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Finance, Marketing, Operations - Coggle Diagram

- - - - Analysis
      - Interpretation
      - Evaluation of Financial Records
    - - Operation
      - Growth
      - Achieving Goals and Objectives
        
        Goals include:
        
        Increase dividends to shareholders
        
        Maintain an environmentally friendly business
        
        Become a market leader within five years
  - - - The ability for a business to maximise its profits
        
        :arrow_up: COGS
    - - The ability for a business to increase its size in the long term
    - - The ability for a business to use its resources effectively in ensuring financial stability and profitability
        
        :arrow_down: costs
        :arrow_up: profits with :arrow_down: level of assets
    - - The extent to which a business can meet its financial commitments in short term
      - Liquid
        
        Cash or current assets that will soon be cash
    - - The extent which the business can meet its financial commitments in the long term
      - Gearing
        
        Tells you how much debt (or leverage) its operations are compared to the use of equity finance
    - - Short
        
        Includes:
        
        Operational Plans
        
        Day to day
        
        Tactical Plans
        
        One to two years
        
        Reviewed regularly
      - Long
        
        Strategic Plans
        
        5 years
        
        Examples
        
        :arrow_up: Profits and Market
        
        Reviewed Annually
  - - - Operations
        
        To purchase Inputs
        
        Pay for Transformation Processes
      - Marketing
        
        Funds to Undertake Promotion
      - Human Resources
        
        Funds to Pay Staff
        
        Assesses Effectiveness of Work Force
- - - - A business plans out the finance required, the proposed sources of finance and a range of financial statements
      - Financial planning determines how a business' goals will be achieved
    - - Determined by the capacity to source finance and the management team skills for assessing financial needs
        
        Used to help seek finance/determine financial needs
        
        Balance Sheets
        
        Income Statements
        
        Cash flow statements
    - - Provide information in facts and figures about requirements to achieve a particular purpose
      - Preparing a cash budget enables a business to predict cash shortages
        
        Cash required for future plans
        
        Cost of capital expenditure and other expenses in comparison to the revenue and earning capacity of the business
        
        Estimated use and cost of inventory
        
        Number and labour hours required for production
      - Types
        
        Operating
        
        Those related to the main activities of a business
        
        Examples
        
        Sales
        
        Production
        
        Labour
        
        Expenses
        
        Raw Materials
        
        COGS
        
        Project
        
        Relate to capital expenditure and Research and Development
        
        Financial
        
        Relate to the financial data of a business
        Include the:
        
        Income Statement
        
        Balance Sheet
        
        Cash Flow
    - - Mechanisms employed by businesses to ensure that data become released and the information provided by the record systems are accurate, reliable, efficient, and accessible
      - Double entry system; recording all items twice to minimise errors
    - - Financial risk is the risk to a business of being unable to cover financial obligations, such as debt that a business incurs through borrowings
    - - The policies and procedures that ensure that the plans of a business will be achieved in the most efficient way
      - Financial Problems Include:
        
        Theft
        
        Damage/Loss of Assets
        
        Fraud
        
        Errors in Record
    - - Debt Finance
        
        Is a liability to a business as it is money owed to external sources
      - Equity Finance
        
        Relates to the internal sources of finance in the business
      - Advantages vs Disadvantages
        
        Debt
        
        Advantages
        
        Funds readily available
        
        Increased funds should lead to increased earnings and profits
        
        Be acquired at short notice
        
        Interest payments are tax-deductible
        
        Flexible payments periods and types of debt are available
        
        It will not dilute the current ownership in the business
        
        Disadvantages
        
        There is an increased risk if debt comes from financial institutions because investment bank charges and government charges may increase
        
        Security is required by business
        
        Regular repayments
        
        Lenders have first claim on any money if the business ends in bankruptcy
        
        Equity
        
        Advantages
        
        Does not have to be repaid unless the owners leaves the business
        
        Cheaper than other sources of finance (no payments)
        
        The owners who have contributed to the equity retain control over how finance is used
        
        Disadvantage
        
        Lower profits and lower returns for owners
        
        The expectation that the owner will have about the return on investment
        
        Ownership is diluted
      - Debt versus Equity
        
        Debt
        
        Lenders have prior claim in the event of liquidation
        
        Debt must be repaid by periodic repayments
        
        Interest payments are tax deductible
        
        Lenders usually require a lower rate of return
        
        Interest payments are fixed
        
        Debt provided have no voting rights
        
        Equity
        
        Shareholders have a residual claim on assets
        
        Equity has no maturity date
        
        Dividends are not tax deductible
        
        Shareholders require higher return due to higher risk
        
        Dividend payments are not fixed and may be reduced through
        lack of funds
        
        Equity holders have voting rights
    - - Terms, flexibility and availability of finance
      - Cost of each source of funding
      - Structure of the business
      - Level of control maintained by the business
  - - - Business uses accounting information to monitor and control the business functions
    - - Income Statement + Balance Sheet
        
        Income Statement (Revenue Statement)
        
        Operating income such as sales of inventory and services plus other earning from interest and dividends
        
