1 – Explain the features of two contrasting businesses.
TESCO
Tesco is a multinational grocery and general
merchandise retailer founded in 1919 by Jack
Cohen, a market trader in London. Since then,
it has grown to become the third largest
retailer in the world in terms of profitability.
Tesco is the UKs largest retailer. It has around 7,000 stores and nearly 600,000 employees,
nearly half of those staff are in the UK. Tesco has now went global and has stores in 12
countries and is growing more and more everyday. Currently, there are more han 27 million
Tesco Clubcard holders outside of the UK which goes to show how fast it is growing
internationally. In 2014, Tesco had sales of around £1.02 billion every week!
The mission statement of Tesco identifies their approach to communities and the
environment as the aim of their business and their purpose is ‘to create value for customers
to earn their lifetime loyalty’.
Tesco have around 100 million customers per week which helps them possess a market
share of around 30%. This goes to show the scale on which Tesco operates. A 30% share in
the retail market is huge especially for a business in retail which is a massive industry.
Tesco doesn’t just sell groceries. As Tesco grew, they started to sell more and more goods
and offer more and more services. Some of these include;
Groceries
Eye testing
Insurance
Fuel
Clothing
In order for any business to operate. It has to have a purpose. It has to have aims and
something to work towards. Tesco’s main purpose is to make a profit and using some of
these profits, grow and grow. Tesco aims to provide the best shopping experience for
customers to help them enjoy a better quality
of life and an easier way of living. As well as the
purpose to make a profit, Tesco also aims to
provide an excellent service to all of its
customers.
Tesco is always looking at ways to grow and
expand. Apart from opening more stores across
, Conor Cunningham
the globe, Tesco has branched into E-Commerce. You can now purchase goods and services
online from their website. This branch out to online sales proved to be extremely successful.
In 2014, over a 6-week period at Christmas, Tesco brought in £450 million through online
sales alone. In February 2006, Tesco announced that it planned to move its brand into
America. By December of the same year, there were 200 stores in the United States. A
contributing factor as to how Tesco grows so fast is due to the massive profits it makes. But
how does it make so much profit where other businesses can’t seem to compete? It’s
because the goods and services are so cheap and affordable. The public love the products
because they are getting their money’s worth and because Tesco is getting bigger, they are
benefitting more from economies of scale. They can buy in bigger quantities so the price per
unit decreases. These behind the scene methods of saving Tesco money ultimately lead to
huge turnover.
With Tesco being a global organisation, it has many benefits for the company. These
include;
Increase in revenue. This is beause there are more stores bringing in money. This is
called greater revenue streams.
Market share increases. Becoming larger and growing helps dominate a particular
market. Diversification of a company helps to increase market share, which is exactly
what Tesco did.
Customer growth. Obviously opening more stores worlwide means more customers.
But, looking into it more: If a business grows to the point where they start
benefitting from economies of scale (production costs going down), they can sell the
products for less which means cheaper goods and happier customers.
Tesco has a few sources of finance such as retained profits and sales of assets/products in-
store and online. However, because Tesco has grown to be such a large company, a large
source of finance comes from the shareholders. This means members of the public can buy
shares of Tesco. These shares are available on The Stock Market and as of September 30 th
2015, one share in Tesco would cost 178.85p. Owning shares in Tesco enables you to receive
a share of profits in the form of a dividend. The more shares you own, the higher your
dividend will be. Being a shareholder does not mean you have control over how the
business is run. Each shareholder has limited liability so they can only lose what they have
invested in the business.
Tesco is a public limited company (PLC) operating in the private sector. The reason that
Tesco operates in the private sector is to maximise profits. It is not in the public sector as it
not owned or controlled by the government. Public sector businesses typically have the aim
to provide a service more so than to make a profit. So, Tesco remains in the private sector
as it aims to make profit. It also remains a public limited company so shareholders can buy
into the business which is a way of raising capital. There is no limit to the amount of shares
available to be owned by the public but there does have to be at least two shareholders at
one time. If there was only one shareholder, that person would have ultimate liability.
