Management process (key business functions)

niche market

A narrowly selected target market segment

need for change in marketing

A new competitor taking market share. Changing consumer attitudes

ALOE

Assets = liabilities + owners equity

need for change in operations

Changes to legislation concerning product safety, production methods and waste disposal

assets

Current → >12 months EX → cash, accounts receivable, inventory Non current < 12 months EX → land, buildings, fixtures and fittings Intangible → items of worths that have no physical substance EX → goodwill, trademarks, reputation, Logo

role of marketing

Differentiate product Build customer base exceed customer expectations

external sources of change

Economic conditions Geographic restrictions Social pressures Legal environment Political influences Technological change

Management consultants

External experts hired by a business to examine the efficiency and effectiveness of its entire operations or to analyse a particular area of business then make a recommendation

owners equity

Funds contributed by the owner to establish and build the business

place mix

How you distribute a product to consumers

acquisition stage

Identification → identifying staff needs, job analysis Recruitment → Attracting new people to apply for the position Selection → choosing and hiring the most qualified, testing and interviewing

promotion

Inform, persuade and remind customers about a brand and its products

types of distribution

Intensive distribution → mass market available everywhere Selective distribution → retailers and dealers are screened Exclusive distribution → very limited access

Revenue statement (income statement)

Lists sales and expenses and is generally recorded periodically

6 types of imputs

Material inputs → raw materials Capital equipment → Plant, machinery property Labour → people involved Information from a variety of sources → market research that guides decision Time → planning, scheduling Money → Most flexible resource

advantages of management consultants

Objective analysis Experienced in all issues so they can identify problems easily Tailor needs for business Innovative solutions for competitive advantage

cashflow statement

Provide information about the liquidity of the business

need for change in finance

Rising costs of operating the business

mass market

Seeks a large range of consumers Generally necessities One types of product with little or no variation

market price cost

Supply and demand shortage → market price will rise Surplus → market price will fall

disadvantages of management consultants

Takes time to learn practices of the business Expensive Difficult to measure benefits interrupts business operations Corporate information may not be kept secretive

new business cultures

The vision, mission, informal communication and unwritten rules and procedures A particular culture may prevent a business from responding to external influences

what must an income statement have

Title with period recorded 5 elements → revenue, less COGS, gross profit, less expenses, net profit Revenue stated at the top

price mix

What the buyer is willing to pay for the product

redundancy

a job is no longer required to be performed, usually due to technological changes, a merger or takeover

4 stages of the human resource cycle

acquisition development maintenance seperation

Quality Assurance

adopting specific procedures, controls, and recording and documentation measures.

strategies to reduce resistance to change

allow employees to participate two way communication outline positive and negative aspects offer new learning experiences don't rush change

liquidity

amount of cash a business has access to and how readily it can convert its assets into cash so that debt can be paid

organisational change

any alteration in the business / work environment

operations managment

bringing together of a number of resources, to create finished goods and services through a series of operations establish quality influence the overall cost of production ensure supply meets demand

competitors price

choosing a price that is either below, equal to or above that of the competitors

what is the transformation process

conversion of inputs into outputs

expenses

costs incurred while acquiring or manufacturing a good or service to sell and the costs (direct and indirect) associated with managing all aspects of the sales of that good or service.

relational marketing

developing closer relations with individuals and stakeholders to ensure old clients are retained and new clients are attracted Eg loyalty cards

product postioning

development of a product image compared with the image of competing products EX rolex = luxuary

personal selling

direct customer contact that outlines features Messages tailored to direct individual needs EX → car sales, facebook targeted ads, Services

retrenchment

dismisses an employee because there is not enough work to justify paying him or her

seperation

employees leaving the businesses

interactive business environment

ensure customers are involved through the process of collecting and implementing feedback

what is quality management

ensures product meets customer expectations aims to minimise defects and have conformity

balance sheet

financial statement that details business assets and liabilities at a set time

net profit

gross profit - expenses

target market

group of customers with similar characteristics who presently, or who may in the future, purchase the product

finance

how a business funds its activities

Quality control

inspections at various points to check for problems and defects. Performance is measured in relation to set standards or benchmarks. Achieves consistent product

marketing

interacting activities designed to plan, price, promote and distribute products to present and potential customers

liabilities

items of debt owed to their organisations Current → overdraft, accounts payable, credit card debt Noncurrent → mortgage, loans, lease, retirement funds

maintenace

motivating employees to remain with the business Monterey benefits → financial compensation for efforts Non monetary → rewards as conditions, fringe benefits Remuneration → combination of both

need for change in HR

motivation, productivity and quality fall. Absenteeism and turnover increase

effects of new technology

offers many cost saving benefits and increasing profits Change over might be costly and time consuming

Total Quality Management

ongoing, business-wide commitment to excellence that is applied to every aspect of the business's operation. Use employee empowerment, continuous improvement and improved customer focus

cogs

opening stock + purchases - Closing stock

what are the 4 key business functions

operations, marketing, finance and human resources

revenue

price x quantity

what is the marketing mix

product, price, promotion, place

accounting

recording and analysis of all the business's financial transactions

discount price

reducing price of stock that is not selling to stimulate demand

Human resources

relationship between the employer and the employees

profit

revenue - COGS

product mix

satisfies needs or provides intangible benefit quality, design, packaging, labelling and features

Simply transformed manufactures

sold for further processing

Elaborately transformed manufactures

sold to final market manufactured goods that are highly processed and valued.

resistance to change

staff --> Deskilling, Acquiring new skills, Loss of career prospects financial cost --> new equipment, redundancy, new plant layout

what are operations

strategies to improve production processes and to create the ideal factory or office layout

market segmentation

subdivided into groups of people who share one or more characteristics based on demographic, geographic, lifestyle and behavioural

development stage

teaching employees new skills and task associated with their job Skills inventory → compile database of skills and experience of current employees Training is an investment in human capital

internal sources of change

technology new systems and procedures new business culture

core goal of operations

to increase profit

cost plus margin

total cost of production and adding a percentage (a margin) for profit

purpose of balance sheet

tracks liabilities and equity levels Compare current financial position to previous periods Assist in financial decision making

contingency

unanticipated events that can lead to financial difficulty

benefits of target market

use marketing resources more efficiently better understand the consumer buying behaviour collect data more effectively influence consumer choice.

new systems and porcedures

using IT for communication, promotion and selling keeping digital records and managing information

dissmissal

when the behaviour of an employee is unacceptable and terminates the employee's contract