Business Management: Finance, Operations & Marketing
Business Management: Key Areas
Supply Area and Inventory Costs
The supply area is part of logistics. Activities include the pre-production process: selecting, buying, and storing raw materials. This is called provisioning.
Inventory costs include: storage costs (costs of storing goods), administrative and marketing costs, transportation costs, and costs from production interruptions.
Just in Time (JIT) Method
The Just in Time (JIT) method, a Japanese organizational system, increases productivity and reduces management costs and storage losses. Companies receive supplies just in time for assembly.
Financial Management
Financial Position
This area focuses on obtaining and managing financial resources, studying investment selection, and performance.
Investment
Investment is the acquisition of capital goods or financial capital with the expectation of profit.
Funding Sources
- Internal Funding: Funds generated by the company, including depreciation funds and retained profits.
- External Funding: Funds raised outside the company, including owner contributions and external financing from third parties.
Capital & Loans
A company can raise funds through a capital increase by issuing new shares. A loan is a sum of money borrowed with a promise to repay the principal plus interest according to an amortization schedule. A line of credit allows a company to borrow money up to an agreed limit.
Leasing & Renting
Leasing is a lease with a purchase option, useful for capital items (machinery, vehicles, buildings). Renting is a lease where the primary purpose is renting, not buying.
Discount Effect
A bank advances the amount of a client’s letter of credit before its maturity date.
Business Area & Marketing
Business Area
This area focuses on meeting market needs and satisfying consumers with products that meet design, price, and distribution requirements.
Marketing Plan
A marketing plan includes situation analysis, strategy design, implementation, and results monitoring.
Market & Market Research
A market is a physical or virtual place where buyers and sellers interact. Market research is essential for designing marketing strategies. Understanding the potential market, target segments, product needs, buying behavior, and location is crucial for stimulating demand.
Marketing Mix
The marketing mix combines specific variables to achieve company objectives.
- Product: Tangible and intangible aspects of goods or services meeting a need.
- Price: The amount of money, time, effort, and inconvenience required to obtain a product.
- Promotion: Activities that communicate product benefits and persuade the target market to buy.
- Distribution: Linking production and consumption to facilitate purchases.
Human Resources
The human resources area is responsible for recruitment, training, labor relations, personnel management, healthcare, and job security.