Two contrasting business – Tesco & Nike Essay
Two contrasting business – Tesco & Nike
Tesco is one of the world’s leading international retailers. Since the company first used the trading name of Tesco, in the mid 1920s, the group has expanded into different formats, different markets and different market sectors, whereas, Nike is an international brand almost known by every man, women and child in the world. Nike was founded a little later than Tesco in 1962 by Bill Bowerman and Phil Knight. For this assignment I am required to produce a detailed report on two contrasting medium/large sized organisations. My two chosen organisations are Nike and Tesco who I have briefly described above.
Both Nike and Tesco are two contrasting business in the business world. They both are very successful at what they do and are continuing to grow. Tesco is a retailer, whereas, Nike is a large organisation which markets its logo, and its product are made via other sectors of their organisation (There are specialized departments which profession in making goods for Nike). Tesco is the market leader in the UK at the moment with 28% of the shares in sales. Tesco is a PLC (Public Limited Company), which is owned through shares traded on the Stock Exchange, this enables the public to buy shares and own them for as long as they want or even sell them on for profit, floating Tesco as a PLC has helped them as its been able to dramatically grow and in the longer term make huge profits which has been one of their aims. Making huge profits has also enabled Tesco to expand throughout the world which again is one of their objectives.
‘We treat people how we like to be treated’, this is a famous phrase which Tesco practice and often is found on their websites, magazines etc. Basically, Tesco are implying they will do everything they can to ease costumer shopping. They have successfully done that by providing car parks to help people with cars, toilets so people don’t have to go home half way through shopping and cafes so costumers can have a relaxing time while they shop. All these are extra treats and a convenience to costumers as well as the people who made that phrase up as they will also like to have cafes, parking spaces etc when they go shopping. Also by adding additional features such as cafes, toilets, car parks, Tesco have encouraged huge sales growth as recent surveys found out that costumers at Tesco tend to stay in the store longer than any other stores. It isn’t surprising that every spent went to Tesco.
Nike is a brand which specializes in making high quality clothes, often referred to clothes worn by athletes; they produce things from trainers to wristband. Like Tesco Nike are breaking into different sectors of the market, one prime example of this is when Nike started to make sunglasses and sport watches, as a new target audience emerged. Nike went public in December 1980 and was floated on the New York Stock Exchange ever since. Like all businesses Nike want to make profits, they have been making profits since they were launched via promotion, new ideas, new products, and penetrating into new markets, one example of this is Nikes new idea of helping the environment which is a surprise considering the amount of toxic fumes let off into the atmosphere when making their goods such as trainers.
Nike is aiming to ‘eliminate waste’, in other words they are trying to control the amount of carbon dioxide emission being let off into the atmosphere, all this work for the environment is a good idea but the question is ‘why?’, why would Nike cut down and think of new ideas? It is simple, there are many people, potential costumers, who are aware of Nikes behaviour (previous behaviour, contributing to global warming) and would not buy Nike goods, this was a concern for Nike, so, this is why they are trying to cut down on the amount of CO2 let off into the atmosphere as those people are more than likely to start buying Nike goods as they will know they are doing their part for the environment.
Both organisations have been undertaking new ideas in order to boost sales, Tesco have done this by making customer shopping more enjoyable, this is done by understanding customer buying behaviour and Nike have achieved this by being more environmentally friendly. Above just states one thing that each business has done to boost sales but there are many other strategies both Tesco and Nike used to boost sales levels, this includes recycling (Nike), using new materials such as organic cotton (Nike), providing certain food for certain ethnic areas (Tesco, they have Halal meat in areas with high numbers of Muslims) and delivering (Tesco, another customer convenience).
Both Tesco and Nike have undergone activities in order to achieve their strategic aims and objectives. Below is a table clearly stating how they have implemented new ideas in order to achieve their aims: (Not all aims and objectives will be stated, just the main ones)
Measures taken to meet aims:
The effectiveness of measurements
1. To listen and engage – Tesco have got surveys on their cooperate website; www.tescocorporate.com. This tells the Tesco management what the customers like and dislike. They can then make alterations if necessary.
2. Improve relationship with suppliers – Tesco have got a new idea where they pay weight-for-age. This means paying certain prices for weight and age of for e.g. cattle meat, pork etc. This keeps suppliers happy, willing to do business with Tesco in the longer term and gives Tesco a good image.
3. To buy locally – Tesco are trying to buy their products locally, they have a team of buyers who go out and look for local produce. This helps local businesses such as farms and usually prices a kept to a minimum, so, Tesco end up paying less for products: it’s a money saving scheme.
Measures taken to meet aims:
The effectiveness of measurements
1. Improve working conditions Nike use internal monitors who are people who check on the quality of work, China is the first country to try this scheme out by Nike. 牋牋牋牋Working conditions are better, so, workers will feel better and production will be quicker and more efficient: it’s a money saving scheme in the longer term.
2. Cut down on CO2 emissions This is done by introducing new material, recycling more and wasting less material. This will cut costs, though its marginal and it will enhance Nikes image which is not good from the environment side.
3. Doing their part for the community Recently, Nike have transformed the lives of many young kids in a school in East London by providing sports equipment and money for playtime during school hours. It gives the community a better image of Nike as a helping and caring organisation and also it may be a way or promoting themselves as the logo is likely to be printed everywhere.
Effectiveness of business activities
Basically, the above table shows the effectiveness of activities conducted by Nike and Tesco in order to achieve their strategic aims and objectives. I would like to add to the table, below is what Tesco have done to meet their aims and objectives:
– Tesco has produced a website where people can get all the latest information on their products and also order them. This is particularly useful to people who have no time to go to the stores, this therefore, targets a newer audience and increases sale levels meaning a higher profit.
– Tesco has a team of researchers who look for local farmers and local produce, this helps the smaller farmers who in return can give Tesco produce at a lower price.
– They have a range of stores including, Tesco metro, local, superstore etc. Furthermore, Tesco have improved and upgraded facilities, e.g. larger car parking so more people can come and shop at ease, cr閏hes where people can leave their youngsters and shop without disturbance, this all eases the consumers minds and is likely to keep them in the store longer to buy more and visit Tesco more frequently as there is no trouble parking, leaving the kids etc. This improves sales.
Below is what Nike has done to meet their aims and objectives:
– Nike have internal monitors who check the working conditions of workers, this helps as working conditions can be improved if they are seen to be bad. It gives Nike a better image to what it was before (taking advantage of the developing countries and paying workers very little). Therefore, Nike has met one of their aims, which is to people’s perception of Nike.
– They have improved sales through the use of famous athletes in television commercials, Nike have conducted commercials for many years and they are still doing so, the athletes glamorise Nike products in the advert, so, people watching at home think a famous person is wearing it so I might as well. Here’s a perfect example of an advertisement on TV conducted by Nike and why it was done:
– Nike used world class footballers who are known by the majority of the population in the UK (this was a UK advertisement), the advert showed the footballers producing sublime skills and showing passion for their football clubs, it showed the players running up and down the football pitch, all the players were wearing the country and club kits which was sponsored by Nike. Nike made this advert so the viewers got the feeling that the Nike kits, football boots etc were something that made you feel proud of to wear and made you give skills such as ones shown on TV, this made viewers, especially the younger audience wanting to buy Nike products as they thought it can give them skills and enhance their image as top stars were wearing the same products as well.
(The advert is also available on Nikes website: http://nikefootball.nike.com/nikefootball/siteshell/index.jsp)