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JESSOP AND ASDA ORGANIZATIONS
By [Omar Alshemeili]
Jessop and ASDA
Jessop is a photographic sales company, headquartered and situated in the United Kingdom. It majorly develops photographic equipment and facilitates photograph processing. It was established back in 1935 in Leicester by Frank Jessop. Gradually, the stakeholders changed the name of the brand to Jessop Group Limited. It began as a retail company with headquarters in Malow, the U.K. In 2016, the company was running a total of 56 stores. In January 2013, the company put an administration, and within the same month, all the 187 Jessop’s retail stores started trading. Peter Jones is a known investor in Jessop, and just like several other businesses in the sale industry, there are problems of economic risks. Unfortunately, Jessop Limited suffers from continuous losses.
Administration refers to a legal concept or procedure covered under the insolvency policies and common law jurisdictions. It operates similarly to the bankruptcy of the United States. The administration serves as a rescue mechanism across all insolvent entities and enables the involved companies, like Jessop, to carry on with its normal business operations (Klabbers, 2015). In the United Kingdom, the process is referred to as “under administration” or “liquidation.” An administration order typically commences it. Administrative company is eligible to authorizing receivership under an interim chief executive with custodial responsibility for the assets and obligations of an organization on the creditors’ behalf (Strickland, 2018. An administrator may recapitalize the business operations, auction the business to new owners, and sometimes demerge it into multiple elements that either be put on sale or close the remainder (Scott, Lundgren, and Thompson, 2018, pg. 130). For instance, Jessop may choose to continue trading, seek out for a sale of the assets or the business as a whole, then make a contractual decision.
My choice to administer Jessop is ASDA company. It is a massive global retailer and has several stores and branches across the United Kingdom. In the U.K., Walmart operates under the name ASDA, which is a British supermarket retailer with its headquarters in Leeds, West Yorkshire. Principally, ASDA solely builds its marketing promotions on the price factor. Notably, since 2015, just like the parent organization, ASDA has promoted and rebranded itself using the slogan “Save Money. Live Better” (Michalakeas et al., 2015). The organization accommodates close to 140,000 abled colleagues who serve more than 19 million clientele bases visiting the stores in different regions every week. The estate comprises a huge range of formats, among them the most massive Superstores and Super-centers, and sometimes smaller convenience size Supermarkets. Also, the company is characterized by dedicated ASDA Living stores that run across the United Kingdom. Being a properly established company, ASDA exceeds 300 billion dollars in sales every year (Michalakeas et al., 2015). While several other firms are struggling financially, ADAS is winning within a losing industry.
The second reason for selecting the ASDA company is the idea that a good number of its stores rest inside the bigger stores. The smaller stores are used as photo and camera sections, tire shop stores, pharmacies, eatery joints, among other services. The company has diversified across vast markets, and this strategy helps it achieve massive profits in terms of revenue. The success in ASDA is behind the supply chain that exhibits four unique components of cross-docking, vendor partnerships, technology, and integration, as well as distribution management (Michalakeas et al., 2015). ASDA has total assets of close to $220 billion and exhibits a net income of approximately 7 billion (Klabbers, 2015). The figure implies that as a firm, ASDA can remain patient enough and afford multiple years of loses at Jessop Europe Limited. It has the capacity and resources to reinvest at Jessop both in human and capital goods. It is a competent company that exhibits a lot of strength in five major interrelated sections of structure and decision making, work process and systems, leadership, people, and the ultimate culture (Scott, Lundgren, and Thompson, 2018, pg. 136).
The mission that ASDA embraces and works towards is “to save people money so they can live better.” On the other hand, the organization’s core vision is to remain the destination for clients to save their capital, regardless of how much they wish to shop. Therefore, the core objective of ASDA is to stay the best and ultimate retailer in the hearts and minds of its customers and the employee base (Klabbers, 2015). The company embraces four essential values: respect for people, service to the customer, strive for excellence, and act with integrity. However, there have been cases of the company not compensating its employees adequately, and it is not a generous firm when it comes to social responsibilities and influence.
