Long and Short term objectives

Short term objectives will based on the business focusing on maximizing it's rewards and profits in a year. It would possibly do this by possibly stopping most repairs to the building and facilities it owns, stop the training of employees or end most advertising.
Whereas long term objectives involve substantial planing where objectives are set over a long period of time and repairs to facilities and buildings, training and advertising are main priorities to help encourage growth to the company and add quality to it, and in the long term, profits made can turn out to be huge and more beneficial.

How do firms determine what their aims should be?

Firms will base their mission statements on :

•  the way that they will make money, their purpose.
• The type of market they are in and its current circumstances, which can change the businesses aims depending the situation in that market, if its in a state of growth or decline.
•  What the the current trends are / whats in season.
• What the owner/s of the business wish to achieve.
• Whether the business wants to focus on the quality of it's products or service. 

Mission Statement

Is a statement that sets out the aims of the business (what they want to achieve), which is created as soon as the business sets up.

Examples: McDonald's mission statement-  McDonald's vision is to be the world's best quick-service restaurant experience. Being the best mean's providing outstanding quality , service, cleanliness and value, so that we make every customer in every restaurant smile.

Nike- To bring inspiration and innovation to every athlete in the world (if you have body you are an athlete).

Tesco- Tesco's core purpose is creating value for customers, to earn their lifetime loyalty.

Lego- Though we make toys, we are not just a toy company. Though we make money, we are not driven by profit. Though we are famous for our product, we are defined by our philosophy. Our name comes from the combination of the Danish "leg godt" , which means to "play well" . It is both our name and our nature. We believe that play is the essential ingredient in a child's growth and development. It grows the human spirit. It encourages imagination, conceptual thinking and creation.

Ansoff's Matrix

Is the four different strategies that, businesses will follow in reflection to marketing, businesses will use these strategies at different times during a business's growth.
There are four different strategies which are:
Market Penetration- is used to encourage sales and development, is used at the beginning of a businesses life-cycle which introduces a business the market.
Market development- Attempts to further increase market share of a business.
New Product Development- Offers more variety in products to meet customer needs.
Diversification- Expanding a business's brand of products by entering a new market which helps to increase growth to the business. Is usually the last strategy a business will use once they have a secure and stable position in their current market.

Marketing Objectives, Tactics and Strategies

Marketing Objectives are marketing activities that are lead by the 4 P's (Price, Promotion, Place, Product)
Marketing Strategies is plan detailing how the marketing objective will be fulfilled.
Marketing Tactics isolate decisions that need to be made to ensure that the marketing strategies are a success.

Effective and Normal Objectives.

Normal Objectives are several statements of purpose or aims to make a profit. Whereas Efffective objectives are more specific and use SMART targets.

Specific
Measurable
Achievable     -   Targets
Realistic
Timed

These are important as it sets businesses a deadline to what they should achieve in certain period of time, helping to show them how well their business is doing, and whether it is in a state of growth or decline.

Qualitative and Quantitative Data

Qualitative data- gives an insight into the thoughts and opinions of people. It is concerned with the quality of opinions.

Quantitative data- states statistical facts to allow easy numerical analysis.

Both types of analysis are related to primary research.

Mass and Niche Markets

• Mass markets appeal to a large majority of people, whereas niche markets appeal to a smaller or specific market.
• The mass market has more money to be made in it as there is a wider variety of people, unlike the niche market where there is less money to be made as there is a limited variety of people.
• Mass markets will need more advertisement to get the attention of the consumers so they know what is available but this will result in a high cost. Whereas niche markets will have less advertising but will more specific towards the products that it is selling and who it is targeting.
• Mass market will generally have more room for growth as their is a variety of products on sale and the cost of manufacturing will be cheap due to stock being bough in large amounts (economies of scale). Whereas the niche market will have a small room for growth as it will have less sales due too expensive suppliers, as products that the business will be buying will be unique and be order in small quantities as there is less demand, which limits growth in that sector. 

Adding Value

When a firm links value to the price of the product and its usage. The advantage of this is that it can put the right, fair price on a product which helps to benefit the consumer while helping to maximize profits for the firm. The disadvantages of this is that it can over value a product which other firms have priced at a lower amount and therefore will result in less consumers buying that product from that firm, seeing as the same product is cheaper at a competitor.

