Investigating business

This unit centres on the business activities for various well known companies. Using secondary data (a booklet), I will be investigating the activities that are carried out in two well known businesses and also discussing in details how these activities are carried out to help the business function properly. I also intend to look into the ownership structure of the business, the various locations, how they were picked and why. These are just a few aspects that I will be investigating. Please proceed to the next paragraph to learn about my findings.

The first business I have chosen to talk about is Richer Sounds a retail business (secondary sector) that specialises in selling electronics like Hi-Fi separates, home cinema equipments, plasma, and LCD screen TVs, DVDs and MP3 players, Amplifiers, Speakers, DJ gear and other types of related accessories. However, the business has attempted to diversify – selling telephones, musical equipments and even videos but decided to stick to what they are good at as it was unsuccessful.

The first Richer Sounds store was opened at the London Bridge walk in 1978 because Julian Richer was working in London and heard about a small shop unit which was coming to market. The second store was opened in north because customers in Manchester were driving all the way to the London store. Therefore opening a store in the north-west was a sensible idea. The location chosen was Stockport as it was the most accessible location.

Although other shops were viewed, nothing seemed suitable until a freehold property was noticed on a tiny street near the station and it was cheap. The store was a great success and it wasn't long before one was opened in Birmingham and then Bristol. Today, there are 41 stores in England, 2 stores in Scotland-Glasgow & Edinburgh, 1 in Wales-Cardiff and 1 franchise in Northern Island-Belfast. Their shops are picked using 2 principles which are: – There must be sufficient potential customers for the store to be profitable; the store must not be too near to another Richer Sounds store otherwise they will simply share out customers rather than gain new ones. The business is wary of expanding too fast as it has been disastrous for many companies and they have learned from the past when they grew from 4 stores to 16 in 18 months. They had financial problems and had to cut down to 11 stores.

The business now prefers to follow a year of expansion with a year of consolidation. When they focus on improving what they have rather than having more. They also research potential locations carefully by estimating the expected income from a new store very accurately from the population size in the area. If the calculation shows that the project would be viable, they will not go ahead with opening the new store. Due to the fact that Richer Sounds like to save as much money as they can when opening a new store, they don't pick large, fancy stores in very expensive shopping centres but instead they pick stores that has a nearby parking and are easily visible and preferably in a student area. However, if a store is less successful that they expect, they know it is due to the location so they take actions that would help like moving to another store.

Richer Sounds became a limited company in 1978 and was then incorporated on 29 November but has become an unlisted public company since 1990. This means that it does not have shares on sale in the stock exchange book. Also the company has a limit to the amount of money the owners are responsible for business debt and the most the owner can owe is the amount they invest in the business.

The organisation decides to become a limited company so that it could enjoy the benefits of limited liability which includes the owner of the business not being personally liable for any debt the business gets into. The organisation then chose to be an unlisted public company so as to increase their status in the eyes of their suppliers. As a public limited company, they produce detailed accounts that are independently audited and these can be used to prove financial standing to new suppliers. When a company obtains a stock exchange listing, they get additional capital but also lose some control of the company to their new shareholders. However this company does not need to obtain extra capital so they find selling their share irrelevant and also get the benefit of keeping full control over the business. 

A business aim is defined as a long term goal of a business while a business objective is the short term goal the business hopes to achieve. Richer Sounds have a mission Statement which is: to provide second to none service and value for money for their customers, to provide themselves with secure well paid jobs working in a stimulating and equal opportunities environment, and to be profitable to ensure their long term growth and survival; which helps to ensure that everyone in the organisation is working to achieve the same aims.

To ensure that all employees understand the aims of this business, the following thing are stressed on at induction: the first aim is crucial as it is the whole reason why the business exists, the company prides themselves on paying salaries that are generous in relation to the job being done and effort put into it and being able to provide an equal opportunity working environment for all staffs – therefore employees get benefits and bonus schemes on offer also the business cannot survive without profit which is why the main aim of the business is to make profit. These aims are achieved by the business by reviewing and changing their product line so that customers always get value for their money. The organisation has also come up with a suggestion scheme where every staff has a pad to put down their suggestions which is then read by the chairman, Julian Richer.

However their objectives which they hope to achieve over the next 12 months are to 'keep the fun' & continue to reward staff for their hard work so as to keep them motivated at work, and others vary each year depending on external influences and suggestions that have been made & other developments. The organisation present goals are to: consolidate the business and improve the profitability, develop the audiovisual home cinema range, keep the business fun, keep the level of excellence of customer service above 90% for the company as a whole, and to control the costs through the cost control group to keep these to budget levels.