Business management

A business aims to satisfy customers’ needs and wants. Businesses operate in the private, public or third sectors of the economy and in the primary, secondary or tertiary sectors of industry.

Customer service is important to every business. For a business to succeed they need to provide good customer service to the customers who buy the goods and services.

Different types of organisation have different advantages and disadvantages. These must be considered when owners decide on which form their organisation should take.

Businesses have different objectives that are linked directly to the ambitions of the business. These objectives are influenced by the size of the business and its ownership.

Businesses can’t control external factors but must respond to them. These political, economic, social, technological, environmental and competitive factors are represented by the acronym PESTEC.

Internal factors can influence the operations of a business both positively and negatively. The three main internal factors are labour, finance, and technology.

Businesses have many different stakeholders who each have a key interest in how a business operates. Stakeholders often have influence over the decisions made by business organisations.

A business needs to identify its target market or market segment in order to tailor their product effectively to the consumer.

Businesses use market research to identify customers’ needs and wants. Each method of market research has advantages and disadvantages for a business.

Product is the most important ‘P’ of the marketing mix. All products go through a life cycle of development, introduction, growth, maturity and decline. Branding is used to make a product stand out from its rivals.

Price is an element of the marketing mix. Price is crucial to a product’s success as it must be appropriate for targeted customers.

Where a product is sold is crucial to the success of a business. Key decisions have to be made in order to achieve the best place for the business.

Businesses use promotion methods to make customers aware of their products and services. Promotion methods are highly competitive and usually expensive.

There are many factors that can affect a business’s choice of supplier. It is important that a business chooses the most suitable suppliers for their needs.

The processes a business uses to manage their inventory levels and the issues associated with overstocking and understocking are important factors in the survival and success of that business.

The way we make a product can depend on the type of product and volume required. There are different methods of production used by businesses.

Quality is vital for any business. There are different ways of ensuring quality in production.

There are many costs and benefits to an organisation of operating ethically and environmentally. A business may benefit from minimising their packaging and championing recycling.

Employees have a direct effect on the success of an organisation. The different stages of recruitment and selection must be considered when choosing people to work within an organisation.

It is important that businesses invest in training and development to enhance staff skills. The type of training offered can have different costs and benefits to an organisation.

It’s important that businesses motivate their staff as this minimises staff turnover and helps maintain a stable staff. Businesses motivate staff by financial and non-financial methods.

Businesses need to ensure they are following the rules and regulations outlined in current employment legislation. Employment legislation has a direct effect on the day to day running of a business.

Businesses need to choose appropriate ways to finance their operations. Finance can be short or long term. It’s important that businesses choose the most suitable type of finance for their needs.

Businesses use break-even charts to illustrate how to track and predict cash flows. A business needs to be able to calculate how many products they need to sell to make a profit.

Businesses need to manage their cash flow to enable them to operate effectively. It is important to be able to interpret a cash budget and justify suitable solutions to cash flow problems.

Businesses need to be able to interpret an income statement (profit statement) in order to identify profit or loss and the reasons behind it.