Business Report: Introduction to Business Concepts and Analysis

This report provides an introduction to key business concepts. It begins with an analysis of public limited companies, discussing their advantages and disadvantages, including raising capital and regulatory compliance. The report then explores the product life cycle, outlining its stages from introduction to decline, and the marketing strategies associated with each. It further examines employee incentives, such as monetary rewards, benefits, and career development opportunities, to increase commitment and productivity. Finally, the report differentiates between leadership and management, highlighting their distinct roles in setting vision, implementing strategies, and guiding organizational functions. The report uses examples to illustrate each concept, providing a comprehensive overview of these core business principles.

INTRODUCTION TO BUSINESS
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Table of Contents
INTRODUCTION ...............................................................................................................................4
TASK 1 : ADVANTAGES AND DISADVANTAGES OF PUBLIC LIMITED COMPANY.............4
TASK 2 VARIOUS STAGES OF PRODUCT LIFE CYCLE..............................................................5
TASK 3 : INCENTIVES TO EMPLOYEES TO INCREASE THE COMMITMENT TO WORK....6
TASK 4 DIFFERENCES BETWEEN LEADERSHIP AND MANAGEMENT ...............................8
CONCLUSION....................................................................................................................................9
REFERENCES.....................................................................................................................................9
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Illustration Index
Illustration 1: Source : Product life cycle stages, 2016........................................................................5
Illustration 2: Source: Financial Rewards for employees : Definition & Types,2016..........................7
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INTRODUCTION
Business is a form of conducting economic entity to generate profits by provision of goods
and services to consumers. There are various forms of business such as sole trader, partnership,
public limited companies, non profit organisation or private limited companies. The current report
focuses on Public Limited companies and their merits and demerits. Further this report is giving
explanations about various life stages a product has to face in its life such as introduction,
growth,maturity and decline. Moreover it has touched few incentives provided to employees for
their positive attitude and commitment towards the organisation. Leadership and management are
two distinct terms and ave different implications and accountability which are explained in the
report.
TASK 1 : ADVANTAGES AND DISADVANTAGES OF PUBLIC LIMITED
COMPANY
Public Limited companies are companies with separate legal entities and whose shares are freely
offered and traded in the market to public. These companies are closely regulated and also the
Financial Statements are to be disclosed in order to provide information about companies to
investors and potential investors. Feature of Perpetual succession adds success of organisation and
its independence(Buigut, Soi, and Koskei, 2015). Some of the examples of Public Limited
Companies in UK are Vodafone Plc, HSBC, Barclays ,AstraZeneca, British American tobacco Plc,
GlaxoSmithkline Plc.. There are some features which provide inherent advantages to Public Limited
Company.
Raising capital through public is major advantage. Public companies which are listed on
recognised stock exchange can easily raise funds through public borrowings in terms of equity or
bonds or debentures. Also it attracts investments from mutual funds, institutional investors or hedge
funds. Shares of Public Company are easily transferable as they are traded in market. Market is
based on assumption that there are plenty of buyers and sellers. Therefore it gives shareholders the
comfort of liquidity. Adding a Plc at the end of the name of company add to its prestige and more
people and investors are aware about it. Since it is listed on exchange it has its market value based
on its growth and expectations as viewed by public. Confidence is generated by strict regulations
followed by it and also better transparency in its functioning(Kumar, 2016).
There are two sides of every coin therefore there are certain disadvantages attached with
Public limited company as well. One of the major limitation is strict regulations and mandatory
compliances so as to protect the investor rights and interest. There are various caps on issuing
shares and maintaining reserves and regarding distributing dividends as well.To get registered as a
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public Limited Company it needs huge capital financial commitments at the point of initiation.
£50,000 is the minimum share capital required to acquire the status of Public Limited Companies.
Major issue with Public Limited companies is control and ownership as Founder and top
management are unaware about the shareholders and their accountability towards them as they keep
on changing dynamically(Knowles and Egan,2013).
Therefore it can be concluded that Public Limited Companies carry advantages and
disadvantages therefore before making decision of going public , company should take care of all
the merits and demerits and decide accordingly.
