Types of Business Organisation and Ownership

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Type of business, purpose and ownership (P1)

To run a business smoothly or effectively all business have aims or purpose, this could be survivor, to grow, to become a market leader. A business also aims to provide exception service or to create a reputation as the best on market.

Types of business

To understand how business works and what they set out to achieve, it’s necessary to have an understanding of the main types of business sectors which exists within a business organisation.

There are three main types of organisation in this country: public sector and two types of private sector organisations.

* Public sector
Public sector organisations are run by the government for the people. Examples are government departments such as the Luton borough council which owned by the government.

* Private sector
Organisation is made up of:
* For profit
* Not-for-profit

Types of ownerships
Business aiming for profit
The main types of business in the profit sector are:
* Sole traders
* Partnerships
* Private limited company (PLC)
* Public limited company
* Co-operatives
* Charities or none-profit makers
* franchises

Purpose of a business
* The basic purpose of any business is to increase their chances of making profits. * A business will use source of information to build a comprehensive well through-out business plan that helps reaching its goals. * The purpose of a business is to develop a business plan which helps thinking through some important issues that may not have considered yet. Having purpose of any business usually helps creating a focused business environment. Business will be maintained according to its purposes. To have an understanding of a profit making business and a none-profit making business, there are couple of business examples bellow:


Asda is a one of the biggest British supermarket which retails food, electronics, clothing, toys and general merchandise in the UK. It also provides tariff guaranteed mobile service. Asda has also introduced their financial service which almost covers all sorts of insurances such as travel, car, home, pet and life insurance. With Asda’s lowest price guarantee they have simply become the UK’s lowest prices supermarket.

Type, purpose and ownership of Asda
* Asda is the UKs second largest private limited company owned by wall-Mart stores with almost 400stores and plans for many more. At Asda saving money and keeping costs low is part of their culture. Saving the customer money every day isn’t a marketing slogan but the single-minded focus of everyone at Asda. * When they were asked what it is that they do differently from other retailers – what it is that gives them the ability to keep costs low and pass that on to customers in lower price. Asda don’t point to a handful of major initiatives. Asda talks about everything they do – all of the little things that when added together make a big difference * Today Asda aim to lead the way in everything they do from always offering lower prices to the millions of people who shop at Asda week in, week out, to their corporate responsibility in protecting the environment.

Market share and importance
* Asda is owned by Wal-Mart Stores which is now the biggest company in the world by value. * ASDA is the second biggest supermarket in the UK with 17% of the market share this includes sales of non-food items. * The company overtook Sainsbury’s in July 2003

* They still have long way to overtake Tesco's which has almost strong 28% market share.
Mission Statement
Asda’s mission statement is: To be Britain’s best value retailer exceeding customer needs every day. This is backed by their Purpose: To save everyone money, everyday. Who are the competitors?

The biggest competitor for Asda PLC is Tesco as both of these companies claimed to be the most...
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