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Comparisons between Safeway plc and other retailers Essay

Safeway have achieved the sales growth, thought focusing on their vision of their business, where they quote, “our vision is to be the first choice food retailer. We are passionate about the way we deliver great value, best fresh food, customer care and availability. ” They go through this by also focusing directly on their business objectives, such “Best at freshness, best at availability”, where by offering remarkable fresh foods, with high quality products, sold in a much more exciting way to their customer, to being them back.

Therefore will increase sales. Their would derive at this by introducing their ‘Best Deals Ever’- deep cuts in the point of selected, high volume lines, backed by strong point of sale and a big investment in extra stock so that their supply chain could support extra sales. Safeway believe that in building sustainable advantage over their competitor and gain sales can only be done through ‘Safeway people’. They quote, “our vision is to be a company where everyone feels they can do something personally to bring in more clients and create more sales”.

This is because; they are creating a business culture in which their people are passionate about their product, their stores and

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everything they do, leading them to have an unbreakable will to compete. Safeway’s other objective to help increase sales “… is to achieve a mutually profitable relationship with our suppliers”, Meaning they collaborate with them on the development of new ideas in product development and supply chain operations. As we have previously stated as one of many Safeway’s objectives, we believe that building sustainable advantage over our competitor can only have done through Safeway’s people.

We are creating a business culture in which our people are passionate about our products, our stores and every ting we do, have an unbreakable will to compete. ” Therefore this leading them to gain skills, knowledge and resources to do their best, everyday. Safeway also provides a school to drive for passion in their business; their staff can come and learn how to prepare fresh food from experts. Safeway encourages staff to have more freedom to use their initiative and better trained, by appointing an operation board director whose sole responsibility is the creation of a more open, involving and communicative company.

They have also introduced a new employee bonus scheme, which will also mean that they will be better rewarded. Encouraging employees to work efficient and skillful. As my research has gone so far, looking at all information gather on safe ways objectives, I believe that Safeway has successfully met all their objective, because as seen from their Annual Report and their profit and loss account, they have gain and loss over some period of time. Such as losing share and despite that, also gaining sales, so as with profit, and also as a result of the exceptional changes that have occurred.

Looking at the Consensus Estimates for 2004 earnings per share would be 21. 29 and 2005 would be 22. 20. I believe that, if they continue to follow this strategy, their business will be in continues progress. Comparing Safeway with other grocery retailer in the UK i. e. measured by reported turnover, Safeway is the fourth largest grocery retailer in the UK, comparing with Tosco which is the largest of all grocery retailer in the UK with over 779 stores (including a number of small stores recently acquired from T&S stores) with an averages sales area 2,800 sq meters.

Tesco has operations in ten countries across Europe (including the UK) and Asia, producing worldwide group turnover of over i?? 26 billion in its mostly recently reported year. The UK remains Tosco’s core market, however, accounting for 82 per cent of its total turnover and 86 per cent of its underlying operation profits. Total UK turnover in the year to end-February 2003 was i?? 21. 6 billion and UK operating profit nearly i?? 1. 3 billion. Over the past five years, Tesco’s UK turnover has increased by 44 percent and UK operating profit by 48 per cent.

Therefore comparing Safeway’s profits (refer 1: Ownership of Business), Safeway has not really done that well over the last year, meaning they are not meeting their objectives successfully. Similarly, comparing Safeway with Sainsbury that is, Sainsbury being the UK’s second largest retailer, measured on the basis of reported turnover. It has 498 stores in the UK, with an average sales area of about 2,800 sq metres. However, while Asda and Morrisons have mostly stores over 1,400 sq meters in size, Sainsbury’s has a more varied store portfolio with many smaller stores as well.

Its UK businesses include property development and banking services. Sainsbury’s also operates overseas. Sainsbury’s UK turnover in the five years to March 2003 increased by 23 per cent, from i?? 11. 6 billion to i?? 14. 3 billion. However, comparing Safeway with Morrisons i. e. Morrisons being the sixth largest retailer in the UK (after Asda, Sainsbury’s, Tesco, Safeway and Somerfield plc (Somerfield)), measured by reported turnover. Its stores are concentrated very largely in the North of England and across Yorkshire and the Midlands.

It had 119 stores in January 2003, with an average store size of about 3,300 sq metres. Morrisons is unusual among the larger UK grocery retailers in that some of its operations, involving the buying and packing of fruit and vegetables, the manufacture and supply of some fresh food products and the processing and supply of some fresh meat products, are vertically integrated.

Morrisons’ turnover in the five years to January 2003 increased by 87 per cent, from 4. 3 billion, and operating profit by 76 per cent, from 149 million to  263 million, over the period. Therefore comparing these to grocery retailers, Safeway is doing much better that Morrisons, meaning that they are meeting their objectives and also as of resent (as mentioned in pervious page), there has been a merger between Safeway and Morrisons, therefore, helping to increase their profits and sales. 3: Functional Areas within the Business Every organisation has various functional areas of their business and these organisations require various resources to carry out their functions.

These resources used by the business and the functions comprise the business activity. These resources are also referred to as the factors of production used by the business, such as; Capital – this is the tool to make manufactured product, such as machinery, vehicles and office equipment used by the business to produce other products.

Labour – the amount of effort put in by the employees of the business and how they carry out their various job tasks, using different forms such as communication, information, decision making e. t. c, and how it helps them meet the benefits of the business, considering if they are satisfied with their various positions. Land – this refers to the areas at which the business is located and is the location consists of the materials and resources need for the production of the business. Businesses comprising of these factors of production need functions to carry them out, to contribute to the efficient running of the business. Therefore the functions are then divided on to functional areas, including;

Finance department Human Resources department Production department Marketing department Administration department Safeway being a plc has different functional areas of their business and using the factors of production to guide the functions of the business such as, converting inputs; money, office equipment, people into output. For example, the people who work in Safeway’s stores are central to the delivery of their business goals.

It is the skills, flair and enthusiasm of their people that ensure success to the business. This is the investment they are making in the training and development, because making staff more knowledgeable about the product offering ensures a high degree of customer satisfaction. This will refer to the labour aspect odd the factors of production. Safeway relies on the efficiency of their functional areas to be carried out successfully by meeting their business strategy, aims and objectives

For them to achieve their best Alternatively, Safeway is a large and complex business and a key theme of the organisation is communication both up and down the organisation as well as between functions. Safeway’s main business is to operate 460 stores and supermarkets in the Retail Food sector and considering that they are increasing the number of people working for then, more socialized people are required for the different functional areas of the business.

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