SL Business Unit 1

Product

Refers to both goods and services

Goods

physical products - clothes, books, food

Services

Intangible products - transport, education, healthcare

Customer

People/organization who purchases a product

Consumer

people that use products

Consumer goods

products sold to the general public - rather than to other businesses

Capital goods / Producer goods

products bought by businesses to produce other goods/services

Cooperatives

For-profit social enterprises that are owned run by their members - employees or customers.

Incorporation

There is a legal difference between the owners of the the business and the business. Owners will be protected by limited liability,

NGOs

Private sector, not-for-profit social enterprises that operate for the benefit of others rather than profit.

Partnership

Private sector business entity owned by 2-20 people.

Privately held company

business owned by shareholders with limited liability - shares cannot be bought through the stock exchange

Publicly held company

limited liability company who’s shares are on sale to the general public on the stock exchange.

Social enterprise

revenue generating business with social objectives at its core - can be for or not-for-profit but all profits are reinvested rather than going to shareholders

Organizational Objectives

Measure and control, motivate, direct

Common Business Objectives

Grow, Profit, Protect shareholder value, ethical objectives

Ethical Objectives

Actions organizations that are considered to be morally correct employ

Pro VS Con Ethical Objectives

Pro

Improves corporate image

Increased customer loyalty

cost cutting

Improves staff morale and motivation

Cons

Compliance costs

Lower profits

Stakeholder conflict

Subjective nature of business ethics

Strategies

Medium-long term plan of action to achieve strategic objectives - Market standing, image/reputation, market share

Tactics

Short term plan of action to achieve tactical objectives - survival, sales revenue maximixation

Vision statement

Outlines an organization’s aspirations for the distant future - focused for long term, allow people to see what could be

Mission statement

simple declaration of the underlying purpose of an organization’s existence and core values - updated more frequently, outline values

CSR

consideration to ethical and environmental practise relation to business activity

1. Polices and practices need regular revues due to evolving expectations

2. Provides firms with a competitive advantage and long-term sustainability

SWOT

situational tool used to access the internal strengths and weaknesses and the external opportunities and threats of a business

Offensive Strategies

enables a business to gain max benefit from a favourable external situaition

Defensive strategies

strength meets an external threat (risk) - business needs to defend itself

Reorientation Strategies

favourable external factor but internal weakness. Business needs to adjust policies and practices.

Survival Strategies

Max threat. Survival policies are aimed to minimize any effect.

Ansoff Matrix

Analytical tool to help managers choose and devise product and market growth strategies

Market Penetration

Business chooses to focus on selling existing products in existing markets

Product Development

Selling new products in existing markets

Market Development

Selling existing products in new markets

Diversification

Selling new products in new markets

Related Diversification

less risky - products are in the same industry

Unrelated diversification

growth by selling completely new products in untapped markets

Business Plan

A formal report detailing the key aspects of a business idea or proposition and how the organization sets out to achieve this