Assignment 1

Manufacturing Business

Manufacturing businesses buy products with the intention of using them as materials in making a new product. Thus, there is a transformation of the products purchased. They also combine raw materials, labor, and factory overhead in its production process. The manufactured goods will then be sold to customers.

Value creation

The primary aim (goal) of any business entity. Creating value for customers helps sell products & services, while creating value for shareholders, in the form of increases in stock price, insures the future availability of investment capital to fund operations.

Merchandising Business

A type of business that buys products at wholesale price and sells the same the same item at retail price. They are known as "buy and sell" businesses. They make profit by selling the products at prices higher than their purchase costs. A merchandising business sells a product without changing its form. Examples are: grocery stores, convenience stores, distributors and other re-sellers.

Service Business

A type of business that provides intangible products (products with no physical form). Service type firms offer professional skills, expertise, advice and other similar products. Examples of service businesses are: salons, repair shops, schools, banks, accounting firms and law firms

Hybrid Business

Hybrid businesses are companies that may be classified in more than one type of business. A restaurant, for example, combines ingredients in making a fine meal (manufacturing), sells a cold bottle of wine (merchandising), and fills customer orders (service). Nonetheless, these companies may be classified according to their major business interest. In that case, restaurants are more of the service type - they provide dining services.