Development of business Essay
All businesses regardless how big or small must set themselves aims and objectives. Without them, the business may go bankrupt in a very short period of time. Tesco have been setting themselves objectives for many many years, which is why they are the no. 1 retailer for groceries. An aim is generally known as expressing what a business sets out to do in the long term. An objective is a goal that the business hopes to achieve. People often get these terms confused with each other. Objectives are given great consideration and are set between everyone involved within Tesco.
Individual targets are agreed which will ensure a contribution to the overall success of the organisational targets. The objectives must be specific which appears to be a slight problem with the objectives Tesco have set themselves. On the Tesco website it is not clear as to what exactly they are trying to achieve. Tesco would have to think what their objectives mean for a particular area or person within their business. Tesco would have to consider what outcome they want to get from these objectives and whether their view on the hopeful outcome is realistic.
Tesco would have to look at their profit
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Tesco exist to provide goods and services. Tesco must make or provide products which will satisfy customer needs or wants. Tesco have many aims and objectives other than the original sole objective of making a profit and surviving. The objectives Tesco set themselves should be set with a way of showing how long the objective should be achieved by, (months, years, etc). Tesco also have to set themselves milestones which they will aim for along the way. Progress should always be reviewed or analyzed whilst the objective is taking place.
Objectives are very important to Tesco as they can be very helpful to fulfil theaims that Tesco have. These objectives show what Tesco is trying to achieve. They help decision-making and choosing strategies that Tesco are working upon. They can be used to check the progress of Tesco and helps decide what Tesco are to do next. It is a way of measuring the performance of Tesco and action which can be done to take control. Objectives provide a focus for individuals and can be broken down to provide targets for each area of the business. They are also used to analyze the performance of employees as well as the entire business. The objectives that
Tesco set themselves must be realistic and they will be set depending on which sector the business operates. Tesco like all businesses have the main objective of making a profit. This objective is extremely important to a business like Tesco as without it they will be unable to do things they want to do. Employees would become unhappy as they would not be able to get the income and pay rises they would like. If the employees were to become unhappy with their work tasks, pay and even the working environment, this would reflect onto the customers making the customers feel
like they should shop somewhere else. Shareholders may also feel unhappy as a result because they will lose the value of their share and invest their money into a business which be doing better or a new business which is making a good name for themselves. It is clear that Tesco are increasing in the market. By researching the Tesco website I have found that in the last five years Tesco have been gradually increasing their group sales. In 1999 the annual sales were 18,546 million.
For the next couple of years that total rose each year by around2 million. However sales of 25,654 million dramatically rose to last year total of 28,613. For Tesco, a big objective would be beating their competition such as Sainsbury’s as every supermarket is looking to beat each other to gain customers therefore make more profit. This means that increasing sales and market share is extremely important. This is because having the biggest share of the market is means receiving the biggest share of the profits. One way Tesco have tried to achieve this is by creating more products as they will benefit from the cost savings from producing their own materials rather than being supplied from Heinz etc.
Having a larger market share means more profit so this will ensure Tesco have more money available to put back into improving their goods and services and keeping employees happy by giving them the promotion or wage they require. By Tesco becoming a Market Leader, this increases customer confidence and would persuade them to buy from Tesco rather than Marks and Spencer or Sainsbury’s. The objectives mentioned above are used by most businesses. However Tesco have a wide variety of main objectives. These are listed and explained below.