The Business and Financial Performance of an Oranganization over Three Years

Three Year Financial Performance Of Tesco Plc

Submitted by sikazwe on January 9, 2011

Category: Business and Economics

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AN EVALUATION OF THE BUSINESS AND FINANCIAL PERFORMANCE OF TESCO PLC BETWEEN 1ST MAY 2007 AND 30TH APRIL 2010

A RESEARCH AND ANALYSIS PROJECT FOR THE B.sc. (HONS) IN APPLIED ACCOUNTING

TABLE OF CONTENTS

PART A

1. Reasons for choosing the project topic

2. Project objectives and research questions

3. Research approach

PART 2 INFORMATION GATHERING AND BUSINESS AND ACCOUNTING TECHNIQUES

1. Sources of information used in the research report

2. Description of methods applied in collecting information

3. Limitations of my information gathering methods

4. Ethical issues encountered during the information gathering and how they were resolved

5. A description of accounting, business and other methodologies utilized and their limitations

PART 3 RESULTS, ANALYSIS, CONCLUSIONS AND RECOMMENDATIONS

A description of results obtained and the limitations thereof

1. Critical analysis and evaluation of results of significant findings.

2. Conclusions about research findings and how well project objectives and research questions have been achieved.

3. Appropriate recommendations on specific courses of action to indentified individuals within Tesco PLC.

PART 1 PROJECT OBJECTIVES AND OVERALL APPROACH

Tesco Plc is one of the largest global retailers, operating more than 4,331 supermarkets and convenience stores and employing more than 470,000 people. Tesco's core business is in Britain with a 30.1% market share, where the company ranks as the largest private sector employer in the United Kingdom, and the largest food retailer. In mainland Europe, Tesco operates in the Czech Republic, Hungary, Poland, the Republic of Ireland, Slovakia, and Turkey. In Asia, Tesco's operates in Japan, Malaysia, South Korea, Taiwan, Thailand, India and China. Through Its e-business, Tesco .com, the company ranks as the largest online supermarket in the world. In addition to the retail business, the company provides financial services through its subsidiary, Tesco Financial Services, which controls 4.6 million customer accounts. Tesco Telecoms, another major subsidiary, is the fastest growing mobile network and was ranked as the number one network for customer service why? Magazine in 2009. Tesco's group sales have increased by 27.7% during the period under consideration.

In 1919, John Edward (Jack) Cohen by investing his ₤30 stipend from his World WAR I service in the Royal Flying Corps in stock for his small grocery stall in the East of London. The successful trader soon spread to other London markets outside the East End. In 1932, Cohen officially founded Tesco Stores Limited. Over the next eight years , the company grew rapidly, as it opened more than 100stores. By 1947, the company had quickly changed its operations from being a corner store a self-service supermarket, and in the same year, Tesco Stores (Holdings) Limited went public and sold its first shares.

Over the next few decades, Tesco expanded quickly across the United Kingdom through a process of acquisition of smaller grocery chains. It soon diversified into non - food merchandise and eventually fresh food items. After realizing that the strategy of retailing vast selection of inexpensive food and non food items had deteriorated over time the fir's management began to focus on quality rather quantity. Due to increasing competition in the lower end of the retail market as well as changes in consumers taste in the late 1980's, the devised a strategy to take the chain up-market. Motivated by the desire to open more stores to increase market, also due to the over capacity in the retail market with the United Kingdom, Tesco began a programme of expansion by acquiring and opening new stores outside its home country. This outside expansion began in continental Europe followed by an overseas expansion to Asia and the United States. Tesco PLC is one of top FTSE 100 companies listed on the prestigious London Stock Exchange.

The shareholder view of profit seeking organizations is creation of wealth for its owners , shareholders, who risk the capital that is invested in the company. Conversely, the stakeholder view requires that the needs of all stakeholders of the organization are taken into to ensure a sustainable growth and continued existence. In order for the orgainisation to fulfill the needs of its stakeholders and ensure its continued existence, its has to assess its performance over prescribed periods, usually annually. Performance is usually judged in of terms both business and financial perspectives. Business performance and financial performance are two distinct indicators of performance of an entity, but are jointly used to assess the success of an entity in achieving its stated objectives.

Business performance is usually assessed with reference to market share, competitor performance, human resource management, product and market development, customer relations and corporate governance. Financial performance refers to how well the entity is acquiring and using resources. The evaluation of the financial performance of a company is normally undertaken using various financial ratios and trendy analysis.

Reasons for choosing the research topic

The selected topic will offord the researcher the opportunity to gain a deeper understanding of the figures and non -financial information as presented in the financial statements of companies. It will enable the author to understand not only the past but also future predictions about the business and financial performance of the selected company.

I was inspired to research about Tesco's transformation from being a corner grocery to being a global supermarket with its annual turnover now in access