        Operating income such as the:
        
        Purchase of Inventory
        
        Payment of Services
        
        Other Expenses
        
        Rent
        
        Advertising
        
        Insurance
        
        Sales
        
        COGS
        
        Opening Stock + Purchases
        
        Closing Stock
        
        Gross Profit
        
        Expenses
        
        Net Profit
        
        Balance
        
        Assets
        
        Current Assets
        
        Cash
        
        Accounts Receivables
        
        Inventory
        
        Non-current Assets
        
        Plants
        
        Equipments
        
        Buildings
        
        Liabilities
        
        Current Liabilities
        
        Accounts Payable
        
        Overdraft
        
        Short Term Loans
        
        Non-current Liabilities
        
        Mortgages
        
        Long Term Loans
        
        Debentures
        
        Owner's Equity
        
        Retained Profits
      - Predict a business' status
        
        Show whether a firm can generate a suitable cash flow, pay financial commitments, have sufficient funds for future expansion
        
        Records
      - Records movement of cash receipts and payments
        
        Cash receipts
        
        Credit sales
        
        Cash sales
        
        Other income (return on investments)
        
        Cash payments
        
        Payments for stock
        
        Expenses
        
        Non-operation expenses
  - - - Current Ratio
        
        2:1
    - - Debt to Equity
        
        60%
    - - Gross Profit
        
        30%
      - Net Profit
      - Return on Equity
        
        20%
    - - Expense Ratio
      - Accounts
      - Receivable Turnover
        
        < 14
    - - Identifies areas for improvements, while financial ratios are useful for financial management when used comparatively
        
        Over Different Time Periods
        
        Compare current results with past perfromance
        
        Against Standards
        
        Against standards
        
        Example
        
        Benchmarks (Australian or Global Standards)
        
        With Similar Business
  - - - Process of removing one time influence from the balance sheet to show the true earnings of a company
        
        Example
        
        Removal of a land site
        
        it would achieve :arrow_up: capital gain
    - - Process of adding capital expense to the balance sheet that is regarded as an asset rather than an expense
        
        Examples
        
        Research and Development
        
        Development Expenditure
    - - Process of estimating the market value of assets or liabilities. These valuations can be used in a variety of contexts for a business
      - including:
        
        Investment Analysis
        Mergers
        Acquisitions
        Financial Reporting
        
        Historical Value
        Value of Intangibles
    - - A record over one year may not be a true representation due to fluctuation issues actual accounting (order), cash based accounting
    - - Financial reports do not have the capacity to disclose specific information about debt repayments
      - May provide a more favourable outcome to the business at that time than is accurate
    - - Report details and additional information that are left out of the main reporting documents
    - - Auditors
        
        By auditing financial reports, an independent person is checking the accuracy of your account
      - Businesses have an ethical and legal obligation to comply with GST reporting requirements
      - Accuracy is for taxation and stakeholder purposes
      - Inappropriate asset valuations, hidden expenses and liabilities, fictitious revenues
- - - - The movement of cash in and out of the business over a period of time
        
        Identifies patterns/potential problems can be used to construct a cash flow projection - future cash forecasts
    - - Definition
        
        Record actual cash inflows and outflows over a period of time
      - Determines a firm's ability to pay its debt on time + identifies trends that can be used to predict change
      - People with interest
        
        Creditors
        
        Owners
        
        Lenders
        
        Shareholders
    - - Definition
        
        Involves the business spreading expense payments throughout the year so cash shortfalls do not occur
      - Types
        
        Instalments
        
        Paying on due date
        
        Prepay expenses
    - - Involves offering creditors a discount for making payments before due date
    - - Definition
        
        Factoring is the selling of accounts receivable for a discounted price to a factoring (or finance) company
      - Immediate funds but won't receive full amount
  - - - Working capital refers to funds available for the short-term financial commitments of a business
      - Equation
        
        Working Capital
        
        Current Assets - Current Liabilities
        
        The control of these is called working capital management
    - - Cash
        
        Definition
        
        Money in the hands of the company and ensures the business can repay its debts, loans, and accounts in the short term
        
        Cash surplus (excess) should be avoided, they should be used to grow the business or invested to earn interests
      - Receivables
        
        Definition
        
        Work that has not been payed for yet by customers
        
        Sending customer's statements monthly by debtors know when to expect accounts
        
        Following up on unpaid accounts
        
        Specifying a pay period
      - Inventories
        
        Too much inventory/ slow-moving inventory will lead to cash shortage
        
        Insufficient inventory on popular items may lead to a loss of customers
        
        Inventory is a cost of the business if it remains unsold
        
        Too much, unnecessary expenses
        
        Inventory turnover must be sufficient to generate cash to pay for purcahses and pay suppliers on time so that they will be willing to give credit in the future
    - - Definition
        
        Minimising the costs related to a firm's current liabilities is an important part of the management of working capital
      - Being able to convert current assets into cash to ensure business' creditors are paid
      - Types
        
