Understanding the different types of business activity and ownership

Topics: Corporation, Limited company, Tesco Pages: 1 (366 words) Published: June 25, 2014
Tesco was founded in 1919 by Jack Cohen. Their main office headquarters is located in Hertfordshire, United Kingdom. The Tesco brand first appeared in 1924 and the first store was opened in 1929 in Middlesex, where Jack Cohen introduced his business motto “pile it high and sell it cheap”R1.

Types of businesses can be divided into Local, National, International and Global. Tesco supermarket is an International business as it is the largest retailer in the UK and the fourth largest worldwideR2. The company is part of the private sector as it is owned by private individuals known as ‘shareholders’. Tesco is also part of Tertiary sector of business as it operates in the service industry. This is where business activity typically involves one person or an organisation providing a product or service that they supply to someone else, usually for payment. After further expansion of the business Tesco also moved into the primary sector where they grow their own crops for their products.

Tesco have stated there are several purposes of the business. Its main purpose is making a profit for the business and its shareholders, which is shared by all businesses in the private sector. Its other purpose is what they describe is to “create value for customers to earn their lifetime loyalty”R3. This is reiterated by their motto “pile it high, sell it cheap”.

Tesco is a public limited company (plc) that is owned by its shareholders and is run by a group of directors paid a salary to run the company. As a public limited company their shares are traded on the Stock Exchange where they are available to the public. This means that they can raise large amounts of money to expand or develop the business. Furthermore, being a public limited company means that their shareholders have limited liability. Investors can only lose the money they have invested and are not required to finance any outstanding debt of the company. This encourages people to invest in the company. However,...
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