Business Principles Report: Market, Innovation, and Marketing Analysis

This report provides a comprehensive overview of key business principles, examining market characteristics, business innovation models, and marketing strategies. It delves into the nature of business interactions within markets, emphasizing how organizational goals are shaped by market demands. The report explores the meaning and application of business innovation, including sources of support, the product development process, and associated risks and benefits. Financial viability is discussed, along with the consequences of poor financial management and financial terminology. Budgeting techniques are explained, followed by a review of marketing principles, sales processes, market research, and the value of branding. The relationship between marketing and sales is also examined. The report uses the example of Mark and Spencer to illustrate the concepts discussed.

PRINCIPLES OF BUSINESS

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Characteristics of various business markets..........................................................................1
1.2 Nature of interaction between business within a market......................................................2
1.3 Organisation's goals may be shaped by the market...............................................................2
1.4 Describe the legal obligation of a business...........................................................................2
TASK 2............................................................................................................................................3
2.1 Meaning of business innovation............................................................................................3
2.2 Uses of models of business innovation.................................................................................3
2.3 Sources of support and guidance for business innovation....................................................3
2.4 Process of services or product development.........................................................................3
2.5 Risk, benefits and implications associate with innovation....................................................4
TASK 3............................................................................................................................................4
3.1 Importance of financial viability for an enterprise................................................................4
3.2 Consequence of poor financial management........................................................................4
3.3 Different financial terminology ............................................................................................5
TASK 4............................................................................................................................................5
4.1 Uses of budget.......................................................................................................................5
4.2 How to manage a budget.......................................................................................................6
TASK 5............................................................................................................................................6
5.1 Principles of marketing.........................................................................................................6
5.2 Explanation of sale process...................................................................................................7
5.3 Uses and features of market research....................................................................................7
5.4 Value of a brand to an organisation......................................................................................7
5.5 Relationship between marketing and sales...........................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9
.........................................................................................................................................................9

INTRODUCTION
Business is an economic activity, which is related with continuous and regular production
and distribution of goods and services for satisfying human wants. So the first principle of
business success is identifying the needs of the society and then directly or indirectly filling
those needs. In other words - either you with your services, your skills or your product filling a
need, or your broker, or somebody else who is producing the product and service to fill the need
(Anupindi and et. al., 2011). This report is based on Mark and Spencer is a multinational retail
company in worldwide. This project described about characteristics of business market and use
of business innovation model. Uses of budget and principles of marketing also determined in this
study. At last relationship between sales and marketing which is also shown in this assignment.
TASK 1
1.1 Characteristics of various 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. They’re 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
The business to business market is when one business simply sells it’s products to another
meanwhile the industrial market consists of companies transacting business in hard goods such
as machinery, materials, vehicles and supplies (Belohlavek, 2012). The most obvious business
market is the high street and depending on what you’re selling really depends on who your
customer is, if you set up shop in the right place and have the right product the high street can be
a fantastic place to make a living.
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1.2 Nature of interaction between business within a market
Nature of interaction: The interactions between businesses within a business market will
depend upon a variety of factors, including:
 Buying decisions:
 The buying process, and who participates in the buying process
 Influences upon buyers
 How businesses make their buying decisions
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 (Dlabay, Burrow and Kleindl, 2011). This is an example of how good interactions
between businesses can lead to great results for both parties.
1.3 Organisation's goals may be shaped by the market
Company's goal can be shaped according to the consumer requirement, for instance if
Mark and Spencer is selling different products but their potential buyers requires brown bread,
then the company is aspire to manufacture brown bread as it has been highly demanded by the
consumer. Thus Jackson are require to make such product that is highly demanded by the
consumer. If they want multi-grain bread, then the firm is liable to produce that bread
(Chesbrough, 2010). Their main goal is to give audience a reason to love their & enjoy their food
and they simply do that by shaping their objective as per buyer's demand or requirement.
1.4 Describe the legal obligation of a business
The most common business structures in the UK private sector include: Sole Trader: It is the simplest form of business structure and is relatively easy and
inexpensive to set up. As a sole trader business will be legally responsible for all aspects
of the company.