        Payables
        
        Holding back accounts payable until due date
        
        Cheap means to improve a firm's position
        
        Result of some suppliers allowing a period of interest free trade credit before requiring payment for purchased goods
        
        Take advantage of discounts offered by creditors
        
        Loans
        
        Costs for establishment, interest rates, and ongoing charges must be investigated and monitored to minimise costs
        
        Alterative sources of funds from different banks and financial institutions
        
        Overdrafts
        
        Require regular payments - keeping fees, establishment fees and interest
        
        Businesses should have a policy for using and managing bank overdrafts and monitor budgets on a daily or weekly basis so that cash suppliers can be controlled
    - - Leasing
        
        Definition
        
        The hiring of an asset from another person or company who has purchased the asset and retains ownership of it
        
        Frees up cash (opposed to buying)
        
        :arrow_up: working capital
        
        Regular fixed payments
      - Sale and Lease Back
        
        Selling of an owned asset to a lessor and leasing the asset back through fixed payments for a specified number of years
        
        :arrow_up: liquidity
        
        Cash is then used as working capital
  - - - Profit = Total Revenue - Total Costs
    - - Fixed and Variable
        
        Fixed
        
        Costs of production that stays the same regardless of the level of output
        
        Examples
        
        Salaries
        
        Rent
        
        Lease Payments
        
        Insurance Premiums
        
        Interest Payments on Loans
        
        Variable
        
        Costs of production that varies depending on the level of output
        
        Examples
        
        Advertising Expenses
        
        Warehousing Storage Costs
        
        Transportation Costs
        
        Phone Bills
      - Cost Centres
        
        Departments of a business to which costs can be directly attributed
        
        Managers of cost centres are then given budgets and are held accountable for costs that they incur
      - Expense Minimisation
        
        Process of reducing costs in an effort to increase profitability
    - - Marketing Objectives
        
        Increasing Market Share
        
        Expanding the Product Mix
        
        Improving Customer Service
        
        Geographical Expansion
      - Ways of Doing So
        
        Goal Setting
        
        Reporting System
        
        Discounting fares
  - - - Definition
        
        Foreign rate is the ratio of one currency to another
      - Appreciation vs Depreciation
        
        Appreciation
        
        Exporters
        
        Reduced the international competitiveness of Australian businesses who exports
        
        Due to exports becoming more expensive to overseas buyers
        
        $Foreign < $Aus
        
        Importers
        
        $AUS > $Foreign
        
        Australian businesses have improved buying
        
        Depreciation
        
        Exporters
        
        $Foreign > $AUS
        
        :arrow_up: international competitiveness of business who exports
        
        Due to exports becoming less expensive to overseas buyers
        
        Importers
        
        $AUS < $Foreign
        
        Australian businesses have less power as prices of imports :arrow_up:
    - - Advantages vs Disadvantages
        
        Advantages
        
        Cheaper
        
        Repayments :arrow_down:
        
        Appreciation makes interest on repayments cheaper
        
        Fewer Restrictions
        
        Disadvantages
        
        Interest could :arrow_up: making repayments for expensive
        
        Depreciation of AUD makes interest repayments more expensive
        
        Repayments are affected by overseas economic management and cycle
    - - Payment in Advance
      - Letter of Credit
      - Bill of Exchange
      - Clean Payment
    - - International payment whereby the seller does not ship the product until it is received payment from the buyer
      - Advantage vs Disadvantage
        
        Advantage
        
        No risk to server
        
        Disadvantage
        
        Very few buyers will agree
    - - Definition
        
        A method whereby the bank gurantees payment on behalf of a buyer as long as seller meets conditions laid out in the letter
      - Requires payment prior to sending the good
      - Advantage vs Disadvantage
        
        Advantage
        
        :arrow_down: Risk of non-payment for sellers
        
        :arrow_down: Risk of non-delivery to buyer
        
        Disadvantage
        
        Buyer's bank will take a commission
    - - When buyers buys a product on credit (from server)
      - The buyer does not pay the seller until after product has been received
      - Advantage vs Disadvantage
        
        Advantage
        
        No risk to buyer
        
        Sellers can't take out insurance to protect themselves from:
        
        Non-payment
        
        Damage
        
        Transit
        
        Theft
        
        Disadvantage
        
        :arrow_up: risk for seller potential of no payment
        
        Need to be trustworthy
    - - Involves acting as an intermediary for buyer and seller
        
        A document issued by the seller to the buyer, ordering that the buyer pays a specified amount at a specified time to the bank
        
        When bank is satisfied that the seller has shipped the goods (sighting shipping documentation_ it transfers that money toe the seller
      - Advantages vs Disadvantages
        
        Advantage
        
        Guaranteed Payment
        
        Guaranteed Receival of Goods
        
        Disadvantage
        
        Bank as an intermediary costs both seller and the buyer
    - - Definition
        
        Process of minimising risk of currency fluctuations
      - Establish Offshore Subsidiaries
      - Arrange import payments and export receipts denominated in the same foreign currency -> losses from exchange rates will be offset by gains from the other
      - Put money in the other country
    - - Simple financial instruments that can be used to lessen the exporting risks associated with currency fluctuation
        
        Forward Exchange Contract
        
        Contract to exchange one currency for another at an agreed exchange rate on a future date after 30, 70, 180 days
        
        Options
        
        Gives the buyer the right -not obligation- to buy/sell foreign currency in the future
        
        Currency Swap
        
        Agreement to exchange currency in the sport market with an agreement to reverse transaction in future
- - - - Definition
        
        Owner's Equity
        
        Funds contributed by owners or partners to establish and build the business
        
        Funds provided by the owners of the business (finance) or from the outcomes of business activities
      - Retained Profits
        
        Profit from business that is left over after taxation and dividend payments have been made.
        
