BUSINESS

BUSINESS

1. WHAT

   • Is an organization or enterprise
   • Engages in activities
     • Commercial
     • Industrial
     • Professional
   • For profit or not for profit

2. MISSION

   • What type of business the organization is in
   • AIM
     • What the business sets out to achieve. It goals.
     • OBJECTIVES
       • Intermediate targets. What must be achieved.
       • STRATEGY
         • The plan of how to meet the objectives
         • How to win in chosen inductry
         • The plan for the business as a whole
         • How BUs will work together
         • Mapping out the best possible route to success
       • Relates to the whole of the business
       • Shot, Medium & Long term direction
       • Leads to setting more detailed BU and Team objs
       • S.M.A.R.T
         • Specific
           • State exactly what is to be achieved
         • Measurable
           • Must be quantified so as to measure level of success
         • Attainable
           • Must be realistic. Set based on resources avaiable
         • Relevant
           • Should be relevant to the persons achieving them
         • Time bound
           • Set within a realistic time frame
     • Statement of purpose
     • Builds team spirit, encourage commitment
     • Should be written down

3. MAIN OBJECTIVES

   • Survival
     • Avhieve break-even point
       • Total Fixed Costs / Contribution Margin per unit
         • Contribution Margin = Revenue per Unit - Variable Cost per unit
     • TR = TC; no profit/loss
   • Profitability
     • Receiving more revenue than costs
     • Produce up to the point where MR = MC
       • Profit Maximization
   • Market Penetration
     • Ability of a new form to get into a market and start trading
     • Ability of an existing firm to expand its market share
   • Market Share
     • Advertising, discounts, rebates, etc - to attract customers
     • Percentage of sales volume in a market
     • Higher percentage means higher advantage
   • Sales Maximization
     • Selling as much product as possible without making a loss
     • Predatory pricing
   • Revenue Maximization
     • selling as much product as possible without factoring in cost of production
     • Up to point where MR = 0
   • Business Growth
     • Economies of Scale
     • Diversification
   • Diversifivation
     • Risk bearing economies
   • Satisficing
     • Aiming for satisfactory instead of optimal results
   • Level of Service
     • Offering the highest level of service
   • Technical Excellence
     • Focus on innovation and technology advancement
     • Sales will follow

4. RESOURCES

   • Land
     • Anything available
       • Physical space on land (Building, land space)
       • Within land, extracted (gold, oil)
       • Above Land (air and space rights)
     • Very hard to replace when used up
     • A natural resource
   • Labor
     • Mental or physical effort from humans
     • Workforse
       • Skills
         • Level available
       • Location
         • LRNI
       • Availability
         • Full/Part time
       • Physical characteristics
         • Sex, Age, Number
   • Capital
     • Overall wealth of a business
       • Money
       • Assets
     • Real (Assets)
       • Physical
         • Intangible assets
       • Human
         • Skills, Knowledge & experience to work Physical capital
     • Financial (Money)
       • Needed to acquire real capital
   • Entrepreneurship
     • See an opportunity. Take Risks
     • Acquire, Motivate, Inspire, Lead, Reward persons
     • Efficiently use other three resources

5. Accountability

   • Management control process
   • Report to someone higher on responsibilities assigned
   • Responsible for decisions made, actions taken and assignments completed
   • Ensures high performance & proper work ethics

6. Ethics

   • Code of conduct
   • Prevent exploiting position
   • Safety, bribes, Misuse authority, confidentiality, good business practices