Principles of Business: Analyzing Markets, Innovation, and Finances

This report examines key principles of business, addressing various aspects crucial for success. Task 1 explores the characteristics of different business markets, including industrial, professional services, and financial services, and analyzes the interactions between businesses. It also covers the design of business goals influenced by market demands and legal obligations. Task 2 focuses on business innovation, examining its models, sources of support, product development processes, and associated benefits, risks, and implications. Task 3 delves into financial viability, emphasizing its significance, the consequences of poor financial management, and financial terminology. Task 4 discusses the uses and methods of budget management. Finally, Task 5 covers marketing principles, sales procedures, market research features, the value of a brand, and the relationship between marketing and sales, providing a comprehensive overview of business operations and strategies.

Principles of Business

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1. Explaining the characteristics of different business markets..................................................3
1.2 Explaining the nature of interactions between business within a market.............................3
1.3 Explaining the way a business goals may be designed by the market in which it operates..4
1.4 Legal obligation of business..................................................................................................4
TASK 2............................................................................................................................................4
2.1 Business Innovation..............................................................................................................4
2.2 The use of models of business innovation............................................................................4
2.3 Identifying the sources of support and guidance for business innovation............................5
2.4 Process of Product or service development..........................................................................5
2.5 The benefits, risk, and implication associated with innovation............................................5
TASK 3 ...........................................................................................................................................5
3.1 Explaining the significance of financial viability for an enterprise......................................5
3.2 Explaining the consequences of poor financial management...............................................6
3.3 Different financial terminology.............................................................................................6
TASK 4 ...........................................................................................................................................6
4.1 Uses of budget.......................................................................................................................6
4.2 Method or technique of managing budget............................................................................6
TASK 5............................................................................................................................................7
5.1 Principles of marketing.........................................................................................................7
5.2 Sales procedure.....................................................................................................................7
5.3 Explaining the features as well as uses of market research..................................................7
5.4 Explaining the way value of brand to an enterprise..............................................................7
5.5 Explaining the relationship between marketing and sales....................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
For smaller companies, the president, CEO, owner and principal are often the same
person. In legal terminology, the principal might be the party who gives legal authority for
another party called the "agent" to act on the principals' behalf. These principals can be
individuals, corporations or even government agencies.
TASK 1
1. Explaining the characteristics of different business markets
In addition to targeting specific types of consumers or segments of a particular
marketplace, businesses can tailor their products and services to different types of macro
marketplaces. Organisation can sell the same product or service differently in various markets by
modifying what you offer, your pricing, promotional strategies and distribution channels.
Industrial
The industrial market consists largely of companies transacting business in hard goods
such as machinery, materials, chemicals, vehicles and office furniture and supplies. The buyers
are often manufacturers; the sellers are known as suppliers.
Professional Services
Another subset of B2B is professional services, which consists of providing consulting or
delivery of business needs such as marketing, information technology, human resources, benefits
planning, management consulting and payroll. Some commercial services, especially those
involving information technology systems, include the sale of hard goods such as computers and
software (Swanson, 2018)
Financial Services
One area of the commercial services market with its own moniker is the group of
businesses selling financial services.
1.2 Explaining the nature of interactions between business 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
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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. This is an example of the way good
interactions between businesses can lead to great results for both parties.
1.3 Explaining the way a business goals may be designed by the market in which it operates
The organisational goals and objectives are designed according to the neds and demands
of consumer in the market. Setting goals is how you grow your company and achieve success.
The process of creating goals is influenced by many internal and external factors. To understand
the basics of developing effective corporate goals, you need to be familiar with the key factors
that shape effective goal setting. This will help you address the limitations and challenges that
can occur during goal development.
1.4 Legal obligation of 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 submit 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 (Yamazaki, 2018,)
TASK 2
2.1 Business Innovation
Innovation generally refers to changing processes or creating more effective processes,
products and ideas. For businesses, this could mean implementing new ideas, creating dynamic
products or improving your existing services. Innovation can increase the likelihood of your
business succeeding.
2.2 The use of models of 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.
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2.3 Identifying the 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
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 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 (Shaw-Mellors and Poole, 2018)
2.5 The benefits, risk, and implication 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. The risks can be your new
product is not accepted by the market your company becomes dependant on the new product or it
may take heavy investment with little reward if the product fails to be a success. The
implications of innovations can include 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 (Huang, Wang, Kua, Geng, Y.,
Bleischwitz and Ren, 2018)
TASK 3
3.1 Explaining the significance of financial viability for an enterprise
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.
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3.2 Explaining the consequences of poor financial management
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 its
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.
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. 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, £10,000 on a new member of staff, £40,000 thousand
on petrol expenses across the group and a further £20,000 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 (Schwenkenbecher, 2018)
4.2 Method or technique of managing 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. A budget can also change through out the year depending on profits, if your
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company have a large increase in profits you may be able to afford to increase 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. The best way to manage a budget is to constantly keep an eye on
what you’re spending a review your budget regularly.
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.The marketing mix is a crucial tool to help understand what the
product or service can offer and how to plan for a successful product offering. The marketing
mix is most commonly executed through the 4 P's of marketing: Price, Product, Promotion, and
Place. 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 Sales procedure
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.
5.3 Explaining the features as well as 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. Market research is considered as very effective tool that assist business entity in
recognising the needs or demands of consumer. The process of gathering, analysing and
interpreting information about a market, about a product or service to be offered for sale in that
market, and about the past, present and potential customers for the product or service; research
into the characteristics, spending habits, location and needs of companies clients (Kapferer and
Valette-Florence, 2018)
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5.4 Explaining the way value of brand to an enterprise
The brand of an organisation is it’s identity and it means everything. MacDonald’s,
Apple, Nike would never have been successful with out those famous iconic brands and logos.
Company brand is what makes you as a organisation, because once a customer likes particular
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. At events we use mascots wearing the logo and also flags
with the logo on. Our cars are all branded which all contributes to promoting us as a radio
station.
5.5 Explaining the relationship between marketing and sales
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
The report has concluded that it is essential for manager in an enterprise to facilitate
effective communication and facilitate negotiation. As this procedure or strategy will assist the
parties in exploring as well as capturing various business opportunities. Project has successfully
demonstrated the relationship between sales and marketing.
Assignment has provided various strategies that can be used by manager in a company
for managing budget.
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REFERENCES
Books and Journal:
Shaw-Mellors, A. and Poole, J., 2018. Recession, changed circumstances, and renegotiations: the
inadequacy of principle in English law. Journal of Business Law.
Yamazaki, K., 2018, January. Design Approach for Sanpoyoshi Principle and Case Study. In
International Conference on Intelligent Human Systems Integration (pp. 543-549).
Springer, Cham.
Swanson, D.L., 2018. Society, Business Values, and the Social Contract. In CSR Discovery
Leadership (pp. 27-68). Palgrave Macmillan, Cham.
Huang, B., Wang, X., Kua, H., Geng, Y., Bleischwitz, R. and Ren, J., 2018. Construction and
demolition waste management in China through the 3R principle. Resources,
Conservation and Recycling. 129. pp.36-44.
Schwenkenbecher, A., 2018. Why Business Firms Have Moral Obligations to Mitigate Climate
Change. In Disciplining the Undisciplined? (pp. 55-70). Springer, Cham.
Kapferer, J.N. and Valette-Florence, P., 2018. The impact of brand penetration and awareness on
luxury brand desirability:: A cross country analysis of the relevance of the rarity
principle. Journal of Business Research. 83. pp.38-50.
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