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Stakeholders of Tesco Limited - Assignment Example

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The paper "Stakeholders of Tesco Limited " is a perfect example of a business assignment. Businesses while looking to work in society has to fulfil their obligations towards various sections of the society by identifying their roles and responsibilities. Irrespective of the organization or the nature of the business or the size of business organizations have to continuously deal with the different type of stakeholders…
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Component 1 Businesses while looking to work in the society has to fulfil their obligations towards various sections of the society by identifying their roles and responsibilities. Irrespective of the organization or the nature of business or the size of business organizations have to continuosly deal with the different type of stakeholders and ensure that they are provided with their interest so that their interest can be protected and managed effectively in the organization. This paper presents the manner in which the different stakeholders of Tesco Limited are looked into and the manner in which their interest are protected so that the business is able to ensure effectiveness while managing the resources of the organization This brings to the fact that stakeholders are individual or groups of people who look towards a particular interest while dealing with the organization and it is the prime responsibility of the organization to ensure that the rights of the persons are protected and are managed effectively in the organization. There are various stakeholders that Tesco has to deal with and includes workers, employers, customers, insurers, researchers, society, government and environmental bodies that are associated with the business in some way or the other (Czinkota & Ronkainen, 2004). Tesco has to look towards ensuring that the interest of all the stakeholders is protected and a mechanism is developed which will help to manage them effectively. This is seen that the various stakeholders have different interest and role in the organization. Despite the different interest that the stakeholders have it is witnessed that they also have something in common. The foremost interest which every stakeholder looks towards is protecting the right and welfare of the entire person associated with the company. This will look towards ensuring that the entire stakeholders look towards getting what is due to them and will help in the creation of positive relations within the organization (Kramar, Bartram, Cieri, Noe, Hollenbeck, Gerhart and Wright, 2011). This will also require that the stakeholders of Tesco comply with the rules and regulations that have been laid as it will require a two way traffic to address their issues and ensure proper welfare programs for all. Some differences also exist in the interest of a particular stakeholder in comparison to another stakeholder. This makes it important to understand the interest of different stakeholders in the business. Workers have a huge role in ensuring that they are able to work towards the betterment of the company. Some of the interest of the workers is the freedom to participate or decline when something is perceived correct or wrong. The workers have interest in their pay structure, the benefits apart from the normal salary they are going to receive, job security, medical benefits, pensions, confidentiality of the information supplied about them to the company to name a few (Doole and Lowe, 2001). The workers thereby have interest in the organization pertaining to their benefit and long term future and association with the company. Employer also has certain interest in the business similarly like the employees and looks towards protecting their interest for the betterment of the business. The employer are seen to have interest pertaining to matter which are confiedential and should not be leaked to the competitors as it will have an effect on the business strategy. The employer have interest in the profits, the growth of the business, third party issues, and other related facts to the business which will help them to grow and stay ahead of competion and their competitors (Fletcher and Crawford, 2011). Another party which has interest in the working on the organization is the customers who look towards purchasing the product from the business. The customers have interest regarding the quality of the product that has been supplied; the price charged is correct by the company, the after sales services provided by the company, the different aspect of the customer satisfaction that has been looked into and other ways which will help to improve the overall customer services. The customer thereby looks at different options and strategies which will help them to ensure better satisfaction and improve the overall working environment. The other stakeholder which has a huge interest in the working of the business is the government bodies. The government bodies have different interest in the working of the business and looks towards that the business pays the duties and taxes on time, complies with the regulations, conducts their business in the correct prescribed manner, ensures correct pricing, and doesn’t gets involve into any act which can go against the business practices. Thus, the government on a whole has interest in the manner the business looks towards conducting their daily business and practices to ensure better working. Another important stakeholder that has interest in the working of Tesco is the society. The society has interest in the contribution of the business towards the environment, the steps taken by the business to protect the larger section of the society and other similar steps which will ensure that the interest of a larger section of the population is protected and preserved. The different stakeholders have different interest which the management has to look towards protecting. This can be achieved by ensuring that the management looks towards making rules and strategies which looks towards protecting the interest of the larger section of the society and is aimed at improving the overall working strategy for the business. To ensure effectiveness it is essential that the business looks towards having strategies where they ensure that the interest of all the parties is achieved. This can be achieved by looking towards ensuring that all the parties comprises some of the aspect and looks towards attaining some other interest. This will ensure that the interest of all the parties are protected to a large extent and will help to ensure that the strategy of the business ensures better protection of interest for all. Thus, the business has to look towards protecting the interest of the different stakeholders so that the interest of the parties is protected. This will require that the business looks towards having a strategy where