 Partnership: It is an arrangement in which two or more individuals share the profits and
liabilities of a business venture (Guitián, 2015). Various arrangements are possible: all
partners might share liabilities and profits equally, or some partners may have limited
liability.
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TASK 2
2.1 Meaning of business innovation
Business innovation is the creation of substantial new value for customers and the
company by creatively changing one or more dimensions of the business system. In other words,
business innovation is the creation and adoption of something new that generates business value.
This includes new products, services, or processes, such as integrated supply chain solutions
(Guitián, 2015). It is the creation of substantial new value for customers and the company by
creatively changing one or more dimensions of the business system.
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 (Cragg, 2012). Normally there are
three types of business innovation:
Industry Model Innovation: It mainly deals with industry transformation such as Jackson
combine with Virgin Atlantic.
Revenue Model Innovation: It deals with how effectively company manage its revenue or
profit so that they maintain sufficient working capital.
Enterprise Model Innovation: This means when a company integrates its business with other
company of same nature.
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 business can get support to get improve and grow its
business through ways of business innovation. Often local authorities also offer businesses help
to get going. Mark and Spencer offer a business start up plan which helps local people set up
their own innovative businesses.
2.4 Process of services or product development
Product or service development is the process by which an existing product or service is
improved or modified, or a new product or service is developed, to keep up with trends in the
marketplace and customer preferences and buying behaviours (Kamatali, 2011).
New Product Development (NPD) is described as going through eight stages:
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 Idea Generation:
 Idea Screening:
 Concept Development and Testing:
 Marketing Strategy and Development:
 Business Analysis:
 Product Development:
 Test Marketing:
 Commercialisation:
2.5 Risk, benefits and implications associate with innovation
Benefit: It includes increasing your profits, helping to personalise your services, finding
new business opportunities or even giving you an advantage over your competitors.
Risk: It can be in the form of acceptance of product or not by the target audience in the
market place (Jägers, 2011).
Implication: It includes the expense cost of creating new ideas or products, sometimes
small companies may even have to look at expanding to innovate and also resource’s play a huge
part, if you only have a small team of employees who’re all extremely busy then it makes it
practically impossible to innovate effectively (Koch, 2011).
TASK 3
3.1 Importance of financial viability for an enterprise
Financial viability: Financial viability is the ability of an organisation to generate or
attract sufficient income to meet its operating expenses and financial obligations and still have
sufficient funds for future growth.
Importance: 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.
3.2 Consequence of poor financial management
When 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
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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.
Consequence of poor financial management:
 Follow our steps to securing investment or making a successful loan application
 Make sure business books are in order know their tax responsibilities
 Consider invoice financing to solve cash flow issues
 Understand the business expenses and can claim back from HMRC
 Build a cash reserve so that company can cope with unexpected issues
3.3 Different financial terminology
Financial terminology’ is the language used by, for example, accountants and financial
institutions, and a good understanding of financial terms is necessary in business. Some of the
most important financial terms are to be found in the following:
Profit and Loss Account: This is also known as the “P&L”. This is the Profit and Loss statement
which is the same as the Income statement (Seck, 2011). P&L, Profit & Loss and Income
Statement can be used interchangeably.
Balance Sheet: A balance sheet is a financial statement that summarizes a company's assets,
liabilities and shareholders' equity at a specific point in time. These three balance sheet segments
give investors an idea as to what the company owns and owes, as well as the amount invested by
shareholders.
Cash flow Statement: In financial accounting, a cash flow statement, also known as statement of
cash flows, is a financial statement that shows how changes in balance sheet accounts and
income affect cash and cash equivalents, and breaks the analysis down to operating, investing
and financing activities (Koch, 2011).
TASK 4
4.1 Uses of 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. Since budgeting allows you to create a spending plan for your
money, it ensures that you will always have enough money for the things you need and the things
that are important to you (Thomson, 2012). Following a budget or spending plan will also keep
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you out of debt or help you work your way out of debt if you are currently in debt. Budgets often
allow companies to have a financial roadmap for business operations.
There are some uses of budget are as follow:
Track Expenses: It is easy to forget where business spent that extra money last month or
realize just how much they are spending on certain expenses. Budgeting allows to see these facts
in black and white.