TASK 2 VARIOUS STAGES OF PRODUCT LIFE CYCLE
Product is anything wit utility to satisfy the desires of customers. A product's progress is
plotted through sequenced time line such as introduction to growth then maturity and ultimately
decline. This life cycle is an outcome of marketing strategies and situation affecting the magnitude
of product sales(Stark, 2015).
As per the life cycle concept first stage is introduction when the new product is
launched in the market. At this stage huge marketing and advertisement expenses are incurred to
promote product and establish it in the market. At initial stage sales are low and designing expenses
are high therefore profits are minimal and sales are growing slowly. There may be minute threat of
competitors as well at this stage(Bangchokdee, Mia and Winata, 2015). Costs involved such as
distributing free samples, test checks etc pose burden on the cost of product thereby adversely
affecting profits. For illustration, suppose a cellphone company wants to launch a new mobile
phone into market with exclusive features and innovative technology. At the introduction stage it
will price the phone at 10%-20% high as the technology and features are new and consumer will
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Illustration 1: Source : Product life cycle stages, 2016

pay willingly.
At the second stage of Growth since product is introduced and people become aware and
sales rises and also economies of scale is achieved therefore reducing the cost and increasing the
spread between sales and costs and therefore leading to profitability. Also this is the point when
competitors try to enter the market as they see growth in market want a piece of it in their pockets.
As the competitors gain access to market prices reduce as customer have choices available and
increased bargaining power. For example: A consumer based company might start selling cereals in
market across the country by advertising and widening the distribution channels.
At the maturity stages market as a whole is growing, however if this is not the case then
firm's market share is growing thereby giving maximum sales in this stage. At this stage maximum
sale magnitude is reached and also the saturation, profits of the firm begins to slow down from here
as there is stiff competition in the market. At this stage product achieves sales because of its unique
features and brand name established in the market. For illustration: the phone company that was
leader or first in introducing the phone should extend its service channels as well which will attract
more customers.
At the next stage of decline , since many new entrants enter the market the competition
becomes stiff and market needs to be shared by various companies therefore leaving less revenues
to the product(Bartlett and Twineham, 2013). Profit reduces as the sales reduces and economies of
scale is evaded from market. Suppose a toothpaste company with lots of competitors around is
earning very less margin and profits thereupon.
TASK 3 : INCENTIVES TO EMPLOYEES TO INCREASE THE
COMMITMENT TO WORK
When a company wants to increase the productivity and commitment of employees towards
work organisation offers its employees rewards and recognition. It is a system wherein success are
rewarded and efforts are recognised and prizes are distributed to felicitate qualities and motivate
others.
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Illustration 2: Source: Financial Rewards for employees :
Definition & Types,2016.
Monetary rewards such as bonus and commission based on performance should be awarded
to employees on their unusual and extra work performed in terms of percentage or exact amount
predetermined. Commission should be based on percentage basis offered for services such as
references of relatives for appointing them as employees or performing extra sales criteria.
Employee feels motivated and committed towards company as their financial requirements are
looked upon. Bonus or overtime should be paid for working beyond the normal hours(Martocchio,
2013).
Incentives in form of basic and supportive services such as healthcare and medical facilities
by reimbursing the medical bills or entering into tie up agreement with hospitals and chemist shops
to provide discounts to the employees of the respective company. Also incentives such as initiating
a medical or accidental or health insurances for employees will make them feel secure and
committed towards company in return to such insurance cover. Company can extend such series
even after the retirement to the employees in combination with employees to contribute equally
towards such funds or premium(Larkin, 2014).
Incentives in form of career growth and development proves to be incarnation tot employees
and stimulate them towards working for company with full commitment and enthusiasm as the
company is offering opportunity for personal growth and development. Company can extend such
growth by extending career opportunities of promotion and advancement through training and
security in terms of job to employees. Rewards and promotion to superior levels should be initiated
by company to increase the employee satisfaction. Employees should also be offered Employee
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stock option plans at significant discounts.
Company should offer the employees with recreational and entertainments opportunities to
increase the team coordination and satisfaction and willingness to work with the companies. Free
coupons and vouchers should be distributed for food and amusement parks and shopping to make
the employees happy and increasing their commitment towards work. Employees should be taken
for outings and picnic to develop informal bonds as they share half of their life in terms of working
hours with the company.
