Merit 1 – Compare and Contrast Two Businesses

| McDonald’s is a food service retailer and aimed at making profit and its restaurants are owned and operated by local people worldwide. Its mission is becoming a leader in food sector and best customer service according to their needs. Their main product is food.

Tesco’s is a private company which is owned by directors and shareholders who fund the business and the sole purpose is to make money. Tesco’s main purpose is to sell and make profit on products they sell such as food and online service. Tesco’s will provide excellent customer service and make sure all customers come back which

The aims at Tesco PLC is to be a leading retail supermarket and that excellent quality services are provided whilst products such as food and clothes are of a low cost. By also having cheaper prices than competitors such as ASDA. The objectives in doing this is to increase profits by increasing sales to the maximum. This is done by providing a better service of care so that the current customers stay and attracting more customers from the competitors such as ASDA. Therefore, profit will increase due to the cause of an increase in sales. This objective is measurable due to being Tesco PLC can keep track of the volume of sales. Another objective is to minimise the prices of products of food and clothes. Tesco PLC aim for householders to have a cheaper trip by Tesco PLC offering more deals so then customers can take advantage of, so their shopping will be cheaper. Furthermore, this aim can be achieved. An extra objective is to sell more healthier food related products so that more customers will be attracted of whom are interested in a healthier lifestyle. Also, the objective of developing an online site so this will attract more customers and increase in profit due to people who may not have the time to physically go to Tesco PLC will be to shop some way. As online shopping is more convenient for some customers. Final objective for this

1. Franchisees gain numerous advantage when they purchase a franchise. First, while a franchisee may be opening a new store, it is part of an already established business and system. This means a franchisee has access to turnkey operations, allowing an increased speed to establishing and growing the business. Franchisees also get support for management and training activities, as well as financial assistance. Going hand in hand with this, a franchise already has an established brand name, quality of goods and service which have been standardized across the franchisor’s larger company, and national advertising programs from franchisors. Franchises also have large-volume, centralized buying power. A franchise has proven products, and

Product offerings by these contenders are similar as Tesco’s to a huge degree. This procedure helps Tesco to ensure its commercial center by expanding competition. A large portion of the contenders of the Tesco have an equivalent or a bigger market share in the store business. By industry investigators, Tesco PLC has a twenty nine per cent of shares the grocery store industry.

An advantage of being a public limited company is having limited liability because of only being responsible to amount invested into Tesco PLC. Another advantage of a public limited company is being able to liquidate. This is when shares are bought or sold to shareholders if on the stock exchange it’s quoted. An additional advantage of a public limited company is the share value as Tesco PLC’s value will be shown by the market capitalisation from being the share price being what it’s based on. An extra advantage of a public limited company is having better access to capital because of the existing and new investor are raising share capital.

A public limited company can cause many advantages and disadvantages for a business. An advantage of being a PLC is that it will give the company more of a prestigious profile. This could be easier to gain access to better suppliers or opportunities for the business. Another advantage of being a public limited company is Liquidity this means shareholders can buy and sell their shares.

Tesco is worldwide organisation which is well known in providing services to their customers, the organisation is been operating since the early 1924 providing services to consumers.

Tesco can be said to be a global leader in the UK retail business. It is one of the leading world retailers. The company started using the trading name TESCO in the 1920s and since the group has expanded in many ways venturing in different markets and with interest in different sectors. Over the years, Tesco has recorded growth which has been achieved through different strategies. There has been emphasis on the growth of Core UK business in order to expand internationally. This growth has allowed the company to position itself in food and non-food sectors based on retailing services. Over the years, the company has witnessed financial fortunes which have been reflected in its growing sales. Sales have risen from 31,726,280 from 2013 to 32,074,650 in 2014 (Kantar, 2014.) This has been achieved through growth strategies which have seen the company expand its retail outlets and at the same time enter into new markets with high growth potential using their famous ‘every little helps’ branding along the way. The ‘Every little helps’ branding helped Tesco’s attract 1.3 million new customers in the period from 1990-1995, and the campaign achieved good effects on staff morale, attracting quality marketers to join Tesco, directly affected the share price and allowed the brand to move into non-grocery sectors where brand credibility is a key requirement. Disadvantages….limitations etc

McDonald's marketing targets everyone in every age,gender,races and does not have a select audience. The company claims that their restaurants offer meals for youngsters, a serene place to relax with free wi-fi for adults, and a quick delicious breakfast for those in a hurry in the morning.

McDonalds is a fast food restaurant and its purpose is to provide the best and fastest customer service so in this way it will give the organisation a good reputation and help them to make more profit.

TESCO is top leading retailer in UK. It manages over a thousand supermarkets, hypermarkets, and convenience store in the United Kingdom, Ireland, central Europe, and Asia. TESCO started life in 1919 when Jack Cohen started surplus groceries from a stall in the East end of London. MR Cohen made profit of 1 from sales of 4 on his first day. TESCO brand first appear five years after in 1942 when he bought shipment of tea from a MR T. E Stockwell. From that time TESCO slowly improve in retail business and now they are take top position in UK retail business. Tesco aim is provide best products for their customer and make sure about customer requirements.

In fact, licensing and franchising has a similarity, which is both of them offer company to earn monthly profits but obviously it still depended on how you managed and operated your business (Gerhardt, S, Hazen, S, Lewis, S & Hall, R 2015, p. 8). Licensing is like giving the rights to someone to produce a product or using its brand name, however, franchising is like open a branch by using its brand name or business model (William, C 2014). Actually the business which operated by licensing method usually can consider as a cheaper choice than the franchising business (Gerhardt, S, Hazen, S, Lewis, S & Hall, R 2015, p. 8). So the advantage of licensing obviously is the less production cost. For example, Coca- Cola Company, the world’s largest company, However, the disadvantage by using licensing method to operate a business is the licensor may lose their power to control what and how their licensee doing their business in different countries (William, C 2014). For example, Calvin Klein, the major downside of Calvin Klein is the increasingly confuse brand architecture. A multitude of product at different price left consumers unsure of the positioning of the brand. Therefore, Calvin Klein’s licensees ignored their original agreements with the

It has been seen as the most widely utilised mode of entry towards rapid international expansion and is primarily employed by fast food chains such as KFC, Wendy’s, Kenny Rogers, A & W and McDonald’s among others followed by consumer service businesses such as hotel chains and car rental, agencies such as Avis and Hertz. Franchises are basically ongoing business relationships which involves 2 components (the franchisor and the franchisee). The franchisor (the owners of the business format) issues a licence through an agreement which allows the franchisee the right or privilege to distribute the goods and services that represents the franchisor’s brand and business system for an agreed sum (royalty or fee) (Doole & Lowe, 2008). In other words, franchising allows the rapid growth or market expansion using a proven business format (intellectual property of the franchisor) it also allows the assistance in the form of capital as well as the fervour of a group of network operators that enhance the market positioning of the franchisee which would not be possible for a new business without huge capitals (Dugan, 1998).

According to me a franchising is an arrangement in which one party the franchisor allow another party the franchisee the right to use its trademark, company’s name as well as certain business systems and processes, to produce and market a good or services according to certain condition.The franchisee pays one time franchisee, royalty and profits.It helps franchisor to expand his business. Assistances provided to franchisee by franchiser are Marketing, management, advertising, store design, standards specifications etc.