        Sales of Assets
    - - Debt
        
        Short-term Borrowing
        
        Overdraft
        
        Allows a business to overdraw their account to an agreed limit for a specified time
        
        Commercial Bills
        
        Type of bill exchange (loan) issued by an institute other than banks
        
        30 - 180 Days
        
        Cheapest
        
        Factoring
        
        The selling of accounts receivable for a discounted price to a finance or factoring company
        
        Long-term Borrowing
        
        Mortgage
        
        Loan secured by the property of the borrower (business)
        
        The property asset becomes the security for the repayment
        
        Debenture
        
        Issued by a company for a fixed rate of interest and for a fixed period of time
        
        Usually secured to a specific asset, interest fixed
        
        Debentures can be sold; no rights to a business
        
        Unsecured Notes
        
        A loan for a set period of time but is not back by any collateral or assets
        
        :arrow_up: Interest rates due to :arrow_up: Risk
        
        Leasing
        
        Money paid for the use of equipment that is owned by another party
        
        Financial Lease
        
        Leasor purchases on behalf of leasee
        Life of asset, 3 - 5 years
        
        Examples
        
        3 more items...
        
        Operational Lease
        
        Assets leased for a short period of time
        (Shorter than Life of Asset)
        
        Owner Carries Maintenance
        
        Can be cancelled without penalty
        
        Advantages vs Disadvantages
        
        Advantages
        
        Long term financing without :arrow_down: control/ownership
        
        Repayments and tax deductions fixed
        
        Payments include maintenance, insurance and finance costs
        
        Disadvantages
        
        Cannot use a leased asset as security for other loans
        
        :arrow_up: interest
    - - Definition
        
        Money raised by issuing shares
      - Ordinary Shares
        
        Definition
        
        Sold through Australian Stock Exchange (ASX)
        
        Types
        
        New Issues
        
        A security issued and sold for the first time
        
        Examples
        
        Primary Shares
        
        New Offerings
        
        Rights Issues
        
        The privilege granted to shareholders to buy more shares in the same company at a special price
        
        Placements
        
        Involve directly selling shares to a limited number of investors, rather than through public offering
        
        Additional Shares are offered at a discount
        
        Specific Example
        
        NAB recently offered an allotment of shares to existing shareholders at a discount price
        
        Share Purchase Plan
        
        An offer to existing shareholders in a listed (public) company the opportunity to purchase more shares (up to a maximum of $5000) in that company without brokerage (commission) fees
        
        Can be offered at a discount
        
        Private Equity
        
        Definition
        
        Sale of shares to raise finance for a private company
        
        Benefits
        
        Businesses can raise finance without increasing level of debt
        
        Benefits of being a private company including
        Limited Liability
        
        Financial Institutions
        
        Banks
        
        Main source of finance for businesses
        
        Since 2008 - 2009 global financial crisis, banks are more cautious; loans only provided with an accepted level of risk
        
        Investment Banks
        
        Banks that specialise in trading money, securities, and others
        
        Financial requirement to large corporations
        
        Arranges long term finance
        
        Advisor on mergers and takeovers
        
        Arranges overseas finance
        
        Examples
        
        Commonwealth Private
        
        JP Morgan
        
        Deutscher
        
        Financial Companies
        
        Non-bank financial institution loans to consumers and businesses
        
        :arrow_up: Interest rates
        
        Less strict criteria for loans than banks
        
        Raises capital through shares issues (debentures)
        
        Credit cards
        
        Leasing
        
        Factoring
        
        Regulated by Australian Prudential Regulation
        
        Superannuation
        
        Growth rapidly over the past 20 years due to tax incentives & compulsory super introduced by the government
        
        Long term securities as company share, government & company debt because of the long term nature of their funds
        
        Life Insurance Companies
        
        Insurance companies provide loans to the corporate sector through receipts of insurance premiums (amount needed to pay for covers) which provide capital funds
        
        Unit Trusts
        
        Also known as mutual funds, take funds from a large number of small investors and invest them in specific types of financial assets
        
        Short Term Money Market
        
        3 more items...
        
        Australian Securities Exchange
        
        Definition
        
        Acts as both primary and secondary market for the sale of shares to the public
        
        Created by the merger of ASX & sydney futures in July 2006
        
        Offers products and services:
        
        Shares
        
        Futures
        
        1 more item...
        