TASK 4 DIFFERENCES BETWEEN LEADERSHIP AND MANAGEMENT
Leadership is the skill of leading or guiding persons, groups or whole organisation. It is the
ability of individuals to take smooth decisions and encourage others to excel in their performance
and out-stand the competition. Leaders plays a vital role in setting the vision and strategies for the
organisation and channelise the efforts to follow and achieve desired objectives.
The major difference between leadership and management is leadership influences the
people to follow them and in case of management people are forces and influenced to work for
management. Management is reactive whereas the leadership function is proactive. Leadership lays
the plan for people perspective and general guidelines to achieve organisational goals whereas
management presents deep insight into technical dimension of the vision and strategies presented by
leaders.
Management is a wide concept and focusses on organising and coordinating the functions
and operations of business in a channelised manner towards accomplishment of desired objectives.
Management can also be referred as bunch of people responsible for making strategic decisions and
directing organisation towards profitability and innovation. Management lays emphasis and focus
on implementation of strategies formed by leaders(Răducan and Răducan, 2014).
Management is a science with detailed study and exact plans and standards which are logical
an technical whereas leadership is an art of presenting the strategies and encouraging people to
achieve them. Leadership is about developing and establishing vision and strategies for an
organisation to achieve the vision which are set high but are formed keeping in mind reasonable
standards whereas management focusses on detailed procedural steps and time tables for allocating
resources and task among the employees and other factors to achieve the targets set by
leaders(Bolman and Deal, 2014).
People with level of understanding foe skills and knowledges required for accomplishment
of vision are grouped together to form teams and directions are communicated therein for achieving
vision. On the contrary, management establishes organisational structures and framework by
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delegating authority and responsibility by framing policies and process to be followed.
Leadership is all about focussed on mentoring, inspiring and motivating the people to develop and
overcome gradually the barriers to change and avoiding resistance. On the other hand Management
is focussed particularly on organising and controlling the changes and resolving the problems faced.
CONCLUSION
Therefore from above mentioned report is focussed on different concepts of business. First
part of the report is explaining the advantages and disadvantages and it explains the Public limited
company and its merits and demerits associated. Furthermore it explains the different stages of
Product life cycle and strategies to be followed. Third part deals with incentives to employees for
increasing their commitment and satisfaction towards company. Moreover report explains the
differences between leadership an management as they are two distinct functions in the
organisation.
REFERENCES
Books and Journals
Buigut, K.K., Soi, N.C. and Koskei, I.J., 2015. Determinants of CEO compensation evidence from
UK public limited companies. International Journal of Business and Management.10(1).
p.223.
Kumar, A., 2016. State holding companies and public enterprises in transition. Springer.
Knowles, T. and Egan, D., 2013. The changing structure of UK brewing and pub retailing.
International Journal of Contemporary Hospitality Management.
Stark, J., 2015. Product lifecycle management. In Product Lifecycle Management. pp. 1-29.
Springer International Publishing.
Bangchokdee, S., Mia, L. and Winata, L., 2015. Competitive strategy, product life-cycle and the use
of MAS information: evidence from Thailand.
Bartlett, D. and Twineham, J., 2013. Product Life Cycle. In Encyclopedia of Corporate Social
Responsibility .pp. 1914-1920. Springer Berlin Heidelberg.
Martocchio, J., 2013. Employee benefits. McGraw-Hill Higher Education.
Larkin, I., 2014. The cost of high-powered incentives: Employee gaming in enterprise software
sales. Journal of Labor Economics. 32(2). pp.199-227.
Bolman, L. and Deal, T., 2014. Leadership and management. Christian Youth Work in Theory and
Practice: A Handbook. p.245.
Răducan, R. and Răducan, R., 2014. Leadership and Management. Procedia-Social and Behavioral
Sciences.149. pp.808-812.
Online
Product Lifecycle Stages, 2016. [Online]. Available through
<http://www.expertprogrammanagement.com/2011/01/product-lifecycle-stages/> [Accessed
on 20th December, 2016]
Financial Rewards for Employees: Definition & Types,2016. [online]. Available
through<http://study.com/academy/lesson/financial-rewards-for-employees-definition-types-
quiz.html>[Accessed on 20th December, 2016]
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