Purpose_of_Different_Business_Organisation,_Their_Ownership,_Size_and_Scale.

LOCAL – LEICESTER COLLEGE • What do they do' Leicester College is one of the largest colleges in the United Kingdom and is a major provider of further education to young people, adults and employees in Leicestershire, it has a reputation for excellence both locally and nationally. They offer a huge selection of courses and qualifications in various subjects. The College not only has been awarded Founder College status of the National Skills Academy for Creative and Cultural Skills but also is an Associate College of De Montfort University as well as part of Leicester University’s College and University Liaison Network. • What industry are they in' Leicester College is an example of tertiary type of business. They provide service, having on offer many courses from entry level to University Degree with an emphasis on vocational learning as well as academic achievements. As well as offering education, Leicester college also provides wide range of student, staff and members of the public services, like ‘hospitality and catering’, ‘hair and beauty therapy salon’ or ‘travel shop’. The college facilities include as well day nursery, sports hall and library. • Is their business for profit or non-profit' Leicester College is a state undertaking with an annual budget of £51 m. Although some people pay for their courses, the business is generally financed by the government from the taxpayers money. It is as well worth mentioning, all the special materials or books for the learners are provided at cost – the amount charged is just enough to recover the cost of providing goods or service without making a profit. • Ownership As I mentioned before, Leicester College is an example of a state undertaking, within a public Sector. It is being controlled by the trustee – in this case a Principal Maggie Galliers, on behalf of the government. A public body dealing specifically with this kind of business is the Department for education, overseen by the Minister - Rt Hon Michael Gove MP, who each year bid for money from the Treasury. • Size and scale Although Leicester College is a local business based in Leicester , we classify it as large in size because employs 1600members of staff, which is unusual for this type of an organisation. At the same time it is quite difficult to decide about the scale of the College. As a local business, having just three branches, they manage to provide service to 26000 students, what makes their scale large compare to the corner shop for example. In the other hand however, if we look at the global business like Coca-Cola, with hundreds branches around the world and multibillion dollar turnover, Leicester College is operating on a small scale. NATIONAL – FAT CAT • What do they do' The Fat Cat Group is a chain of 13 café bars across the UK. The first Fat Cat café bar opened in 1992 in Bangor, North Wales. Since then the company has opened further sites in London, Midlands, Wales and the North West. The Fat Cat Group has been at the forefront of change in the pub industry in the last decade. Over the years it has gained recognition for the quality of its service, food and drink. Being nominated in many categories from best design to best value for money Fat Cat has made its mark not only in the Industry sector, but in the public eye. • What industry are they in' Being a part of café bar and pub sector, Fat cat represents tertiary type of business. The Group is constantly innovating in order to satisfy increasingly sophisticated customer demands for food, drink and the atmosphere in which to enjoy it. Within this competitive environment Fat Cat remains at the forefront of café bar culture by offering the quality of products and brands, level of service and atmosphere that customers continue to demand. • Is their business for profit or non-profit' The Fat Cat Group is a part of Private Sector - where business is owned by individuals who aim to make profit. Even the first café bar opened in Bangor made a profit in the first year – it was down to the fact that the owners were working in the business for nothing, which allowed them to go and open the second unit within 12 months and another one soon after that. All 13 branches have £20 m turnover and generate around £5 m annual profit altogether. • Ownership The Fat Cat Group is a private limited company which is a part of privately owned type of business. Each owner has a share of the company and is therefore known as a shareholder. In this case as well as being shareholders, they are also directors and run the business. The big benefit of private limited company is a limited liability. As such shareholders’ personal possessions remain safe if the company has to close as they are only liable for the amount they have invested in the business. • Size and scale Both last year’s annual turnover (£20m) and number of employees (around 200) suggest The Group is a medium-sized firm. Although they are based in derby, they are operating on a national scale as they have 13 branches across the UK. Operating on a bigger scale gives business certain advantages, known as economies of scale. So, although the overall cost of running is higher compare to smaller firm, they can produce or sell at lower unit price, as well negotiate lower prices when buying goods from manufacturers. Operating on a national scale however requires more investment in equipment, staff and other resources. A product may have to be adapted for a different market and advertising costs money. Therefore spending large sums on expansions can endanger the whole business if the scheme is unsuccessful, especially in this case, when the company shares are not available for the public to buy, so the organisation cannot get finances in this way. MULTINATIONAL – PRIMARK STORES • What do they do' Primark is