        Exchange Traded Options
        
        Warrants
        
        Interest Rate Securities
        
        1 more item...
        
        Contracts for Difference
        
        Exchange Traded Funds
        
        Real Estate Investment Trusts
        
        Listed Investment Commitments
        
        Primary Market
        
        1 more item...
        
        Secondary Market
        
        1 more item...
  - - - Australian Securities and Investment Commission (ASIC)
        
        Independent government body that regulates the corporate sector seeking to improve corporate governance and protect consumers and potential investors
        
        Sets rules about information that must be disclosed when issuing shares + info in annual financial reports
        
        Covers issues such as takeovers and insolvency
        
        Failure to comply may result in fines or imprisonment
        
        Enforces legislation which companies have to obey
        
        E.g. The Corporations Act
      - Company Taxation
        
        The tax a business must pay to the government on the profit which they earn
        
        All businesses pay a flat rate of 30%
        
        Some activities and financial activities can be deducted from the taxable income
        
        E.g. Leasing
    - - Economic Outlook
        
        Can Cause:
        
        :arrow_up: or :arrow_down: demand for products
        
        :arrow_up: or :arrow_down: in the interest rates on funds borrowed internationally
        
        Refers specifically to the projected changes to the level of economy growth throughout the world
      - Availability of Funds
        
        Refers to the ease with which a business can access funds on the international financial markets
        
        Conditions and rates will depend on: risk, demand and supply, and domestic economic conditions
      - Interest Rates
        
        The costs associated with borrowing money
        
        The :arrow_up: risk involved with lending, the :arrow_up: interest rate
        
        Australian Interest rates are typically :arrow_up:, therefore most businesses borrow overseas
        
        Exchange rates become a problem
- - - - Demographic
        
        Particular features of population
        
        Age
        
        Sex
        
        Income
      - Geographic
        
        Location
        
        Region
        
        Urban
        
        Climate
      - Psychographic
        
        Characteristics
        
        Motives
        
        Opinion s
        
        Socioeconomic Group
      - Behavioural
        
        Customer's relations to a product
        
        Purchase Occasion
        
        Loyalty
        
        Price Sensitivity
  - - - Process of developing and promotion differences between the business' products or services and those of the competitors
        
        Customer Service
        
        Environmental Conversn
        
        Convenience
        
        Social and Ethical Issues
    - - Technique in which marketers try to create an image or identity for a product
  - - - Tangible and intangible benefits product posesses
    - - A name, term, symbol, design or etc, that identifies a specific product
        
        Manufacturer's/national brand
        
        Owned by manufacturer
        
        Private/House Brand
        
        Owned by retailer/wholesaler
        
        Generic Brand
        
        No brand name at all
    - - Development of container and the graphic design for a product
    - - Presentation of information on a product/package
  - - - Pricing Methods
        
        Cost-based Pricing
        
        Cost + (Cost x Percentage Mark-Up) = Price
        
        Market-based Pricing
        
        Whatever the market is prepared to pay
        
        Competition Based Pricing
        
        Covering all cost but competing with others price
      - Pricing Strategies
        
        Price Skimming
        
        :arrow_up: during introduction of product life cycle
        
        Price Penetration
        
        :arrow_down: lowest price possible
        
        Loss Leader
        
        Below Cost Price
        
        Price Points
        
        Selling prices at predetermined prcies
      - Price and Quality Interaction
        
        "You get what you pay for"
  - - - Elements of the Promotional Mix
        
        Advertising
        
        Non-personal message communicated to a mass medium
        
        Mass-marketing
        
        Direct Marketing
        
        QUANTUS spends $10m on:
        
        E-marketing
        
        Billboards
        
        Social Media
        
        Marketing Catalogues
        
        Telemarketing
        
        Personal Selling
        
        Sales consultant directed to customer
        
        Public Relations + Publicity
        
        Relationship Marketing
        
        Long-term
        
        Cost Effective
        
        Strong Relationships w/ individual customers
        
        Sales Promotion
        
        Offering direct inducement to customers in an attempt to sell more of its product
        
        Extra Gift
        
        Refunds
      - The Communication Process
        
        Opinion Leader
        
        A person who influences others
        
        Word of Mouth
        
        When people influence others due to conversations
  - - - Roles taken to get the product form the business to customer
        
        Producer -> Customer
        
        Producer -> Retailer -> Customer
        
        Produce -> Wholesaler -> Retailer - > Customer
        
        Producer -> Agent - > Wholesaler - > Retailer - > Customer
    - - Intensive
        
        Everywhere
        
        Saturated Market
      - Selective
        
        Moderate amount of outlets
        
        Exclusive
        
        One retail outlet
        
        Expensive
    - - Transport
      - Warehousing
      - Inventory
    - - Quality of interaction between customer and those within the business who will deliver the srvice
    - - Refers to flow of activities that a business will follow in its delivery of service
    - - Refers to the environment in which the service will be delivered
    - - Practice of using the internet to perform marketing activities
  - - - Worldwide use of a name, term, symbol or logo to identify the seller's products
    - - Global marketing strategy that assumes the way the product is used and the needs it satisfies are the same the world over
    - - A global marketing strategy that assumes the way the product is used and the needs it satisfies are different between countries
    - - How to coordinate their pricing policy across different countries
        
