Merit 1 – Compare and Contrast Two Businesses

750 Words3 Pages
Merit 1 – Compare and Contrast two businesses

For this assignment I am going to compare and contrast two selected businesses.
I will concentrate on their ownership and their aims and objectives.

My first business is Tesco the biggest retail company in Britain. My second business is McDonald’s one of the largest franchise fast food outlets in the world.

The aim of McDonald’s is to serve good food in a friendly and fun environment and to provide good returns to their share holders. So the purpose of McDonald’s is to satisfy their customer with high quality of food, quick service and value for money.

The purpose of Tesco is to sell every day necessities to the whole population such as food, clothes, electric goods such as well as
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A plc has more chance to become successfully. The company produce goods at lower unit cost and has bulk purchasing and cheaper borrowing.

Another advantage of a franchise is that you use a recognized business name and reputation also the franchise benefit from advertising or promoting. The franchise has to share all the profit with the franchisor while Tesco which is a public limited company have to share their profit between a great numbers of people. Shares can be advertised and sold through the stock exchange. Another advantage of a public limited company it has more chance to become successful because they have thousand people who working for it, with many skills, idea and experiences. Franchisee is different from a public limited company has it is dependent on the franchisor skills. If the franchisor goes out of business or gets a bad reputation, this will cause problems in the business.

One of the key similarities between these two types of ownership is liability. The franchise and public limited company have limited liability. This means protections of their shareholder from losing their personal finances if the company goes bankrupt. If the company fail they only lose their invested money in the business. If business wants to become a limited liability can it be complicated and expensive to set the business, decisions can take longer and it takes a lot of legal requirements.

McDonald’s is a large company because it is run as a franchise so
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