Principles of Business: Financial Viability and Marketing Strategies

This report provides a comprehensive overview of various business principles, encompassing market analysis, business innovation, financial viability, and marketing strategies. The report begins by examining the characteristics of different business markets and the interactions between businesses within these markets. It then delves into how an organization's goals are shaped by its market and the legal obligations businesses must adhere to. The second part of the report focuses on business innovation, including its uses, sources of support, the product/service development process, and the associated benefits, risks, and implications. The report then explores the importance of financial viability for an organization, the consequences of poor financial management, and different financial terminologies. It also covers budget uses and management. Finally, the report discusses the principles of marketing, the sales process, market research features, the value of branding, and the relationship between sales and marketing. This report offers valuable insights and strategies for businesses to enhance their market presence and achieve their goals.

Principles of business

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
1.1 characteristics of different business markets....................................................................1
1.2 Explain the nature of interactions between businesses within a market..........................1
1.3 Explanation on how an organisation’s goals may be shaped by the market in which it
operates...................................................................................................................................2
1.4 legal obligations of a business..........................................................................................2
Task 2...............................................................................................................................................2
2.1 business innovation..........................................................................................................2
2.2 uses of models of business innovation.............................................................................2
2.3 sources of support and guidance for business innovation................................................2
2.4 process of product or service development......................................................................3
2.5 benefits, risks and implications associated with innovation.............................................3
Task 3...............................................................................................................................................3
3.1 importance of financial viability for an organisation.......................................................3
3.2 consequences of poor financial management...................................................................3
3.3 different financial terminology.........................................................................................4
Task 4...............................................................................................................................................4
4.1 uses of a budget................................................................................................................4
4.2 Explanation on how to manage a budget..........................................................................5
Task 5...............................................................................................................................................5
5.1 principals of marketing.....................................................................................................5
5.2 Process of sales.................................................................................................................5
5.3 features and uses of market research................................................................................5
5.4 value of a brand to an organisation...................................................................................6
5.5 relationship between sales and marketing........................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................6

INTRODUCTION
This chapter is to provide details about various principles of business. Different
organisations have different business principles. Also, there are numerous market enterprises
which can help to achieve organisational goals and targets. Furthermore, the available innovative
methods will also be discussed in this assignment. Through it, a firm can gain more profits and
be successful in its field (Aaronson and Higham, 2015). It also helps to earn more market shares
and revenues to the entities. In addition, this report will provide description about financial
management and budgeting and how to utilise these budgets.
Task 1
1.1 characteristics of different business markets
The world of business is an extremely large place and there are plenty of ways to run a
success company and make a profit if you understand the market (What Are The Five Principles
of Marketing? 2017). They are many different types of customer you can sell your products too
but the main business markets can be broken down into these 5 categories:
 business to business market
 Industrial market
 professional services and Financial services
 Government
 High Street
1.2 Explain the nature of interactions between businesses within a market
An example of the nature of interactions businesses can have between each other could
be a baker decides he’s going to open up a factory that makes and sells bread, he then interacts
with a multi million pound company such as Virgin Atlantic who’re looking for another business
to make sandwiches for their flight meals. They would most likely test his products then once
they were happy with the quality of his bread they’d agree a contract with the baker and both
companies would hopefully find the deal profitable (Bonnitcha and McCorquodale, 2017). This
is an example of how good interactions between businesses can lead to great results for both
parties.
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1.3 Explanation on how an organisation’s goals may be shaped by the market in which it
operates
Our radio goals are shaped by what our listeners want to hear, for example if we’re
playing 80s music but our listeners tell us they want to hear songs from the 1990’s then we will
have to aspire to play more 90’s music to accommodate what they want. For me as a journalist if
listeners say they want to hear more about a local sports team then me and my team will have to
aspire to offer better coverage of that team. Our focus has to be to give listener a reason to listen
to us and not another station and we do that by shaping of goals around what they want.
1.4 legal obligations of a business
When starting a business there are a number of legal obligations you must follow. Firstly
the Corporations Act 2001 has all the requirements a business owner must abide by in terms of
the structure of his/her business, an example would submitting your annual return.
If you decide to employee staff you will also have to follow several other legal
requirements such as the Anti Discrimination Act 1991 to ensure your staff are treated fairly.
Health and Safety is also an element when having a work force, it’s important to make sure they
comply with the Work Health and Safely Act 2011. Finally if you’re leasing a property it’s
important to stick to the Retail Shop Leases Act 1994 (Sara Carter and Jones-Evans, 2009).
