Business june mock

Business

decision-making organization established to produce goods and/or provide services

what are goods

physical products that are created to satisfy consumer needs. such as food

Services

intangible products such as haircuts

Factors of production and description

• Land (natural resources),

• Labour (human effort),

• Capital (non-natural or manufactured

• entrepreneurship (knowledge and skills to manage production processes),

departments and decription

• human resources (handles all aspects related to the workforce)

• finance and accounts (ensuring a business has enough funds to keep operations going)

• marketing (identifying the needs and wants of customers so businesses can provide goods and services)

• operations management (making goods and services with resources to meet needs and wnats of customers)

Consumers

The people who use goods and services. They are not necessarily the customers though.

customers

People or other businesses that purchase the goods and services

Added value.

Producing a Gator service that's worth more than the cost of the resources that were used to produce it

types of sector and what happens between each

• Primary (involved in the destruction of natural resources)

• Secondary (business activity involved with the manufacturing or construction of the finished products, turning the primary sector output into finished goods ready to be sold or used)

• Tertiary (business activities and well-producing services to customers, such as catering)

• Quaternary (refers to the business sector involved in the creation or sharing of knowledge and information.)

Added value is incremented as you go through the sectors.

Challenges of starting a business.

• Lack of finance

• Lack of market research

• Limited resources

• Long hours

• Lack of skills

Opportunities of starting a business

• Money

• Autonomy

• Challenges

• Passion

• Making a difference

Private sector.

Business is owned and run by private individuals and organizations which aim to earn a profit.

Public sector.

Controlled by regional and/or national government with the aim to provide goods and services for the general public, such as metro

Types of for-profit organizations and definitions

• Sole trader (commercial for-profit businesses owned by a single person).

• Partnership is a commercial business which aims to earn a profit for its owners.

• Companies commercial for-profit businesses owned by shareholders.

• Publicly held companies are limited liability companies owned by shareholders, with the shares in the business being traded on the public stock exchange.

Types of for-profit social enterprises and definitions

• Cooperatives - These are for-profit social enterprises owned and run by their members Their primary goal is to create value for their member-owners.

• For-profit social enterprise - This type of private sector organization uses commercial business practices to achieve social goals, such as improving the environment, building better communities, and developing social well-being. They do not focus on generating profits for their owners but strive to build and improve communities.

• Non-governmental organizations (NGOs) - These are a type of non-profit organization (NPO) operating as a social enterprise in the private sector of the economy for the benefit of others in society (rather than for shareholders).

• Social enterprises - These organizations are revenue-generating businesses with community (social) objectives at the core of their operations in order to benefit the general public, rather than private shareholder

Difference between vision and mission statement with definition

• A vision statement is an aspirational saying of what the business wants to strive to be or wants to achieve in the distant future.

• A mission statement is a motivating declaration of the core purpose of that organization, such as why it exists, who they are, and what they do.

Business Objectives

Clearly defined and measurable targets of an organization which are used to achieve its goals

SMART

• S is specific

• M is measurable

• A is agreed

• R is realistic

• T is time

Tactical objectives versus strategic objectives.

• Tactical objectives are easier to change; they're specific targets with timelines.

• Strategic objectives are targets that the whole business wants to achieve, and there's a bigger investment.

The four common business objectives

• Growth refers to an increase in size of a business and its operations.

• External growth is expansion of the business by using third-party resources.

• Internal growth is when a business grows without help of external resources.

• Profit is a positive difference between sales revenue and the sole cost of production.

• Protecting shareholder value.

• Ethical objectives are goals based on the moral guidelines.

Strategic versus tactical objectives.

• Strategic objectives refer to long-term goals that the whole organization continues to ask.

• Tactical objectives: short-term and specific goals of a business with timelines.

Corporate social responsibility

Value decision and action taken by business and impact the society in a positive way. It's about the organization's more objective to its stakeholders, communities, and society and environment.

Stakeholders

Individuals, organizations, or groups with interests in actions and outcomes of a specific business or organization affected by the performance of that business

Types of stakeholders and their interest

• Internal Stakeholders: internal stakeholders are individuals or groups who are part of the organization, such as employees. Interest in business organizations that they work with

• External Stakeholders people or organizations not part of the business but who have a direct interest in its decisions, actions, and performance, such as customers.

Shareholder.

Shareholders are owners of limited liability companies and are a type of stakeholder, and they are the people that buy shares in the company and own part of it.

SWOT

A framework for strategic analysis to allow managers to assess the current situation facing an organization

• Strengths: the things that the organization does well or better in comparison to its competitors

• Weaknesses: the things that the organization does not do so well in relation to its competitors

• Opportunities: external factors that provide openings for an organization to succeed

• Threats: external factors that hold back the business, preventing it from achieving its organizational goals

Economies of sclae

A business benefits from lower average costs by increasing the size of its operation.

Diseconomies of scale

An organization becomes inefficient due to the scale of its operations being too large to manage effectively. This results in higher average costs of production.

optimal output level

average cost of production is at its lowest value

average cost formula

total cost / quantity produced

Internal Economies of scale

Particular organization grows in terms of the scale of its operations or productive capacity.

External economies of scale.

Well, firms' average cost of production falls as the industry as a whole grows. This means that all firms in an industry benefit.

Internal diseconomies of scale

Problems within the organization that cause productivity to fall and inefficiencies to occur. Most of the problems arise because the larger business makes communication and coordination worse.

