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Business Organizations – Tesco

Types of Business Organizations

  1. Sole proprietorship

A sole proprietorship is a business organization that is owned and run by one person. The owner is personally accountable for everything in the company. This type of organization has no limited liability, and the owner takes all the benefits, duties, profits, and risks. It provides individual owners with substantial freedom and flexibility. They can run the business as they please, hire new employees, sell products for whatever price they want, and accept credit cards. Sole proprietorships are relatively easy to set up and operate under; this makes it an attractive option for people with great ideas who are comfortable managing everything independently. However, some disadvantages are associated with being self-employed; it can be challenging to find funding to start the business, and if an individual finds financing, it can be tough to repay it as quickly as possible due to lack of cash flow through their business.

  1. Partnerships

Partnerships are a particular form of business organization in which two or more persons agree to participate in business together in one form or another. Because they are organized through contracts rather than articles, the participants can make changes without consulting everyone. Partnerships have maximum flexibility and are relatively easy to form and dissolve. However, there are no legal means for dissolving or terminating a partnership contract except by unanimous agreement of all partners because no formalities are required for entering into partnerships (Hearn, 2017, pp 13). Partnerships have several advantages, including the fact that partners can provide start-up capital and expertise and dedicate their time to developing the business. The downside to partnerships is that in the event of disagreements and conflict, a person will not be protected by an act of law, such as, for example, in a corporation.

  1. Limited liability company (LLC)

A limited liability company (LLC) is a hybrid business entity, combining the advantage of the corporate structure with the flexibility of a partnership or sole proprietorship. An LLC can be formed as either a benefit corporation or structured as a limited partnership. Owners of an LLC are referred to as “members” and have limited liability for the debts and liabilities incurred by their LLC. Members may also contribute financially to their LLC, which gives them control over company funds. Each member has equal ownership rights and may vote on all issues related to their respective LLC affairs: A Limited Liability Company’s main advantage over other forms of businesses is that it offers its owners protection against any financial liabilities incurred by the business. Disadvantages include: expensive set-up costs, directors may have unlimited liability if they breach their duty, and there is less flexibility in corporate structure compared.

  1. Franchising

Franchising is a business model where the rights to an established business brand name and operating system are sold to individuals or groups in return for royalty payments. On the one hand, a franchisor provides the advantage of economies of scale by reducing fixed and administrative costs while offering professional management help to their franchisees. The franchisor also benefits from economies of scope as he can reach out to a broader market with his products and services. Disadvantages include; they all limit the liability of their owners and shareholders; they tend to be limited in size, and lastly, they focus on low-cost and high-capitalized activities.


Tesco is a pioneer in the UK grocery market and one of the largest food retailers. The company has grown over the years by adopting a mixed model organization, primarily based on its own branded store formats and franchising. Tesco has become one of the largest supermarket chains in the world by focusing on providing customers with everyday low prices for its goods in a wide variety of categories and products. The effectiveness of the organizational structure used by Tesco can be judged from several criteria such as its ability to develop new types of products and services, its flexibility and how well it copes with change, how easily decisions can be made, how good the communication within the company is and how effective the management is (Patricia, 2017, pp 75). Therefore, Tesco is to be a public limited company. The main reason for this is that there are many shareholders that are using their money to invest in the business, which means more people are managing the finances and business. So having one less person (meaning no single person is in control) means that a wide array of people will be able to contribute ideas and select how the money is being spent. In addition, all of these shareholders are also interested in seeing their investment grow, meaning they are motivated to ensure the company is successful.

Tesco’s business model is based on offering customers a wide range of products and services, including customers with specialist needs. Customers can buy groceries, which are also sold in small independents, but they can also purchase insurance or food from restaurants. The company also operates under several different names, such as Tesco Ireland, Tesco Express, and Tesco Pharmacies. This type of organization is suitable for the firm because it allows them to constantly innovate by bringing new merchandise, services, and technologies into their stores, often quickly before any competitor has found out about them. The company has many strengths, such as an excellent reputation; it is a successful company and brand; there are opportunities for progression within their ranks; good employee benefits such as training schemes and bonuses; a large variety of products available from cheap items to luxury goods at competitive prices; excellent customer service standards which ensure customer satisfaction; the company are innovative when it comes to identifying new trends and how best to meet their customers’ needs (such as selling groceries online rather than relying solely on retail).

