Business Principles: Market, Innovation, Finance, Marketing

This report delves into fundamental principles of business, encompassing various crucial aspects. It begins by exploring different market types, including B2B and consumer markets, and the significance of environmental scanning. The report then examines innovation, distinguishing it from creativity and highlighting its benefits, along with the process of product development. Furthermore, it addresses the role and importance of finance, emphasizing financial planning, management, and accounting practices. Finally, the report covers marketing principles, including target marketing, the marketing mix, sales strategies, and the evolving relationship between sales and marketing. The report is a comprehensive overview of key business areas.

Principles of
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1...........................................................................................................................................1
1.2...........................................................................................................................................1
1.3...........................................................................................................................................2
1.4...........................................................................................................................................2
TASK 2............................................................................................................................................2
2.1...........................................................................................................................................2
2.2...........................................................................................................................................3
2.3...........................................................................................................................................3
2.4...........................................................................................................................................3
2.5...........................................................................................................................................4
TASK 3............................................................................................................................................4
3.1...........................................................................................................................................4
3.2...........................................................................................................................................5
3.3...........................................................................................................................................5
TASK 4............................................................................................................................................5
4.1...........................................................................................................................................5
4.2...........................................................................................................................................6
TASK 5............................................................................................................................................6
5.1...........................................................................................................................................6
5.2...........................................................................................................................................6
5.3...........................................................................................................................................6
5.4...........................................................................................................................................7
5.5...........................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
This assignment and the various activities within it, introduce you to the principles of
business: key skills are explored that will enable you to confidently tackle these elements of your
role or future role as a line manager (Addo, 2014). The activities will require you to consider
theories and ideas that align with each topic but, importantly, you will be expected to make
parallels with your own experience in the workplace, which will help in ensuring that you can
lead and manage your team effectively.
TASK 1
1.1
All businesses market their products and services, albeit there will be differences in the
way each business approaches their market(s). The differences will principally depend
on what their product or service comprises and the type of buyer they wish to attract.
The main types of market include:
Business-to-Business (B-2-B or B2B) Market: The business-to-business market is one in which
businesses sell to other businesses, rather than to consumers. For example, an accountant
specialising in business accounts will be operating in a B2B market. They might also operate
in a consumer market if they have a department that deals with private tax affairs.
Consumer Market: A consumer market is one in which products and services are sold by
businesses to consumers. This type of business market has the most transactions because of the
massive numbers of consumers. Examples include supermarkets and cafés.
Service Market: A service market is one in which a business sells its services directly to
individual consumers. Examples include IT maintenance and hairdressers (Backer, L2015). A
consumer may purchase a product in conjunction with the service.
1.2
B2B interaction is usually protracted because of a tendency to have many more people
involved in the purchasing decisions than is the case in business to consumer markets.
Consequently, there can be a greater emphasis on developing a long-term relationship based on
mutual trust. This tends to result in high levels of brand loyalty and repeat sales. Much of the
initial contact in B2B is done via trade publications, trade exhibitions and conferences as well as
through the Internet. Similar routes to market are used for advertising and developing brand
awareness. Account managers and sales representatives tend to look after the relationship
1

management between business customers and will seek to keep customers informed of
improvements to product or service range and offerings. After sales service will account for a lot
of interaction as maintaining the satisfaction of the business client is fundamental to repeat and
additional sales.
1.3
To be effective, businesses need to have goals. They set out what they want to achieve
and in what markets ( Choudhry, Cummins and Plenderleith, 2012). However, it is often not until
the plan to achieve the goals is put into action that discoveries can be made that require changes
to the plan or changing of the goals. That is where successful and responsive businesses get
significant advantage: they are constantly examining the market and looking ahead to change
their offerings and associated goals based on what the market wants or needs, or because the
have changed due to, for example, changes in legislation or economic circumstances, etc. The
more agile a business is in responding to the market and realigning its goals, the better its
chances of capitalising on market demands. The process of constantly looking outwards to detect
changes in market conditions and requirements is known as Environmental Scanning). A useful
framework for structuring analysis of the marketplace is the PESTLE framework.
1.4
Whilst managers are not expected to be experts in the law, they are required to ensure
that they and their staff conform to all relevant current legislation affecting the business
of their company or organisation. There is a huge raft of legal obligations that need to
be met, in a wide range of business areas (Dlabay, Burrow and Kleindl, 2011). It is worth saying
that the Internet has made
access to the relevant Acts easier than it has ever been and when facing decisions that
require some knowledge or insight into the law then it is always best to read the source
document 1 that is, the relevant Act. Similarly, there is no substitute for qualified legal
advice and that should be sought wherever needed.
TASK 2
2.1
In any study of management, it is important to establish a set of definitions for relevant
concepts. For a study of innovation, we need to know what we mean by, innovation.
However, it is also important to understand the distinction between innovation and
2