Bureaucracy.

Combination of excessive corporate policies, procedures, and paperwork

External diseconomies of scale

Occur when issues outside of the organization raise average cost of production for all businesses and industry

Internal growth.

Also known as Organic Growth, it takes place when an organization expands without the help of external partner firms. It uses its own resources, such as retained profit.

External growth.

Also known as inorganic growth takes place when an organization needs the support of a partner organization for growth.

External growth methods.

• Mergers and acquisitions

• Takeovers

• Joint ventures

• Strategic alliances

• Franchising

Mergers and Acquisitions

An acquisition involves one company buying a controlling interest, also known as a majority stake, in our company.

A merger is similar to an acquisition, but two or more companies agree to form a single larger company, benefiting from operating on a bigger scale.

Takeovers.

Takeover involves a company purchasing a controlling interest in another company. They are almost always hostile, as they occur against the wishes of the owners of the target company.

Joint Ventures.

External growth method that involves two or more organizations agreeing to create a new business entity, usually for a finite period of time but often as an ongoing collaborative partnership.

Strategic Alliances.

Created when two or more organizations joined together to benefit from external growth without having to set up a new separate entity or to make major changes to their own business models

Franchising.

Franchising is a growth method that involves two parties, with franchisors giving the license rights of franchises to sell goods, services, and the franchise brand or trade mark products.

Reasons for businesses to grow or to stay small

Reasons for businesses to grow

• Economies of scale

• Sources of finances

• Brand loyalty

Reasons for a business to stay small:

• Privacy

• Ownership and control

• Autonomy and maintenance

Multinational company.

Any business organization that has operations in the overseas market, no matter whether it produces/sells goods and/or produces services

Marketing

is the art of determinating the goods and services required to meet the needs and wants of customers in a sustainable way. determining

market orientation

marketing that focuses on meeting hr specric demands of uctomers and potential customer. nusnies makes prcuts thatt they can sell trtaer than product they can make

Product orientation

making products a business knows they can make well rather than primarily concentrating on the needs and desires of potential customers

market share

the sales revenue that an organization accounts for within a given market or industry.

market size

the total number of individual customers or total value of sales revenue in a certain market

market leader

firm with the largest market share in the industry

market growth

increase in size, measured by the rise in total sales revenue of the market or industry.

marketing planning

structured process of creating marketing objectives and appropriate marketing strategies to achieve these goals

marketing plan

plan of action with consideration of all elements of the marketing mix to meet the marketing objectives of the organization

marketing objectives

goals that help to give marketing teams a sense of purpose and direction

marketing strategies

different long-term actions used by an organization to achieve its marketing goals

market

term for buyers and sellers of a particular good or service

market segments

individual subgroups of a large market consisting of customers who share common or similar characteristics

market segmenttion

process of dividing a market for a product into smaller and distinct groups of customers in an effort to meet their specific needs and wants

demogrpahic segmentation

splitting consumers according to statistical characteristics of the population such as age, gender, family size, religion, and more

geograhic segemtnion

splits consumers according to their different geographical locations; factors are population and climate

psychographic segmentation

splits the market according to people’s lifestyle choices and personal values; lifestyle choices include: interests, hobbies, etc.; personal values being: moral beliefs held by a particular market segment

socio eocnomic segmentation

socio-economic segmentation splits the market according to consumer household income levels; this is often linked to their type of profession.

target market

clearly identifiable group of customers that an organization focuses its marketing efforts on

tageting

systematic process of aiming at a specific target segment

position map

graphical illustration of customer perception of a business, its products or brand in comparison to other firms in the industry

types of prodcuts

premium: perceived to be of high quality and high price

cowboy: perceived to be low quality but high price

bargain: high quality but sold at low price

economy: perceived to be low quality and low price

niche marketing

specific marketing strategy or marketing approach that focuses solely on identifying and meeting the needs and wants of a small market segment

mass amrkeintg

marketing strategy aimed at all customers in a market without having split them into separate market segments; the business provides goods and services that appeal to a wide range of groups of customers

Unique seling point

exclusive feature or aspect of a business product or brand that makes it distinct from others in the same industry

product differentation

firms attempt to make their goods and services different from those produced by other firms in the market in order to increase their own sales revenue

differntaton

the process of distinguishing an organization’s products from those of firms in the same industry

Marketing mix (how to differntate)

• product

• price

• place

• promotion

sales forecasting

quantitative technique used to predict a firm’s level of sales revenue over a given time period, such as per month, quarter, or year

market research

range of marketing activities designed to determine the opinions, beliefs, and feelings of existing and potential customers

primary market research

first-hand data, custom made to an organization’s specific needs; essentially collected as raw data because the information does not currently exist

Secondary research,

Secondary research, also known as desk research, refers to the collection of data and information that was previously collected by another source

Qualitative research

Qualitative research is a category of market research based on the opinions, perceptions, views, and preferences of research participants. It creates detailed and non-numerical information.

Quantitative research

Quantitative research is a category of market research based on gathering numerical data and figures, i.e. quantifiable data. It enables researchers to determine trends, correlations and patterns, such the number of people prefer a particular brand.

sample

proportion or subgroup of the population selected for market research purposes.

the 7 P’s of the marketing mix

• product

• price

• place

• promotion

• people

• process

• physical evidence