the business compromises on certain aspect and looks towards working on the others so that the interest of all the parties can be protected. Component 2 Introduction Vodafone Group Plc is a British Company being listed in the London Stock Exchange started business in 1991 and has over 439 million subscribers which have helped the business to grow their business and ensure that they are able to perform better and provide better services to the customers. Vodafone looks towards providing customers with telecom services which has looked towards providing proper services so that customers remain loyal and the business is able to yield effectiveness. This thereby looks to present the manner in which Vodafone has been able to grow and the strategy adopted by the company. While looking to dwell on the aspect of growth emphasis has been laid to understand the manner in which the resources have been managed and further findings related to the financials have been identified so that the manner in which the business is progressing can be understood and better strategies regarding the future can be formulated. Current Strategy Vodafone presently has looked towards penetration by providing the telecom services at the most competitive rate and has looked towards increasing customer satisfaction by developing positive relationship in all direction. The company has looked towards a policy where they are able to penetrate the market and reach even to the far off customers. This strategy of the company has been their main weapon based on which the services have been provided. In addition to it Vodafone has further looked towards ensuring that they provide the customers’ with a bouquet of offerings at the most competitive rates. This has ensured that the service packages includes different features like mms services, free internet and similar other services to attract customers. Vodafone has looked towards a policy of increasing their penetration level as the company looks to offer various services to the customers at competitive rates and the rates are normally lower than offered by normal players in the market which has helped them increase their market share and ensure that they are able to grow. The strategy of the company has been to offer services to customers and looks towards eliminating the middle man by having exclusive stores which ensures that the services are directly provided to the customers (Coughlan, Stern & Ansary, 2006). In this regard the company has looked towards adopting a policy where they look towards improved training facilities to the employees, build brand awareness, and look towards transparency while dealing with customers. The company has looked towards following the same strategy and based on this fundamentals has opened stores over different regions which has helped to ensure that the unique proposition strategy adopted by the company provides the required return the business is aiming at. Resource Management Vodafone while looking to ensure that their financial performance improves has laid special emphasis on ensuring that resources are used in the most efficient manner. Vodafone looking to achieving their goals has ensured that they look towards managing their resources in such a manner that the business is able to ensure proper mix of the resources and develop policies where the management is able to use the resources in the most effective manner. Vodafone has taken care of different resources which includes capital, human and financials (Bangs, 2002). On the capital front Vodafone has looked towards ensuring that the infrastructure to support the business is developed so that their capital investments can be used in the most positive manner and will help the organization to ensure positivity within the organization. For example, Vodafone has ensured proper ambience, lightning, seating arrangement and other equipments to be able to provide proper services to their customers. This makes it imperative that Vodafone manages their capital requirements so that the employees are able to provide quality services to its customers (Robin & Susan, 2003). While managing the human resource the management has to look towards hiring the correct talent. Efforts have been laid to ensure that the people hired are able to justify their jobs. This thereby increases the importance of hiring the correct people at the same time. Efforts have also be laid to ensure that all type of people like skilled, unskilled, casual, full time and part time employees are employed depending on the requirements of the business. For example Vodafone has ensured that there are computer operators, marketing personnel, after sales personnel and other who are skilled, unskilled, casual, full time and part time employees so that the business is able to provide proper services (Cateora, Mary & Graham, 2009). On the financial front the management has to look towards maintaining the financials in such a manner that the business doesn’t face a liquidity crunch. On this front the management has ensured that they manage their financial resources in such a manner that the business is able to recover its money from the daily business and also finance the business requirements (Ireland, Hoskisson and Hitt, 2007). For example, Vodafone has ensured that the cash inflows and outflows are maintained. This is an aspect of business which is of prime importance and the business has to look towards ensuring that the business is able to manage the resources in such a manner that the business is able to yield effective results. Thus, looking towards managing the human, financial and capital requirements will help Vodafone to develop strategies that help them to grow and ensure proper growth of the business. This will also help the business in ensuring that better policies can be formulated for growth. Performance Analysis The different performance indicator highlights that Vodafone has been able to build their business and develop their business based on their business strategy. The key performance indicator for Vodafone has been to offer services to customers and looks towards eliminating the middle man. The fact that the company has ensured that the requirements of the customer are understood and has developed their policies which ensures better customer satisfaction has thereby helped to ensure better opportunities of growth and has acted as a key performance indicator for the business This has been reflected in the financials of the company which has shown a steady growth. The financials of the company indicate that the business has been able to generate profits from their daily business operations (Antony, 2004). It is seen that Vodafone was able to make £6.957 billion in profits for the year 2012 when the total revenues for the company was £46.417 billion. This shows that the final profit earned on the revenue is 6.957/46.417 * 100 = 14.98% which is substantially high. This shows that the business has been able to manage their cost and