Asset-led Marketing

Is when a firm tracts market opportunities which match to the firms's own strengths. The advantages of this is that it is cost efficient for the firm and helps them to maximize profits if their new idea works. The disadvantages of this is that the firms new idea is likely prove to be unpopular with their consumers causing the firm to lose money and have a lower revenue. Again is more likely to work in a market that has limited products for the consumer.

Product Orientation

Firms focus in what it can produce and bases it's decision around that, hoping that this will fit with customer requirements. The disadvantages of this is that it can be very risky as the firm may produce something customers don't want. The advantages of this is that it can be cost efficient and can work very successfully if consumers have limited choice which occurs in regions such as eastern Europe.

Market Orientation

Is when a firm bases its decisions on the customers' needs, by continually monitoring its environment to find out what customers want, what competitors are offering and what changes are occurring in the market. The benefits of this is that a firm can help stay one step ahead of its competitors by offering unique products that can't be purchased at their competitors which also helps to increase product sales and market share. The disadvantages of this is that it is expensive to do and time consuming as market research is constantly needed to carry this process out, which can take very long to complete and if the firm does the market research through a corporation, it can be very costly. It is also very difficult to carry out as market fashion and tastes are constantly changing which can be difficult for a firm to stay on top of whats in fashion.

A Large Market Share

The impacts this will cause on businesses and competitors will lead to both factions having an increase in turnover, profit and power. The market leader will have to some degree power of control over prices and marketing strategies, which competitors may have to follow if the market leader has put prices of products at a low amount. It will allow businesses and their competitors to use economies of scale, which is a reduction in the average costs of production due to the increase in size and scale of output which is bought by a large market share of a sector. This will give businesses the chance to reduce prices and maintain profitability or maintain price and increase profits. Competition will be less fierce in a large market as  there is more money to be made, there is less chance of failure, a high demand for products and there is a higher chance of success.

Size of a Market

Can be measured by the number of items sold (the volume) or the amount of sales in terms of the amount of money spent in it (the value).

Considerations that a business has to make before entering a new market

A business will have to take into account

• lifestyle change to meet the demand of the new market they are entering
• The changes that there will be in the marketing mix
• Being able to take the risks needed to succeed in the new market
• Making new deals and contracts with new suppliers
• Finding out about the competitors in the market, so using resources to get the required information
• Finding out about the new target market, such who they are and how to attract the to the business.
• Taking into account how the current state of the economy will affect the new market a business is entering
• The place/location of the business, and way in which the business  will distribute their new products in the new market sector they are entering
• How e-commerce will have an effect on the way the business will distribute its products in the new market sector and how much of an impact it may have.
• How the cost to achieve break even will change, whether it will be easier or harder for the business to do this in a new market
• Advertising costs- possible sponsorship- how this will help the business when entering a new a market, and whether they way in which they do it will change.
• Whether running costs are going to increase or decrease
• What copyright will need to be obtained in order to enter a new market 
• What the new customer satisfaction is going to be
• Whether any government funding will be needed 
• What the new morals and ethics in the new market are
• How the interest of the stakeholders are going to change 

Geographical and non-geographical markets

Geographical markets are when there are stalls and shops on high street, where customers can go to and see  the products physically in their hand, are at places that exist and that you can go to. Whereas non-geographical are when shops on the internet, so are using e-commerce, allowing consumers to buy online.

Market Share calculation

The market share is the % that firm has of the amount of sales in the market it is in.
Calculation of Market share is sales of product/Total market size X 100 = %

The reaction of Germany to Britain Vetoing at the summit on Friday 9th December

http://news.sky.com/home/video/business-news/video/16127497

Across Europe and especially Germany, have shown their feeling towards Britain, claim that Britain is on the edge of the new Europe map, outside European politics.
German tabloids have stated that the crisis will carry on and will resolve without Britain being apart of it, even though they would have preferred Britain to have been apart of resolving the collapsing Euro.
Many people and countries in the EU are still confused and do not fully understand why Britain has opted of being apart of the bill that states the help of the Euro that what discussed at the summit last week.