        Customised Pricing
        
        Consumers in different countries charged different
        
        Due to:
        
        Transport
        
        Taxes
        
        Warehousing
        
        Tariff
        
        Tax on imported product
        
        Direct-customised Pricing
        
        According to the local market condition
        
        Standardised Pricing
        
        Same price for product around the world
    - - How a business will differentiate its produccts
      - Developing an image of the product in the consumer's mind that makes that product superior to its competitors
- - - - Internal
        
        Strengths
        
        Weaknesses
      - External
        
        Opportunities
        
        Threats
    - - Introduction
        
        Tries :arrow_up: consumer awareness
      - Growth
        
        Brand :check: market share pursued
      - Maturity
        
        Sales :left_right_arrow:market beccomes saturated
      - Decline
        
        :arrow_down: sales
  - - - Two Types of Data
        
        Primary
        
        Facts and figures form original sources for the specific purposes o fhte porble
        
        Secondary
        
        Information that has already been collected by some person or organisation
        
        Internal
        
        Eeternal
    - - Focusing on data that represents the average, typical/deviations from typical patterns
  - - - Goals
        
        Increase Market Share
        
        Maximising Customer Service
        
        Expanding Product Range
  - - - Groups of present and potentila customers to which a business intends to sell its product
        
        Approaches
        
        Mass Marketing
        
        Seeks large range of customers
        
        Market/segmentation
        
        When the total market is subdivided into group of people who share one or more common characteristics
        
        Niche Market
        
        Narrowly selected market segment
  - - - Implementation
        
        Process of putting the marketing strategies into operation
      - Monitoring
        
        Means checking and observing the actual progress of the marketing plan
      - Controlling
        
        Involves the comparison of planned performance against actual performance and taking corrective action to make sure the objectives are attained
    - - Predictions about the future
        
        Cost Estimates
        
        How much is it going to cost
        
        Revenue estimates
        
        How much is it going to gain?
    - - Comparing sales, market share and marketing profitability to planned results; analysis
    - - Changing the Marketing Mix
      - New Product Development
      - Product Depletion
- - - - Philosophy that states all sections of the business are involved w/ satisfying a customer's needs and wants while achieving the business' goals
      - Marketing (Selling)
        
        Operations (Product
        
        Finance ($)
        
        Human Resource (Employees)
  - - - 1820s-1920s
        
        Focused on producing goods and services
    - - 1920s - 1980s
        
        Emphasised selling because
        :arrow_up: competition = :arrow_up: spending on advertising
    - - 1960s - 1980s
        
        Focus on customer want
      - Stage 2
        
        1980s - Present
        
        Corporate Social Responsibility (CSR)
        
        External pressure from:
        
        Customers
        
        Environmental Organisations
        
        Political Forces
        
        Customer Orientation
        
        Collecting information about customers and basing marketing on them
        
        Relationship Markeitng
        
        Customer loyalty repeat sales achieved through loyalty programs
  - - - Resource Market
        
        Primary Production
        
        Mining
        
        Agriculture
        
        Forests
        
        Fishing
      - Industrial Market
        
        Industries and businesses that purchase products to use in production of other products/operations
      - Consumer Market
        
        Household members who use/consume products they buy
      - Mass Market
        
        Mass produces, distributes, promotes on product to all buyers
      - Niche Market
        
        Concentrated/micro market
        
        Consists of buyers who have specific needs/lifestyles
        
        Intermediate Market
        
        Wholesalers and retailers who purchase products and sell them again to make a profit
- - - - Influences within an individual that affects his/her buying behaviour
        
        Motives
        
        Attitudes
        
        Personality
        
        Self-image
        
        Learning
        
        Perception
    - - Forces exerted by people and groups that customer that affect customer behaviour
        
        Social Class/ Socioeconomic Status/ Person's rank in society
        
        Culture and Subculture
        
        Family and Roles
        
        Reference (other groups)
    - - Boom
        
        :arrow_down; employment = :arrow_down: income
        
        Customers optimistic about future :arrow_up: consumer spending
      - Recession
        
        :arrow_up: unemployment = :arrow_down: income
        
        Consumer pessimistic about future
        :arrow_down: consumer spending
    - - Government policies used to influence the level of economic activity
        
        Example
        
        Competition and Consumer Act of 2010
        
        Fair Trade Act 1987
    - - Deceptive and Misleading Advertising
        
        Can be very serious because of the influential nature of advertising
        
        Types
        
        Bait and Switch
        
        :arrow_down: stock on :arrow_down: priced goods to attract consumers
        
        Dishonest
        
        False Claims
        
        Deceptive Words
        
        Examples
        
        Fine Print
        
        Before and After
        
        Test and Surveys
        
        Country of origin
        
        Packaging
        
        Special Offer
    - - Setting different prices for a product in different markets
    - - The unspoken and unwritten terms of a contract
    - - Protection to the customer if the good is faulty or if the service is not carried out with due care
  - - - Refers to conduct that goes beyond the legal agreements
    - - Materialism
      - Sterotyping
      - Use of Sex
      - Product Placement
      - Invasion of Privacy
    - - Truth and Accuracy in Advertising
        