Task 2
2.1 business innovation
The simplest way to describe innovation in business is a new creative idea that is
designed to help improve your business. Whether that be to improve the working lives of your
staff, improve your profits or improve your products it’s something that will have a positive
impact on your company.
2.2 uses of models of business innovation
Models of business innovation can help you identify opportunities to grow your business,
generate new creative ideas, find and successfully enter into new emerging markets and create
new systems and rules that will take your business forward (Mares, 2011).
2.3 sources of support and guidance for business innovation
The government are constantly focused on improving business in the UK and offer help
to those businesses who’re in need. Here you can get support to get improve and grow your
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business through ways of business innovation. Often local authorities also offer businesses help
to get going. Barnsley council offer a business start up plan which helps local people set up their
own innovative businesses.
2.4 process of product or service development
In order to create a product or service you firstly must come up with an idea. The next
step is to consider is their a market for your product, do people want to buy it? Then you must
create strategic plan to decide how you’re going to sell your product. The next step is to create
a prototype of your product and test it with your target audience. Once you’re happy that your
products works and it’s what your target customer wants on the market then you must promote
and finally launch your product to the market (Moreno, Lilley and Lofthouse, 2015).
2.5 benefits, risks and implications associated with innovation
There are many benefits to innovation but there are also many risks. The benefits can
include increasing your profits, helping to personalise your services, finding new business
opportunities or even giving you an advantage over your competitors. An example of this is at
our company (Lincs FM Group Yorkshire) we’re currently looking at new innovative ways to
use social media to enhance our radio listenership however it’s difficult to do that with a small
team so we have to handle our time management well in order to innovate.
Task 3
3.1 importance of financial viability for an organisation
Financial viability is extremely important in any business because making financially viable
decisions can determine whether your business is successful or not. Making sure something is
financially viable simply means to ensure it’s profitable and you can afford it. An example in our
organisation would be we purchased an IPhone for the news team to use as a recoding device as
well as a phone. It most likely cost around £300 but has helped us gather hundreds of top quality
interviews over the past 12 months, which will have hopefully increased the amount of listeners
we have and because of the increase in listeners more companies will have decided to advertise
with us so our revenue will have increased (Ord, Fildes and Kourentzes, 2017). That means it
was financially viable to invest in the IPhone even though it cost the company at the beginning.
3.2 consequences of poor financial management
As I touched upon in the last answer it’s very important to make financially viable
decisions because if you make the wrong decisions it can land your company in debt. When
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making a financial decision it’s key to really think about what the consequences might be if your
decision isn’t financially viable. If a company decides to spend money on items that are
expensive but won’t really improve their business then they will soon find themselves in lots of
debt, they could have to make cut backs or make people redundant to survive as a business.
That’s why it’s vital to carefully think about every decision you make in business.
3.3 different financial terminology
Turnover – The amount of money a company has taken over a period of time.
Gross Profit – The amount of money a company has made after allowing for the cost of it’s
product and the cost of selling the product.
Net Profit – Net profit is the actual profit a company has made after working expenses.
Debt – Debt is an amount of money that you owe to someone or a company.
Credit – Is the ability to allow a customer to obtain goods or services without paying for them
first but with the knowledge they will pay for them at a later date (Reif, 2017).
Task 4
4.1 uses of a budget
A budget helps you to be organised when it comes to managing your finances, in terms
of a business it helps you work out what money you can afford to spend on expenses while still
making a reasonable profit. An example of this in our company might be we have a £100,000
budget for a year and in that year we have to try stay within that budget. The company may need
to spend £30,000 on new radio equipment, £20,000 on a new member of staff, £50,000 thousand
on petrol expenses across the group and a further £10,000 on building rent. If that was the case
and they over spent by £10,000 it would mean that money would eat into the companies profits
therefore its important to try stick to your budget when possible.
4.2 Explanation on how to manage a budget
When managing a budget it’s important to leave some room for compromise, that way
you can allow for unexpected costs. For example if you work out that the next 12 months will
cost your company £100,000 in expenses, it’s good to then budget for a £120,000 so if some
expensive equipment then brakes and it costs you £10,000 extra to repair it, you’ll not go over
your budget (Reinhardt, 2000). A budget can also change through out the year depending on
profits, if your company have a large increase in profits you may be able to afford to increase
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your budget to match the growth of your business just as if your company have a dip in
profits you may also have to reduce your budget.
Task 5
5.1 principals of marketing
Marketing involves a range of processes that are used to find out what customers want,
these are known as the 4ps. They stand for Price Product Production and Place. These are the 4
main principals of marketing and one you find out it will help you market your product
successfully.