Business objectives of Tesco

In today’s business world, there are no guarantees. Companies need to adapt their strategies to remain competitive and meet the needs of their customers. Tesco has various objectives. One of the business objectives is to improve the health of its customers; Tesco wants people to be healthy; therefore they have dedicated the area of a store where there are many healthy products such as vitamin supplements, fresh fruit, and vegetables, etc. They have certain criteria that they use to measure whether their food is healthy or not before it goes on sale in the store. They also try hard to make sure that their products are safe from being contaminated because this will lead to having unhealthy food advertised by them. The second one is to produce distinguished quality; Tesco has the capability to produce and deliver high quality products across a broad spectrum of customer needs at prices they can afford. They also have the ability to tailor their products, services and communications according to the needs of different population groups in line with local market conditions. Therefore, they want to produce superior quality that makes their products appear special as well as worthy for purchase thereby improving innovation. Also, Tesco wants to be most highly valued enterprise so as to increase its profitability since all these actions help them turn into the most valuable company so that everyone lives better (Patricia, 2017, pp 72). For example, they try to offer their customers a good shopping experience with low prices and good quality products so that the customers are satisfied with their shopping experience every time they enter these stores. This ensures that the employees will stay in happiness and motivation and it will also increase its market share.

The companies also take part in different environmental campaigns such as curbing greenhouse effect emissions to protect the environment at large. To improve lives means that Tesco tries to help people’s lives by supporting charities and make community better places. Also by creating a conducive environment at a workplace and encouraging good relationships with its employees which leads to high productivity. Thus, to improve flexibility of resources to all, Tesco aims to meet the customer’s needs as quickly and conveniently as possible through a wide range of products and services that are available in multiple formats including physical stores and digital outlets. The company strives to provide quality shopping experiences for every member of the family through their broad range of products and services, from everyday essentials such as food, to entertainment products like mobile phones. Their business strategy includes integrating the internet and e-commerce with its existing main stores, which means they can offer their customers more opportunities to browse around, shop and then buy online or over the phone than ever before.

Key concepts

TESCO’S goal is to be the leading international food retailer. It strives to achieve this aim by offering customers an ever-increasing range of high quality, value-for-money products combined with an excellent service. The company frequently reviews its business strategy – which encompasses its aims, mission, vision and values – in an attempt to stay ahead of competitors. Tesco’s mission statement is “We make what matters better, together (Tesco Mission Statement, 2022).” Tesco’s mission is a clear statement that everyone is equal in this company. Tesco’s aim focuses on sales, while their mission focuses on customers. They have developed numerous different brands such as Tesco Basics, Tesco Finest and Taste the Difference. To ensure that they meet their goals and customers’ needs, they employ many policies like ‘Tesco Money System’ (TM), where once a customer has money on their card, they are allowed to use cash machines or order goods over £500 online without paying for delivery charges.

The strategic and operational planning process involves the identification, documentation and assessment of a company’s strengths and weaknesses relative to its competitors. Tesco has defined vision and mission as part of its corporate strategy, promoting a clear growth strategy that enables it to achieve success in the long-term by focusing on growth, profitability and customer service. In addition, Tesco’s Strategic Management focuses on obtaining competitive advantage through cutting costs and lowering prices, which has contributed significantly to their overall success in the industry. Tesco has strengths in market share, brand awareness and financial standing. However it must improve its efficiency and productivity to maintain competitive advantage.

Tesco’s Corporate Governance and leadership are strong as the company’s CEO and executive directors are very active in this process. Tesco has a large team of professionals in Corporate Affairs Division who perform their duties from various locations in England. This team helps to plan growth, set targets and direction for companies operations going forward. It also helps to inform the public about Tesco’s operations by giving speeches at industry conferences, etc. The firm has been able to sustain its position as a market leader for decades with a strong corporate culture and continuous innovation. However, in recent years it has seen competition from Walmart and which have both been investing heavily in their businesses so that they can improve services and expand their reach.

The competitive advantage of Tesco is the ability to leverage its supply chain resources and product development skills, which are superior to those of many of its rivals. This strategy is highlighted by the supermarket giant’s ability to build its own fresh produce supply chains, as well as offer value-for-money low price shopping via an effective supply chain network. Great volumes of food sales are achieved by simply being cheaper than competitors. The supply chain gives Tesco a cost advantage that enables them to undercut prices and sell at low margins, whilst driving efficiency within their processes. Also, Tesco has implemented an intensive management development program that involves a combination of on-the-job training, coaching and mentoring. The company believes that management has the greatest potential for improvement, so if managers are given the right guidance, they will be responsive to change.

To conclude, Tesco Company has found success in market segments where it has been able to compete effectively with other retail chains and brands. Its mission statement is unique and the company believes that all of its activities are geared towards meeting the needs of its customers. The company’s strategy focuses on offering affordable products with a high quality. This allows them to be very competitive in their market segment, while at the same time, they can still be profitable because they offer their goods cheaper than their competitor’s.


Fatricia, R.S., 2017. STRATEGIC ANALYSIS OF TESCO SUPERMARKET. Jurnal Manajemen Terapan dan Keuangan6(2), pp.69-86.

Hearn, E.N.R., 2017. Business Entities. In The Musician’s Business & Legal Guide (pp. 10-17). Routledge.

Tesco Mission Statement 2022 | Tesco Mission & Vision Analysis. (2022, October 3). Mission Statement.


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