curtail it so that the business is able to generate and sustain continuous profits. A look at the total asset base in 2012 is £139.57 which shows that the asset turnover rate for the business is 139.57 / 46.417 = 3 times. This shows efficiency in managing the assets. The same was highlighted in the resource management strategy which showed that the business was able to manage the resources in the most efficient manner. This shows that Vodafone has been able to manage their financials properly. A look at the manner in which the number of employees has grown that the employees’ base stands at 86,373 employees in 2012. The revenue collection rate from employees is thereby 46.617 billion / 86373 = £53971 which is substantially high. This shows that Vodafone has been able to convert the potential customers towards their final customers which have helped the sales per employee to be high. This shows that the strategy of the company to look towards penetration has also paid as the financials of the company depicts an opportunity through which they will be able to grow and improve their business so that more and more potential customers can be attracted towards the company. Conclusion Vodafone has thereby been able to build on the areas that will help them to render better services. The manner in which Vodafone has been able to yield efficiency is quite prevalent from the fact that the resources were used in the most efficient manner. This has helped them to ensure that their strategy of penetration also paid off. In addition to it the overall culmination and growth can be witnessed from the fact that the financials of the company has improved and overall the company has been able to perform well on all quarters. This has thereby ensured that the decisions taken by the management has been productive and has helped Vodafone to improve their performance. The decision making process for Vodafone is sound and the different parameters help to understand the manner in which the business has been able to improve its performance. Component 3 Introduction 123 LTD which is a cloth manufacturer is looking towards exploring the different destinations which can be used for improving their operations. Since, the operations have to be set in a different country having different currencies the fluctuations in the currency rate and changes in interest have to be considered so that a basic framework which will help to understand the most profitable destination can be understood. Analysis 123 Ltd need to analyze the different situations in which they can operate and based on the most profitable and efficient place should look towards selecting a place so that the business is able to gain and ensure better opportunities for business (Filbeck & Krueger, 2005). 123 Ltd has to incur the following cost irrespective of the place of work Cost of New Machinery = £340K Expected Life = 5 years Residual Value = £220K Depreciation per year = 340 – 220 / 5 = £24K per year Per year cost of machinery is there £24K irrespective of the place of work Conducting Business in USA Revenues = £700K Running Expenses = £210K Approval Fees = £22K Depreciation cost on machinery = £24K Total Profits = 700 – (210 + 22 + 24) = £444K Total profits in dollars = £444 * 2.10 =$932.4 Conducting Business in France Revenue = EURO 450K = 450 * 2.1 / 1.8 = $525K Running Expenses = £190 Approval Fees = £25K Royalty Fees = £25 Depreciation cost on machinery = £24K Total Cost = 190 + 25 + 25 + 24 = £264K = 264 * 2.1 = 554.4 Total loss = 554.4 – 525 = $29.4K Conducting Business in Switzerland Revenue = Swiss Franc 3800K = 3800 * 2.1 / 10 = $525K Running Expenses = £200 License Fees = £30K Inspection Cost = £70 / 3 = £23.33 Depreciation cost on machinery = £24K Total Cost = 200 + 30 + 23.33 + 24 = £277.33K = 277.33 * 2.1 = 582.393 Total loss = 554.4 – 525 = $57.393K Findings 123 Ltd is making different profits in different countries due to the difference in exchange rate. Further it has also ensured that the best place to work will be USA due to the high profits that the business is able to generate from the place. The other 2 places i.e. France & Switzerland are yielding losses which make it imperative that the company looks at USA as the most feasible destination. Recommendations It is seen that in the three different scenarios the business is able to show different results. 123 LTD in the above situation is able to make profits for the first year only in USA whereas the other destinations they are incurring losses. This makes it important that the company looks towards setting up the business USA as it will be able to grow its volume of business and also ensure that they are able to earn continuous profits which will help to support the business and ensure better opportunities of growth. On the overall basis 123 LTD has to look towards investing similar amount in machinery and the difference in the exchange rate is making the value of the currency fluctuate to such an extent that it will make it difficult for the company to be able to generate the same return. The fact that the spot rate for every currency is different it becomes imperative that the business looks towards reducing the risk of currency fluctuating through hedging and also looks towards a destination which will ensure that the business is able to earn proper revenues and grow. Limitations While conducting the analysis the situation for only the 1st year has been considered whereas the overall results could be different if the entire operation for a different time horizon is considered. References Antony, T. 2004. Thin Capitalization: Issues on the Gearing Ratio. Journal on Australian Taxation, 7 (1), 39-57 Bangs, D. 2002. The market planning guide: creating a plan to successfully market your business, product, or service, Sixth Illustrated edition, Kaplan Publishing Czinkota, M.R. & Ronkainen, I. A. 2004. International Marketing, 7th edn. South-WesternPublishing:Australia. Cateora, P.R. & Mary, C. G. & Graham, J.L. 2009. International Marketing, 14th edn. Irwin: McGraw-Hill. Coughlan, A., Stern, W. & Adl Ansary, E. 2006. Marketing Channels, 7e, ISBN 9780131913462 ISBN 10:0131913468 , Pearson Education Doole, I., and Lowe, R. 2001. International Marketing Strategy. 3rd Edition, Bedford Row, London, Thomson Fletcher, R. and Crawford, H. 2011, International Marketing: An Asia-Pacific Perspective,PearsonAustralia. Filbeck, G., & Krueger, T. M. 2005. An analysis of working capital management results across industries. Mid-American Journal of Business, 20(2), 10-17. Ireland, R. D, Hoskisson, R. E, and Hitt, M. A, 2007. Competing for advantage, Cengage Learning Kramar, R., Bartram, T., De Cieri, H., Noe, R., Hollenbeck., J, Gerhart., B, and Wright, P. 2011. Human Resource Management: Strategy, People, Performance, McGraw Hill: Sydney. Robin & Susan, 2003. In search of Strategic Management Accounting. Social science Research Network, 14 (3), 29-37 Read More
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