Unit 1 Business

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Task 1 – Two Businesses on our doorstep
Describe the type of business, purpose and ownership of two contrasting businesses (P1)

ASDA- Type of business, purpose and ownership (P1)
Business Sector
Asda is a British supermarket chain that retails food, clothing, general merchandise, toys and financial services. It also has a mobile telephone network, (via the Vodafone Network), Asda Mobile. Its head office is at Asda House in Leeds, West Yorkshire. Asda became a subsidiary of the American retail giant Wal-Mart, the world’s largest retailer, in 1999, and is the UK's second largest chain by market share after Tesco.

Asda’s scale of operation is national as there are more than 500 Asda stores across the UK – some big, some huge and some small but perfectly formed. And although they vary in size, location and the range of products and facilities on offer, you’ll find the same low prices. Asda operates in the tertiary sector. The features of this sector include the final stage in the chain of production (a chain of production shows all the processes involved in creating a product from start to finish). The features of this sector are: it involves selling products and providing customers with services, is one of the most important industries in the UK and t is the biggest employer of people in the UK. It refers to the commercial services that support the production and distribution process, for example: insurance, transport, advertising, warehousing and other services such as teaching and health care. Therefore, the economic business sector that Asda operates within is the tertiary sector because they offer a service/products to the public.

The products and service that Asda offer are not free. Asda sell their services for profit. This therefore means that Asda operates within the private sector in business. The private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the government. By contrast, enterprises that are part of the state are part of the public sector; private, non-profit organizations are regarded as part of the voluntary sector

Purpose/s
The purpose of Asda is to become the best retailer in the UK; they are currently second, behind Tesco. The expansion of a business has had very satisfying results; Asda was formed in 1965 by a group of farmers from Yorkshire, over 40 years later, Asda now has around 500 stores, and is the second biggest retailer in the UK. As well as having a mission statement, ASDA has a statement of purpose. This helps stakeholders to understand why the business exists. ASDA's purpose is 'To make goods and services more affordable for everyone'.

Asda ownership type
Asda is a private limited company which is owned by Wal-Mart, it has been the largest subsidiary of the Wal-mart family of companies since 1999, before1999 Asda was actually a PLC (Public Limited Company). In 1999 Wal-Mart bought Asda for $10.8 billion, and they bought all the shares. Wal-Mart is largest retailer in the world, Wal-Mart is based in America, there goal was to expand the business, and so they hit the UK and bought over a very well-known company Asda. They distribute all their products from Wal-Mart in America to the Asda stores in the UK Wal-Mart is a PLC so there are some advantages and disadvantages:

Advantages
The main advantage for the shareholders is that the liability is limited; this means that if the business was unsuccessful then the shareholders will not be blamed. •As there is no limit to the amount of shareholders, the business will be able to make more and more profit. •Shares can be sold to anyone on the stock exchange

Disadvantages
The main disadvantage with a public limited company, is that there a lot of legal regulations required for forming a public limited company •The process of forming a public limited company is...
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