        Using words to mislead consumers
        
        Example
        
        False Myth busting Coke:
        
        Claiming it doesn't rot teeth
        
        Isn't highly caffeinated
        
        Untruths, exaggerated claims, vague statements
      - Good Taste in Advertising
      - Products that may Damage Health
        
        Mostly junk-food
      - Engaging in Fair Competition
        
        Lessening competition is illegal
      - Sugging
        
        Selling under the guise of a survey
- - - - Creates exchanges that satisfy individual and organisational objectives
- - - - Time between ordering and being received by the customer
    - - Meeting customer demands
    - - How quickly operations processes adjust to change in the market
    - - Creation of individualised products to meet customer's specific needs
      - Mass customisation
        
        Process that allows a a standard mass produced item to be personally modified to specific customer requirements
    - - Refers to the minimisation of expenses so that operation processes are conducted as cheaply as possible
  - - - Logistics
        
        Transportation
        
        Use of Storage (warehousing(
        
        Materials handling
        
        Packaging
      - E-commerce
        
        Business conducted on the internet
        
        Transaction of goods and services through transfer of funds
      - Global Sourcing
        
        Operations strategy where a business will acquires inputs it needs for production across the boarders of number of countries
  - - - Advantage
        
        Simplification
        
        Efficiency and Cost Savings
        
        Increase Process Capability
        
        Increased Accountability
        
        Access to skills and resources lacking within the business
        
        Able to focus on core business
      - Disadvantage
        
        Disadvantage
        
        Payback period and cost
        
        Communication and Language
        
        Loss of control of standards and information security
        
        Loss of Domestic Employment
        
        Loss of Corporate Memory
  - - - Leading Edge
        
        Most advanced or innovative at any point of time
        
        Risks:
        
        Competent technical support might not be readily available
        
        Technology may not be fully developed
      - Established
        
        Technology that is developed and widely used
        
        Simply accepted without question
  - - - Advantages and Disadvantages of Holding Stock
        
        Advantage
        
        Consumers demands can be met
        
        Alternatives can be offered
        
        Buying products in bulk can reduce costs
        
        Disadvantages
        
        Cost of holding stock
        
        Invested capital, labour and energy can't be used elsewehre
        
        Cost of Obsolescence
      - Last in First Out
        
        Since last inventories are more expensive
        LIFO makes profit seem lower
      - First in First Out
        
        FIFO normal cheaper, shows higher profit
      - Just in Time
        
        Exact amount of inputs will arrive only as they are needed in the operations process
  - - - Processes which a business undertakes to ensure:
        
        Reliability
        
        Safety
        
        Fitness of purpose
        
        Consistency
    - - Use of inspections of various points in the production process
      - Set standards -> Test/Assess Quality -> Quality control
    - - Taking series of measurements -> assessing against pre-determined standards
      - Globalisation has affected standards
        
        ISO are voluntarily abided by businesses to compete internationally
    - - Continuous Improvement
        
        Ongoing Commitment to improve business goods/services
        
        Inclusion of staff
        
        Suggestions
        
        Initiatives
      - Total Quality Management
        
        Managing total business to deliver quality to customers
        
        Commitment + responsibility of every employee of the business
  - - - Internal
        
        Staff
        
        Application of Technology
        
        Innovation
      - External
        
        Legislative/regulation change
        
        Economic Changes
        
        Social Changes
        
        Technological Changes
    - - Definition
        
        Since change is needed
        
        New skills are needed
        
        Giving insecurity and inadequacy to senior citizens
        
        Psychological resistance to change
      - Change Agents
        
        Respected workers who can motivate change
      - Kurt Lewin's model
        
        Unfreezing -> change - > freezing
  - - - Global Web Strategy
        
        Manufacturing at the cheapest
        
        Financing from low interest rate costs
        
        Distributing to demanding nations
    - - Sourcing of any operations that gives a business a cost advantage
      - Benefit vs Challenges
        
        Benefits
        
        Cost
        
        New Technology
        
        Expertise/Labour Specialisation
        
        Operate over extended hours
        
        Challenges
        
        :arrow_up: costs of logistics and storage and distribution
        
        Managing different regulations
        
        :arrow_up: complexity
        
        Financing
        
        Contracting
    - - Definition
        
        Cost advantage by producing on a large scale
      - Effects
        
        :arrow_up: volumes
        :arrow_down: cost
        
        :arrow_up: use of technology
        
        Global branding and global advertising
        
        :arrow_up: cost of duplication (marketing)
        