5.2 Process of sales
Each company will have a slightly different way in how they sell their product, for
example in a retail shop such as All Saints the staff may approach a customer when they come
into the shop and politely offer assistance, then will then allow you to shop and only help you
when needed but in other more high end retail stores staff may be told to personally assist each
costumer individually in order to try make a sale (Ross, 2003).
If the customer is happy they will send the add off to our productions team to have it
made, once the customer is happy with their finished add they will choose a slot for it to be aired
and it will be on the radio.
5.3 features and uses of market research
Market research is vital when setting up a business or preparing to sell a product. If you
don’t know the market you’re entering into it’s very likely you won’t find it easy to compete.
The way to conduct market research is to start by finding out who are your main competitors in
the market, so as an example if you were setting up a mobile phone company you may want to
look at O2 or EE. It’s important to think about what your competitors do well at as well as
thinking about what they could improve on. If a business can do well at the same things as its
competitors but at the same time offer something new and different then it’s likely to succeed.
5.4 value of a brand to an organisation
The brand of an organisation is it’s identity and it means everything. MacDonald’s,
Apple, Nike would never have been successful without those famous iconic brands and logos.
Your brand is what makes you as a company, because once a customer likes your brand they will
continue to come back to buy more from you. In our place of work we use our brand to promote
everything we do (Ruggie and Sherman III, 2017). At events we use mascots wearing the logo
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and also flags with the logo on. Our cars are all branded which all contributes to promoting us as
a radio station.
5.5 relationship between sales and marketing
Marketing helps generate sales leads then it’s the job of a sales team to execute the deal.
For example on Trax FM we might run a marketing campaign offering new customers a discount
in air time, that in turn will attract people to call our sales team and enquire about the deal which
hopefully the sales team will then be able to turn into revenue.
CONCLUSION
From the above chapter it can be articulated that enterprises should apply different
principles of business. In order to do so, it should go through many processes like product or
brand development (Wettstein, 2015). Further, an entity needs to understand how to apply new
approaches and techniques to gain maximum profits and shares in market. Funding and
budgeting also play important roles in this context. All these terms take a business to different
levels.
REFERENCES
Books and journals
Aaronson, S.A. and Higham, I., 2015. Putting the Blame on Governments: Why Firms and
Governments Have Failed to Advance the Guiding Principles on Business and Human
Rights. In Human Rights Protection in Global Politics (pp. 113-136). Palgrave Macmillan,
London.
Bonnitcha, J. and McCorquodale, R., 2017. The Concept of ‘Due Diligence’in the UN Guiding
Principles on Business and Human Rights: A Rejoinder to John Gerard Ruggie and John F.
Sherman, III. European Journal of International Law. 28(3). pp.929-933.
Sara Carter, E. and Jones-Evans, D., 2009. Enterprise and small business: Principles, practice
and policy. Strategic Direction. 25(5).
Mares, R. ed., 2011. The UN guiding principles on business and human rights: foundations and
implementation. Martinus Nijhoff Publishers.
Moreno, M., Lilley, D. and Lofthouse, V., 2015. Presenting the SCL Model: Adding value to
business strategy through UCD principles| Apresentando o Modelo SCL: Adicionando
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valor à estratégia comercial através dos princípios UCD. Revista D.: Design, Educação,
Sociedade e Sustentabilidade. 7(2). pp.84-104.
Ord, K., Fildes, R.A. and Kourentzes, N., 2017. Principles of Business Forecasting.
Reif, L.C., 2017. The UN Guiding Principles on Business and Human Rights and Networked
Governance: Improving the Role of Human Rights Ombudsman Institutions as National
Remedies. Human Rights Law Review. 17(4). pp.603-632.
Reinhardt, F.L., 2000. Down to earth: Applying business principles to environmental
management. Harvard Business Press.
Ross, R.G., 2003. Principles of the business rule approach. Addison-Wesley Professional.
Ruggie, J.G. and Sherman III, J.F., 2017. The Concept of ‘Due Diligence’in the UN Guiding
Principles on Business and Human Rights: A Reply to Jonathan Bonnitcha and Robert
McCorquodale. European Journal of International Law. 28(3). pp.921-928.
Wettstein, F., 2015. Normativity, ethics, and the UN guiding principles on business and human
rights: A critical assessment. Journal of Human Rights. 14(2). pp.162-182.
Online
What Are The Five Principles of Marketing? 2017. [Online]. Available through
<https://bizfluent.com/about-5084578-five-principles-marketing.html>
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