Unit 1 – Exploring Business
P1 – Explain the features of two contrasting businesses.
TESCO
Tesco is a multinational grocery and general
merchandise retailer founded in 1919 by Jack
Cohen, a market trader in London. Since then,
it has grown to become the third largest
retailer in the world in terms of profitability.
Tesco is the UKs largest retailer. It has around 7,000 stores and nearly 600,000 employees,
nearly half of those staff are in the UK. Tesco has now went global and has stores in 12
countries and is growing more and more everyday. Currently, there are more han 27 million
Tesco Clubcard holders outside of the UK which goes to show how fast it is growing
internationally. In 2014, Tesco had sales of around £1.02 billion every week!
The mission statement of Tesco identifies their approach to communities and the
environment as the aim of their business and their purpose is ‘to create value for customers
to earn their lifetime loyalty’.
Tesco have around 100 million customers per week which helps them possess a market
share of around 30%. This goes to show the scale on which Tesco operates. A 30% share in
the retail market is huge especially for a business in retail which is a massive industry.
Tesco doesn’t just sell groceries. As Tesco grew, they started to sell more and more goods
and offer more and more services. Some of these include;
Groceries
Eye testing
Insurance
Fuel
Clothing
In order for any business to operate. It has to have a purpose. It has to have aims and
something to work towards. Tesco’s main purpose is to make a profit and using some of
these profits, grow and grow. Tesco aims to provide the best shopping experience for
customers to help them enjoy a better quality
of life and an easier way of living. As well as the
purpose to make a profit, Tesco also aims to
provide an excellent service to all of its
customers.
Tesco is always looking at ways to grow and
expand. Apart from opening more stores across
, Conor Cunningham
the globe, Tesco has branched into E-Commerce. You can now purchase goods and services
online from their website. This branch out to online sales proved to be extremely successful.
In 2014, over a 6-week period at Christmas, Tesco brought in £450 million through online
sales alone. In February 2006, Tesco announced that it planned to move its brand into
America. By December of the same year, there were 200 stores in the United States. A
contributing factor as to how Tesco grows so fast is due to the massive profits it makes. But
how does it make so much profit where other businesses can’t seem to compete? It’s
because the goods and services are so cheap and affordable. The public love the products
because they are getting their money’s worth and because Tesco is getting bigger, they are
benefitting more from economies of scale. They can buy in bigger quantities so the price per
unit decreases. These behind the scene methods of saving Tesco money ultimately lead to
huge turnover.
With Tesco being a global organisation, it has many benefits for the company. These
include;
Increase in revenue. This is beause there are more stores bringing in money. This is
called greater revenue streams.
Market share increases. Becoming larger and growing helps dominate a particular
market. Diversification of a company helps to increase market share, which is exactly
what Tesco did.
Customer growth. Obviously opening more stores worlwide means more customers.
But, looking into it more: If a business grows to the point where they start
benefitting from economies of scale (production costs going down), they can sell the
products for less which means cheaper goods and happier customers.
Tesco has a few sources of finance such as retained profits and sales of assets/products in-
store and online. However, because Tesco has grown to be such a large company, a large
source of finance comes from the shareholders. This means members of the public can buy
shares of Tesco. These shares are available on The Stock Market and as of September 30 th
2015, one share in Tesco would cost 178.85p. Owning shares in Tesco enables you to receive
a share of profits in the form of a dividend. The more shares you own, the higher your
dividend will be. Being a shareholder does not mean you have control over how the
business is run. Each shareholder has limited liability so they can only lose what they have
invested in the business.
Tesco is a public limited company (PLC) operating in the private sector. The reason that
Tesco operates in the private sector is to maximise profits. It is not in the public sector as it
not owned or controlled by the government. Public sector businesses typically have the aim
to provide a service more so than to make a profit. So, Tesco remains in the private sector
as it aims to make profit. It also remains a public limited company so shareholders can buy
into the business which is a way of raising capital. There is no limit to the amount of shares
available to be owned by the public but there does have to be at least two shareholders at
one time. If there was only one shareholder, that person would have ultimate liability.