For any firm to stay competitive in the ever-growing market, it requires adequate resources to facilitate its growth and thrive in the ever-evolving worldwide market. ASDA has penetrated through top global markets, and highly diversified on the range of services it sells to the market. By cultivating a more extensive clientele base, there are limited chances that the firm might collapse or fail to support all shareholders who have over time invested in the firm. Jessop needs to locate a firm that is appropriately established and portrays robust marketing strategies that could afford its value and ensure that the shareholders are not lost over time (Klabbers, 2015). Being an eligible recognized firm, ASDA is eligible to authorizing receivership under an interim chief executive with custodial responsibility for the assets and obligations of an organization on the creditors’ behalf.
The legal status of ASDA is a public limited company (PLC) and traded in New York Stock Exchange (NYSE) and the standards and paltry 500 (S & P). After ASDA was founded some time back, it was primarily registered as a proprietorship (Michalakeas et al., 2015). The company is registered as a state and chiefly operated apart for its owners. It is also categorized as a multinational corporation (MNC) with several branches across the world, although with headquarters in a central place. The main advantage of operating as a corporation is limited liability. In this regard, the owners of a firm are responsible for no more shares than the capital they have invested in it (Klabbers, 2015). Another substantial benefit is the capability to raise their income whenever people purchase goods. Also, the corporation does not close after the departure of an owner. In such scenarios, the shares of the deceased are sold, but the business remains in the market. Therefore, stuck holders do not have to create concerns about management issues as everything is sorted in its place.
However, there are several disadvantages inclined to start a company like ASDA, especially in the contemporary market. First, ASDA pays its taxes and fines on their income, while stockholders pay taxes on the total revenue profits issued (Michalakeas et al., 2015). Such a scenario is economically known as double taxation, which implies that a firm incurs double losses. Second, when developing a corporation like ASDA, there is a high probability that the co-founders or original initiators of the firm might lose control or the company, primarily when most of their stocks are sold directly to the public. Third, the government happens to take control of the corporation more than several other businesses of a similar nature (Du, Lu, and Tao, 2015). It is attributed to the idea that big corporations have vast revenue ranges, and the government must find an avenue to get something from the business, besides taxation (Du, Lu, and Tao, 2015). Most commonly, a corporation of such nature is costly and quite hard to start.
In conclusion, despite the disadvantages aligned to ASDA’s performance, it would be in a good position and contains adequate resources to save and restructure the current situation at Jessop. ASDA has enough muscles to put Jessop back on track, expand the clientele base, improves its marketability, enhance its profit margins, and help it to become a leading competitor in the more significant industry. As a wholly-owned Walmart division, ASDA is not expected to declare either the half-yearly or quarterly earnings. Instead, it is required to progressively submit all full accounts to the U.S. Securities and Exchange Commission every year. In spite of being a subsidiary of Walmart, the firm exhibits more autonomy than any branch of supermarket chains within the international division of Walmart. Besides, it has retained the management team from the British after is takeover back in 1999. Jessop needs to re-strategize and understands which firm it is willing to contract with, and maybe sell its shares as a form of firm administration. It is important for companies to send stock to trustworthy companies that have a wide market share, and contain resources that can withstand all the possible risks it comes with. Therefore, ASDA remains the best option in this case scenario.
Du, J., Lu, Y. and Tao, Z., 2015. Government expropriation and Chinese-style firm diversification. Journal of Comparative Economics, 43(1), pp.155-169.
Klabbers, J., 2015. An introduction to international organizations law. Cambridge University Press.
Michalakeas, D., Clearesta, E., Gomes, F., de Luiz-Garcia, R., and Schoof, W., 2015. ASDA’s fight for market share.
Scott, C., Lundgren, H., and Thompson, P., 2018. Guide to strategy in supply chain management. In Guide to Supply Chain Management (pp. 129-142). Springer, Cham.
Strickland, A.D., 2018. Firm diversification, mutual forbearance behavior, and price-cost margins. Routledge.
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