a large clothing retailer from Ireland. It is known for selling cheap clothes and household goods. The company’s success is based on sourcing supply on a low cost, making clothes with simple design and fabrics, only in the most popular sizes and not advertising. First store opened in June 1978 in Dublin and another four were added within a year. Since then they have managed to open branches all over the Europe. • What industry are they in' The company provides service to individuals, which makes it a tertiary type of business, known as well as a service sector. However they have got their own brand names, produced specifically for them, like Atmosphere, Cedarwood State, Early days, Primark home, therefore it suggests Primark belongs to both tertiary and secondary type of business. • Is their business for profit or non-profit' Because Primark belongs to a Private Sector, we can classify it as with aim to make a profit. We can see clearly that the company like this, operating on a large scale, takes an advantage of a lower cost unit what makes it so popular amongst people and is extremely difficult for smaller firms to compete with it. • Ownership The Primark Stores is a private limited company. As I described this type of an organisation before, shares are not available to the public and the owners are the only shareholders. What is interesting however, Primark is a subsidiary type of business. The main difference between a branch and a subsidiary is that a branch is not a legal corporate entity separate from the foreign company, whereas a subsidiary is considered as so. A branch is simply an extension of the parent company (in this case – Associated British Foods plc) and does not have its own stock or its own board of directors. The subsidiary must hold shareholders meetings and observe other corporate formalities. Usually the subsidiary will be owned and controlled by the parent company. • Size and scale The Primark is definitely classified as a large-sized company with 27500 employers and 204 stores generating £1.9 bn turnover last year only. They operate on multinational scale as they have stores in Ireland, UK, Netherlands, Germany, Spain, Portugal and Belgium. Whilst the company’s main headquarters are based in Ireland, the chain is a subsidiary of Associated British Foods plc, and is ultimately controlled by the Weston family through Wittington Investments. GLOBAL – IKEA • What do they do' IKEA is a Swedish corporation that designs and sells functional home furnishing products, including furniture, appliances and accessories. The company is at the moment the world’s largest furniture retailer. A concept of IKEA is to offer a range of home furnishing products at low prices so they are affordable to as many people as possible. The company was founded in 1953 by Ingvar Kamprad, named as an acronym of the founder’s name, the farm he grew up (Elmtaryd), and his home parish (Agunnaryd) initials. • What industry are they in' IKEA represents both secondary and tertiary sector once again as the company is not only selling the furniture, but designing and manufacturing most of them as well. Surprisingly however, comparatively little production actually takes place in Sweden. They are largely manufactured in developing countries to keep the cost down. They have got various ranges to suit all kind of customers, with 12000 pieces. Many stores include as well restaurants, food markets and children play areas. • Is their business for profit or non-profit' The groups of companies that form IKEA are all controlled by INGKA Holding B.V., a Dutch corporation, which in turn is controlled by a tax-exempt, not-for-profit Dutch foundation. Therefore despite IKEA being clearly for profit type of business, it does not pay taxes as being controlled by INGKA Foundation. The foundation’s non-profit status also means that the Kamprad family cannot reap these profits directly but the Kamprads do collect a portion of IKEA sales profits through the franchising relationship between INGKA Holding and Inter IKEA Systems. The Berne Declaration, a non-profit Swiss organisation promoting corporate responsibility has formally criticized IKEA for its tax avoidance strategies. • Ownership Despite its Swedish roots, IKEA is owned and operated by mix of not-for-profit and for profit corporations. its structure is divided into two main parts: operations and franchising. Most of IKEA’s operations including the management of the majority of its stores, the design and manufacture of its furniture and purchasing and supply functions are overseen by INGKA Holdings, a private, for profit Dutch company. 235 stores in 36 countries are run by them. The remaining 30 stores are run by franchisees outside of the INGKA Holding. INGKA Holding is wholly owned by the INGKA Foundation – tax-exempt, not-for-profit foundation. It is controlled by a five-member executive committee that is chaired by Kamprad and includes his wife and attorney. The IKEA trademark however is owned by separate Dutch company, Inter IKEA Systems. Every IKEA store pays a franchise fee of 3% of the revenue to Inter IKEA Systems, owned by Inter IKEA Holding, believed to belong to Kamprad family as well. Naturally all of them are private limited companies, so shareholders do not risk their personal possessions. • Size and scale As of may 2010 chain had 313 stores in 37 countries, most of them in Europe, North America, Asia and Australia. We can clearly see that this large Sweden-based business is working on a global scale with hundreds of stores all over the world with the total number of employees exceeding 127000. The IKEA Group itself owns 276 stores in 36 countries and the other 37 stores are owned and run by franchisees. Over 660m people visited IKEA stores in 2009 only, generating head-spinning annual turnover of £22bn, of which £2.5 bn was their net income.