creativity. Innovation:
1. The introduction of something new.
2. A new idea, method, or device (Britannica)
Successful exploitation of new ideas ( (UK Government)
Creativity:
The ability to make or bring into existence something new, whether a new
solution to a problem, a new method or device, or a new artistic object or form(
(Britannica)
2.2
The essence of generating new ideas is to develop skills in looking at things from new
perspectives (Fasterling and Demuijnck, 2013). A useful model for structuring your approach is
the 4Cs of Creativity and
Innovation, which sits within the overall process of creativity in the workplace:
Ideas Generation ! the 4 Cs
Challenge assumptions: Challenge the rules and assumptions being applied
Communicate differently: Find an alternative way of describing the issue
Compare: Look at other areas where a similar issue or benefit is seen
Connect: Make connections and links between the issue and other contexts, other applications,
and/or random items.
2.3
Company research and development (R&D) professionals and accountants will want to
ensure that their businesses are making full use of the extensive range of government support
available for businesses undertaking R&D and innovation (Gong and Janssen, 2012). This
support helps companies to develop the new products and services they need to remain
competitive and grow.
2.4
Process of product development
 Idea generation
 Idea evaluation
 Strategic analysis
 Product development and testing
3

 Market testing
 Commercialisation
 Product launch
2.5
BENEFITS OF INNOVATION
Improved productivity & reduced costs
A lot of process innovation is about reducing unit costs. This might be achieved by improving
the production capacity and/or flexibility of the business – to enable it to exploit economies of
scale (Ord and Fildes, 2013).
Better quality
By definition, better quality products and services are more likely to meet customer needs.
Assuming that they are effectively marketed, that should result in higher sales and profits
Building a product range
A business with a single product or limited product range would almost certainly benefit from
innovation. A broader product range provides an opportunity for higher sales and profits and also
reduces the risk for shareholders
TASK 3
3.1
Role and Importance of Finance
Finance is important to an organisation as the firm has to know how viable it is and balance
profit with costs (Pitas and Venetsanopoulos, 2013).
The Role of the Finance Department can be summarised:
Prepare and create financial accounts – such as Trading, Profit and Loss Account and the
Balance Sheet.
Keep and maintain financial records – sales figures and records of expenditure would be held by
the Finance department and used by other departments also.
Prepare and plan internal financial information – this would mainly be performed in the case of a
budget, which is a financial plan and can help managers take corrective action.
4

3.2
Poor financial management is patchy financial planning, chaotic bookkeeping, over
investment (buying too much too early), and lacking any reserves (Ruggie and Sherman, 2015).
The latter could see your business flounder as soon as you need to make an unexpected outlay or
you have a quiet period. The consequences of poor financial management for your business are
clear: you may struggle to pay your bills, get into debt, and eventually be forced to shut your
business down.
Follow these steps to securing investment or making a successful loan application
 Make sure your books are in order and you know your tax responsibilities
 Consider invoice financing to solve cash flow issues
 Understand the business expenses you can claim back from HMRC
 Build a cash reserve so that you can cope with unexpected issues
3.3
 Accounting Close: This is when the “books” are closing and the numbers are being
tabulated in the financial statements for the prior period. Normally this happens in the
first week of the month.
 Accrual: An estimate intended to capture the cost of a good or service in the absence of
an invoice.
 Audit: To review and verify the accuracy of financial records as well as validating
methods used to calculate financial records.
TASK 4
4.1
 Track Expenses: It is easy to forget where you spent that extra money last month or
realize just how much you are spending on certain expenses (Santoro, 2012). Budgeting
allows you to see these facts in black and white.
 Set limits: Budgeting allows you to set limits on your spending. A budget helps you
determine how much money you should have going out each month based on how much
income you have coming in each month.
 Reach goals: Without a budget, you have no way of really knowing where each penny is
going each month
5