Eurozone heading towards recession in 2012

new.sky.com/home/business/article/1613070
<iframe width="640" height="360" src="http://video.sky.com/embed/external/16130884" frameborder="0" allowfullscreen></iframe>

Sky news States that-

• The audit firm states that it expects the 17 members of the Eurozone to shrink in the first quarter of next year.
• It predicts that growth for these countries for the whole year will be only 0.1%
• However it states that unemployment will only fall to a high of 10% by 2015.
• This view of a recession occuring next year has only been backed up by the fact that the Euro on Wednesday 14th December fell to a 11 month low, dropping below 84p.

Types of Production

Flow method- is a method of production organisation where the task is worked on continuously or where the process of material is continuous and progressive. As work on a task at a particular stage is complete, it must be passed directly to the next for processing without waiting for the remaining tasks in the batch. In order for the flow to be smooth the times that each task requires on each stage must be of equal length and there should be no movement off the flow production line. The advantages of this method is that batch queing is eliminating, speeding up the process as a whole. Is very useful in getting a product that is in high demand back out to shops in high supply feeding the consumers needs The disadvantages of the method is that it requires considerable planning in ensuring that correct production materials are delivered on time, and if all parts of the production are working efficiently and operating at an equal flow. If one operation is unequal to the others than the whole product will be made poorly and damage the suppliers reputation.

Types of Production

Batch Method- Work for any task is dived into parts. Each part is completed through the whole batch before the next part is performed. Aiming to achieve specialsation and high equipment utilisation, is most commonly used method for organising manufacture. The advantages of the batch method is that capital expenditure can be kept lower requiring planning to ensure that production equipment is not idle, and it helps to achieve specialsation of labour. The disadvantages of this method is that there is a high probability of poor work flow if batches are not of optimal size. Can often result in the build up of significant work in progress or stocks.   

Types of Production

Job production- the complete task is handled by a single worker or group of workers. Jobs are split up in two groups, low technology and high technology. The advantages of using this type of production is that jobs that are in low technology group can be easily organised with the required skills and equipment easily obtainable. The disadvantages of using this is that no project manager is required causing vital decisions to be made at a slow rate. The advantages of using high technology is that good project management is required for success as it will help to make decision making  faster and decisive. the disadvantages of using high technology is that it involves much greater complexity  and therefore presents greater management challenge. 

Prt 2 of Market Analysis explanation using Porter's five forces

Explanation of Market Analysis using Porter's five forces

Applying market analysis with Ansoff's Matrix

Market Analysis can be applied to Ansoff's Matrix as the four different stages that its based around all have to be analysed in different ways. Market Penetration will be mostly based around market research which would analysis the market and see if their was a gap in the market for a new product innovation that a firm had and would look into their competitors and gain knowledge on the market they were going into.
Market development would involve a market analysis to gain information of how to further increase a firms market share by researching ways that competitors have increased their market share, taking into the account limitations that may occur due to amount of money available for the firm and sources available.
New product development will involve analysing the demands of the consumer and bringing out new products that will be compatible with products already bought out, to help enhance the consumers experience with their product.
Diversification will use the analysis that was used for market penetration, but use mainly primary research to know what areas of the market consumers would want the company to enter, find out the competition in a new market a firm is thinking of entering and use Porter's five forces to assess and show the competitions and difficulty of the market the firm is entering.

Secondary Research

Is information that has been already collected and gathered from either within the firm that has already been collected or information outside the firm using the internet or collecting the data from other firms. This research is often refered to as desk research.
The advantages of using secondary research is that it is cheap, quick and easy to gather and can cover a wide area of different business sectors.
The disadvantages of using secondary data is that is isn't 100% reliable as firms may have tampered with the information adding false information to it or taken away vital information that is needed. It doesn't inform the firm of how consumers are going to react to their ideas and if they like them and doesn't help give the firm an idea of where to best position their shop  if it is going to be retail.

