Unit 1 Principles of Business

Unit 1 Principles of business

Table of Contents
TASK 1............................................................................................................................................3
AC1.1: Explain the characteristics of different business markets...............................................3
AC1.2: Explain the nature of interactions between businesses within a market.........................3
AC1.3: Explain how an organisation’s goals may be shaped by the market in which it operates
.....................................................................................................................................................3
AC1.4: Describe the legal obligations of a business...................................................................3
TASK 2............................................................................................................................................3
AC2.1: Define business innovation.............................................................................................3
AC2.2: Explain the uses of models of business innovation.........................................................4
AC2.3: Identify sources of support and guidance for business innovation.................................4
AC2.4: Explain the process of product or service development.................................................4
AC2.5: Explain the benefits, risks and implications associated with innovation........................4
TASK 3............................................................................................................................................5
AC3.1: Explain the importance of financial viability for an organisation..................................5
AC3.2: Explain the consequences of poor financial management..............................................5
AC3.3: Explain different financial terminology..........................................................................5
TASK 4............................................................................................................................................5
AC4.1: Explain the uses of a budget...........................................................................................5
AC4.2: Explain how to manage a budget....................................................................................6
TASK 5............................................................................................................................................6
AC5.1: Explain the principles of marketing................................................................................6
AC5.2: Explain a sales process....................................................................................................6
AC5.3: Explain the features and uses of market research...........................................................6
AC5.4: Explain the value of a brand to an organisation..............................................................7
AC5.5: Explain the relationship between sales and marketing...................................................7
REFERENCES................................................................................................................................7

TASK 1
AC1.1: Explain the characteristics of different business markets
There are basically two types of market can be seen i.e., Perfect Competition and
Imperfect Competition. Talking about Perfect Competition, its characteristics shows that there is
no barrier for any of the buyer and seller and monopoly cannot be created. When it comes to
Imperfect Competition, it does have the characteristics where company tries to create the
situation of monopoly with the market because of the single seller or concept of oligopoly can be
done in where sellers are in limited number.
AC1.2: Explain the nature of interactions between businesses within a market
Different form of business has different types of interaction with customer. In context of
perfect competition market, customer and business does business on their mutual understanding.
On the other side, imperfect market do not allows the customer to do discussion as they are
needed to satisfy themselves with the decision of seller.
AC1.3: Explain how an organisation’s goals may be shaped by the market in which it operates
In any of the entity there are certain types of goals which they want to accomplish which
operating within the market. It is said that in first stage, organisation goal is always to attain
maximum profit by increasing their overall sales volume. Second goal is to influence customer
for purchasing the product at their choice where service must be of their choice.
AC1.4: Describe the legal obligations of a business
Any of the organisation need to understand that they must be able to follow rules and
regulation for performing any of the business activity. The first thing which is needed to be
focused is that statutory law for incorporation must be followed. Organisation should pay proper
tax and other laws and regulation must be followed related to employment law.
TASK 2
AC2.1: Define business innovation
It is one of the process through where organisation tries to bring innovative idea and
concept for performing business activity. The main motive of introducing the idea to take
competitive advantage within the market.