Business management unit 3

Assets

What a business owns (cash, real estate, inventory, equipment)

Liabilities

what a business owes (taxes, employee wages)

Equity + calculation

The residual value (what is left over)

Assets-liabilities=Equity

Accounting

Classifying financial data into reports that evaluates the health of the businesses’ finances (money in/out, financial statements, balance sheet/cash flow)

Finance

Looking to the future for financial success (financial planning, investments, raising money)

Difference between financing and accounting

Accounting=looking at past records

Finances=looking at future financial decisions

Revenue vs. costs

Revenue=income

Costs=expenses 

Customer value

when a customer believes product is valuable enough to give something up in exchange for it (money, time, effort)

Competitive advantage

What a company has that other companies don’t

marketing goals

• create awareness/build curiosity

• Encourage exchanges: show value to satisfy needs/wants

• target markets/groups of consumers

Marketing mix (4 ps)

1. Product (tangible/intangible, design, packaging, accompanying services) 

2. Price (match value + make money)

3. Place: Where is the product purchased? (Online, store, wholesale)

4. Promotion (communicate product, price, and place through advertising, sales, public relations)

Sales

Convert promotion into action

Value Chain

The activities that deliver value to customers.

Supply Chain

Moving products through the chain; efficiency = goal.

Economic value creation (EVC)

Difference between what a customer is willing to pay for a product and what it costs the company to produce the product.

Primary activities in the value chain

Directly related to product creation.

Secondary activities in the value chain

Support activities.

Inbound logistics

Relationships between suppliers and all activities to receive, store, and disseminate inputs.

Operations

Transform inputs into outputs.

Outbound logistics

Collect, store, and distribute output.

Marketing / Sales

Inform and gain customer interest.

Service

Activities to keep the product going.

Procurement

Acquisition of inputs/resources.

Human resource management (HRM)

Training, hiring, and developing employees.

Tech development

Infrastructure: Finance, accounting, legal.

Material assets

Things, equipment, tools, and products owned by the company.

Human assets

Employees.

Competitive advantage - Amazon

Mastered use of technology to customize/personalize your experience and get products quickly.

Competitive advantage - Starbucks

Sourcing high quality coffee beans and efficient store operations.

Primary activities

• inbound logistics

• operations

• outbound logistics

• marketing/sales

• service

Support activites

• procurement

• human resource management

• tech development

• infrastructure