Primary Research

Is new information that has been collected first, which usually refered to as called field research. The data could be collected by the firm itself or by a specialist research company.
The advantages of primary research is that it is reliable as it's been collected first hand, it helps to promote customer loyalty and see customer reactions in relations to the products the firm is offering, it can be cheap if done by yourself and no other company or firm will have the information making it exclusive to only your firm.
The disadvantages of primary data is that it is time consumer if done by yourself and can be expensive if it is done through a specialist corperation

1min40 to 2min30 is related to the conservatives aims to help improve and stabilize businesses

Market Analysis Research

There are two types of market research, Primary and Secondary research which both have its advantages and disadvantages which companies use to help set up their business through information gathered about their competitors and wants and needs of the consumer and where to best place your business for view of the public

9mins onward- Talks about Britain's recent creations to help improve growth for the future

The inequality discussed through the 50p tax

8 mins - Begins to talk about how Britain needs to increase amount of products it makes and hat we need to do in order to compete with Asia

Current State of the British Economy

The third-quarter GDP figures released on the1st November showed an unexpected 0.5% economic growth which shows an annualised rate of 2%, which is the the fastest quarterly rate for more than a year, giving hope to future recovery of the country, helping to raise morale and confidence for the public.
British banks are exposed to Europe's troubled spots as they have loaned a total amount of £220 billion to Ireland, Spain, Italy, Portugal and Greece, whose sovereign debts are under question by bond markets.
Last year the British economy suffered a sharp contraction in it's final quarter of 2010 GDP, which was blamed on the severe weather conditions. Previously the economy had seen a conductive growth in it's GDP which had given positive feed back and encourage to the country. Factors that also contribute to the negative growth that occurred last year were due to the rise in energy bills, which made many households hold back on spending . The other factor was the decline in British exports that were being experienced, which was reducing the amount of income, coming into Britain.
Overall the positive growth of the third quarter of 2011 shows a positive impact on the growth of the economy in comparison to last years values which gave a pessimistic outlook on Britain's growth.

Difference between Small business & Big business sales

A small business takes in small amounts of payments at one given time whereas a big business takes in big amounts of payment. There is less tax for small business but have less sales compared with big business's where they have higher tax rates to pay but have much more sells then small businesses. Small businesses have better quality of products but less variety in their products, where as big businesses have a more select variety in products but which are at a less quality level. Small businesses have higher prices due to them not buying in bulk whereas big business's prices are much lower due to them buying in bulk.

http://www.bbc.co.uk/iplayer/console/b0150p5l

How to make money in the current Economic climate

The Recession- the effect it has on (smaller) business

The effect that the recession is having on business is that it is producing less revenue as more people have become unemployed, while the rest of the population do not want to be spending in case of losing their job as well. Due to there being less revenue business's have to make cuts which can either involve firing employer or cutting their wages. Larger organisations such as Tesco's for example will attract their customers due to their prices being lower. The business's will have a smaller variety in products due suppliers charging more for those products or having the suppliers who supply the variety of products going bust. Pricing strategies will need to change in order to attract more customers. Acquiring loans from banks will be a lot tougher as there is a higher risk of failure for example due to the countries economic climate 75% of small business fail within their first year. Trade credit (which is when a business doesn't pay for their supplies straight away and pay it within a certain amount of days or weeks) are much lower due to the higher risk of companies not being able to pay their suppliers back.   

UK's current GDP

Market Segments

Market segment is an identifiable group with similar needs and wants within a market.
Firms adjust their market accordingly to these needs and wants of the consumer.
This is a way of dividing up the market.
Examples of different identifiable groups are age, gender, income, usage rate (which is how often you will use products) and socio-economic grouping (which is the method of segmenting people based on their income and job).
This will impact a business as their products may be attracted to only a certain segment which may lower their overall revenue and profit. It may also limit the amount of ideas that they have for a new product as an idea that may develop may not be appropriate or popular with the market segment that the business usually attracts and be unpopular.

Market Growth

If a market is shrinking it will mill make remaining competition very fierce due to less demand for products so less profits to be made and there is pressure to which business will liquidate next. There is little room for new ventures and little space for market growth.
If a market is growing there is a higher chance of success as there is more demand for the products, so more profits to be made. The market state encourages new ventures into products increasing their chance of success.

Market Share

The market share of a firm is the % that it has of the market sales.
It is worked out by sales of total market Divide total market size X 100 =%

Market and Market Analysis

The market analysis is when an entreprenure is researching the market they are planning to enter and if there is a gap in the market.
The market is a place or process that brings together buyers and sellers with a view to agreeing a price.

Introduction

The aim of this blog is to help me and everyone else in the business and economics class, revise and prepare for the business and economics exam in May/June. Also help catch up on lost notes and what is going on in the business and economics market and the current state of the country.