Build Wealth: Plenty of people become millionaires without a budget, but most will not
stay millionaires without one.
4.2 How to manage a budget
Budget management is primarily concerned with monitoring and comparing actual
expenditure to date against planned expenditure for the same period in order to identify, analyse
and explain any positive or negative variances (Spitzer, 2013). There are certain points which
defines how to Mark and Spencer manage a budgets are as follows:
Step 1: Set Goals
Step 2: Calculate Your Income and Expenses
Step 3: Analyse Your Spending and Balance Your Chequebook
Step 4: Revisit Your Original Budget
Step 5: Commitment
Step 6: Wants vs. Needs
Step 7: Seasonal Expenses
TASK 5
5.1 Principles of marketing
Marketing involves a range of processes that are used to find out what customers want,
these are known as the 4ps (4P's of marketing mix. 2018). 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 (Lindsey and Pate, 2013). The marketing mix helps
you find and convince potential buyers to make a purchase so you turn a profit and grow your
company.
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5.2 Explanation of sale process
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 (Endtorff, 2012).
In the business, our process starts with meeting the different needs of potential buyers as
per their requirement. If the customer is happy then only they manufacture next slot. Their sales
also include home-delivery services.
5.3 Uses and features of market research
Market research may be quantitative or qualitative, and market research is a key element
in ensuring that an organisation has a clear marketing focus in everything that it does in order to
meet the needs and expectations of customers (Guitián, 2015).
Features and uses of market research include:
 Uses statistics and statistical analysis
 Is a continuous process
 Used as a decision-making tool
5.4 Value of a brand to an organisation
A brand represents the sum of people’s perception of a company’s customer service,
logo, reputation and advertising. Following are the importance of Branding:
 United: Branding links your name, logo, online presence, product/services and appeal to
the masses. Make marketing skills consistent and the content the same across all
channels.
 Sales: Speaking of sales, branding will create sales and revenue for your business.
 Trust: As customers get to know your business they will begin to trust you. In order to
build trust you must give customers a reason to test you out.
5.5 Relationship between marketing and sales
The 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
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with leads before handing them off to Sales (Broklyn, 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.
CONCLUSION
As per the above report it can be stated that, in order to achieve company's objective
effectively, they are require to shape themselves according to the dynamic changes so that they
can easily fits in them. Also the company is require to be financially viable which gives them the
advantage of higher competitiveness over their rivals.
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REFERENCES
Books and journals
Anupindi, R. and et. al., 2011. Managing business process flows: principles of operations
management. Pearson Higher Ed.
Belohlavek, R., 2012. Fuzzy relational systems: foundations and principles (Vol. 20). Springer
Science & Business Media.
Dlabay, L., Burrow, J. L. and Kleindl, B., 2011. Principles of business. Cengage Learning.
Guitián, G., 2015. Service as a bridge between ethical principles and business practice: A
Catholic Social Teaching perspective. Journal of Business Ethics. 128(1). pp.59-72.
Jägers, N., 2011. UN Guiding Principles on Business and Human Rights: Making Headway
towards Real Corporate Accountability?. Netherlands Quarterly of Human Rights.
29(2). pp.159-163.
Koch, R., 2011. The 80/20 principle: the secret to achieving more with less. Crown Business.
Lindsey, W. and Pate, L., 2013. Integrating principle-centered leadership into the business
curriculum: lessons from the LMU experience. Journal of Executive Education. 5(1).
p.3.
Porter, L. and Tanner, S. eds., 2012. Assessing business excellence. Routledge.
Rendtorff, J.D., 2012. Business Ethics, Strategy and Organizational Integrity: The Importance of
Integrity as a Basic Principle of Business Ethics That Contributes to Better Economic
Performance. In Handbook of Research on Teaching Ethics in Business and
Management Education (pp. 274-288). IGI global.
Wu, Z. and Pagell, M., 2011. Balancing priorities: Decision-making in sustainable supply chain
management. Journal of Operations Management. 29(6). pp.577-590.
Online
4P's of marketing mix. 2018. [Online]. Available through:
<https://www.marketing91.com/marketing-mix-4-ps-marketing/>.
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