        HR
        
        Training and Development Strategies Globally
    - - Scanning global environment and learning form the best practice of business
    - - Innovation
      - Quality + Competitive advantage
- - - - Capital (facilities or/and machinery
      - Labour
      - Intellectual Capital
      - Ideas
      - Financial Resources
      - Technology
    - - Processes located in different geographical areas
    - - Refers to the range of suppliers a business has and the nature of its relationships with those suppliers
  - - - :arrow_down: labour
      - :arrow_up: training costs
      - :arrow_up: wages for theme
  - - - Goods
        
        Quality of Design
        
        Fitness for Purpose
      - Services
        
        Professionalism of the service provider
        
        Reliability of the service provider
        
        Level of Customisation
  - - - Expenses due to meeting legal requirements
  - - - Difference between Legal Compliance and Ethical Responsibility
        
        Legal Compliance
        
        Obeying Laws
        
        Ethical Responsibility
        
        Socially and Morally Responsible Decisions
        
        Legal vs Ethical
        
        Legal
        
        Taxation
        
        Labour Law
        
        Ethical
        
        Social Concerns
        
        Environmental Concerns
        
        Onshore Sourcing
        
        Domestic Outsourcing
        
        Offshore Sourcing
        
        Overseas outsourcing with there is :arrow_down: taxation
        
        Labour and cheaper
      - Environmental Sustainability and Social Responsibility
        
        Environmental Sustainability
        
        Conserving resource for future generations
        
        Social Responsibility
        
        Management of:
        
        Social
        
        Environmental
        
        Political
        
        Human Consequences of its actions
- - - - Revenue or income
      - Cost or expenses
  - - - Economies of Scale
        
        Cost advantage that can be created as a result of an increase in scale of business operations
        
        Being able to purchase :arrow_down: cost per unit
  - - - Goods
        
        The good
        
        Quality
        
        Additional Features
      - Services
        
        Time Spent
        
        Amount of Expertise
        
        Qualifications
  - - - Standardised Goods
        
        Mass produced, usually in assembly line
      - Customised Goods
        
        Varied according to customers
      - Perishable Goods (eatable)
        Non-Perishable (non-edible)
      - Intermediate Goods
        
        Used for more transformation
    - - Standardised Service
        
        Fast food
      - Customised Service
        
        Doctor
- - - - Definition
        
        Inputs that are changed or converted
      - Materials
        
        Raw
        
        Natural State
        
        Intermediate
        
        Materials used in further processing
      - Information
        
        Definition
        
        Knowledge gained from:
        
        Research
        
        Investigation
        
        Instruction
        
        External Info
        
        Market Reports
        
        Statistics from Industry Observers
        
        Industry Bodies
        
        Government Stats from ABS
        
        Internal Info
        
        Within Financial Reports
        
        Quality Reports
        
        Key Performance Indicators
      - Customers
        
        Due to customers orientation, production process uses customer's preferences and interests, therefore their designs and preference act as a transformed resource
    - - Definition
        
        Resources that cause the change in transformed resource
      - Human Resource
        
        Employees that combine the resources
      - Facilities
        
        Plant
        
        Factory
        
        Office
        
        Machinery
    - - Conversion of inputs into outputs
        Value Adding
      - The Influence of:
        
        Volume
        
        Refers to how much of a product is made
        
        Lead times is the time it takes for an order to be fulfilled from the amount it is made
        
        Variety
        
        Or mix flexibility is known by consumers as product range or variety of choice
        
        Variation in Demand
        
        How processes can respond to changing demand
        
        :arrow_up: demand may be hard to meet
        
        Supplies cannot supply
        
        Labour is not flexible
        
        Machinery cannot adjust
        
        Visibility
        
        Customer Contact/ Feedback
        
        Surveys
        
        Interviews
        
        Warranty Claims
        
        Letters
        
        Wikis
        
        Blogs
        
        Verbal Contact
      - Sequencing and Scheduling
        
        Definition
        
        Sequencing refers to the length of time activities take within the operations processes
        
        Sequencing refers to the order in which activities in the operations processes occur
        
        Gantt Charts
        
        A bar chart showing both scheduled and completed work over a period of time
        
        Planning and Tracking
        
        Critical Path Analysis
        
        CPA lists all the key tasks in operations porcess as a sequence
        
        Includes time needed and task
        
        Technology
        
        Business technology involves the use of machinery and systems that enable businesses to undertake the transformation process more effectively
        
        Task Design
        
        Breaking down the work into a series of jobs in which contributes to the final goal
        
        Process Layout
        
        Arrangement of transforming resources such that they are grouped by the function
        
        Monitoring (measuring)
        
        Measuring actual performance against planned performance
        
        Measure KPIs
        
        Control
        
        Occurs when KPI's are assessed against predetermined targets and corrective action taken if required
        
        Improvement
        
        Systematic reduction of inefficiencies and wastage
        
        Work processes and the elimination of any bottlenecks (setbacks)
  - - - Final Good of Service
    - - Refers to how well a business meets and exceeds customer expectations in all aspects of its operations
    - - Promises to correct any defects in their product or in the services they deliver
      - Can then adjust transformation process
        
        controlling