 Build wealth: Plenty of people become millionaires without a budget, but most will not
stay millionaires without one. In order to build personal or business wealth, use a budget
to save money.
4.2
 Monitor, control, and record all the finances (income and expenditure),
 Know how to minimise costs in the areas that you are responsible for,
 Be able to investigate or identify problematic areas and rectify them, and
 Efficiently manage and authorise expenditures (Spitzer, 2013).
TASK 5
5.1
Like other business functions, marketing is an ongoing process driven by core principles
such as identifying and targeting the right customer markets, preparing an effective marketing
mix, creating high-impact messages and building a consistent image (Vom Brocke and et. al.,
2014).
 Target Marketing
 The Marketing Mix
 Creative and Influential Messages
 A Consistent Brand Image
5.2
 Product Knowledge
 Prospecting
 Approach
 Needs Assessment
 The Presentation
 The Close
 Follow-up
5.3
Features of Marketing Research:
 Continuous process
 Wide scope
 Aid to decision-making
6

 Uncertainty of conclusions
 Applied research
 Commercial intelligence
 Statistical tools
5.4
A common misconception is that branding is simply a logo or slogan. Although these
elements are a key part of it, it does, however, go far beyond this. Branding involves every
aspect of a customer’s experience, from your logo to your website, your social media posts, staff
uniforms and advertising; it even encompasses the way in which you answer the phone to how
you interact with customers (Wettstein, 2015). In short, branding is the way in which your
customer perceives you when they hear or think of your company name, service or product. This
includes everything they think they know about your brand, including factual information, such
as your bright yellow packaging, but also emotive elements, like for example that it’s luxurious.
5.5
he relationship between Sales and Marketing has changed drastically in recent years, and
it is crucial that these two groups collaborate effectively. Marketing is holding onto leads much
longer than ever before, and they are focused on developing and nurturing relationships with
leads before handing them off to Sales (Backer, 2015). Also, more and more marketing
organizations are bringing inside sales (or lead qualifiers) into the Marketing organization – a
role that used to sit within sales. By holding onto leads longer, Marketing is making it easier for
the Sales team to connect with the customer. Reducing the number of cold leads and increasing
the number of warm leads makes the process of closing deals faster for the Sales team. Also,
having an effective Sales team which can close the deals effectively generates revenue and
ensures that the Marketing team’s efforts are not wasted. It is important that your Sales and
Marketing teams value one another, and recognize the potential they have when working
together. It is all about balance, and marrying the different talents of Sales and Marketing creates
an effective partnership for generating growth.
CONCLUSION
From the above given information, it can be summarised that different factors exist in
business environment affect the goals and end objectives of an enterprise. In order to execute in
an effective manner it is very important that an enterprise should have adequate amount of funds.
7

REFERENCES
Books & Journals
Addo, M.K., 2014. The Reality of the United Nations Guiding Principles on Business and
Human Rights. Human Rights Law Review. 14(1). pp.133-147.
Backer, L.C., 2015. Moving Forward the UN Guiding Principles for Business and Human
Rights: Between Enterprise Social Norm, State Domestic Legal Orders, and the Treaty
Law That Might Bind Them All. Fordham Int'l LJ. 38. p.457.
Choudhry, M., Cummins, J. and Plenderleith, I., 2012. The principles of banking. New York:
Wiley.
Dlabay, L., Burrow, J.L. and Kleindl, B., 2011. Principles of business. Cengage Learning.
Fasterling, B. and Demuijnck, G., 2013. Human rights in the void? Due diligence in the UN
guiding principles on business and human rights. Journal of Business Ethics. 116(4).
pp.799-814.
Gong, Y. and Janssen, M., 2012. From policy implementation to business process management:
Principles for creating flexibility and agility. Government Information Quarterly. 29.
pp.S61-S71.
Ord, K. and Fildes, R., 2013. Principles of business forecasting. Cengage Learning.
Pitas, I. and Venetsanopoulos, A.N., 2013. Nonlinear digital filters: principles and
applications (Vol. 84). Springer Science & Business Media.
Ruggie, J.G. and Sherman III, J.F., 2015. Adding Human Rights Punch to the New Lex
Mercatoria: The Impact of the UN Guiding Principles on Business and Human Rights
on Commercial Legal Practice.
Santoro, M.A., 2012. Sullivan Principles or Ruggie Principles? Applying the Fair Share Theory
to Determine the Extent and Limits of Business Responsibility for Human
Rights. notizie di Politeia. 28(106). pp.171-179.
Spitzer, F., 2013. Principles of random walk (Vol. 34). Springer Science & Business Media.
Vom Brocke, J. and et. al., 2014. Ten principles of good business process management. Business
process management journal. 20(4). pp.530-548.
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.
8