220 AEM Introduction to Business Management Prelim #1 Review Sheet Chapters 1, 5, 7-10, 13-17
Ch. 1 Standard of living Amount of goods that can be purchased Quality of Life General Well Being Risk Higher the risk, better chance for profit Five Factors of Production Labor, Land, Capital, Entrepreneurship, Knowledge Five elements of Business environment economical, technological, competitive, social, global Three ways Gov. can reduce risk enable contracts, establish currency, eliminate corruption Productivity Output divided by hours Decline in Farming due to move towards big businesses Ch. 5 Sole Proprietorship Advantages: Own boss Disadvantages: Liability Partnerships Can control more than 7 people, shared liability Limited vs. General Partner Limited not as much liability Corporations Advantages: More money, expansion, no liability Disadvantages: expensive, paperwork, double taxation S-Corp not double taxed Stockholders - own part of company Vertical Merger involved in different stages of business Horizontal Merger Same industry, expand products Conglomerate Merger Unrelated industries Franchise Advantages: Support from parent company, recognized name Disadvantages: Profit sharing, high start up costs Ch. 7 Management 1. planning 2. organizing 3. leading 4. controlling people New Management Move from authoritative, less "bosses", downsizing Objectives Short term Goals Long term SWOT analysis Strengths, weakness, opportunities, threats Tactical Planning short term statements about what is to be done Operational Planning setting work standards Contingency Planning Prepare alternatives Strategic Planning determine major goals Decision Making Define situation, Describe info, Develop alternatives, Develop agreement, Decide which alternative, Do what is indicated, Determine whether decision was good Management Top, Middle, Supervisory, Non-Sup. Enabling Giving workers the tools necessary to empower them Control Process 1. Set standards 2. Monitor results 3. Compare results 4. Communicate results 5. Provide Feedback Manager Skills 1. Technical 2. HR 3. Conceptual Ch. 8 Economy of Scale Companies can produce goods more inexpensively if they mass produce
Max Weber Pyramid hierarchy, managers on top Fayol Principles of Organization Bureaucracy Many layers of organization Line Personnel Contribute directly to companies' goals Staff Personnel Assist Line Matrix Organization specialists brought together to work Tall Organization Many layers Cross Functional Team Employees from different departments Extranet extension of internet for one company Total Quality Management striving for customer satisfaction by ensuring quality from all departments Inverted Organization Empowered Line workers, Support Personnel, Top Management Reengineering radical redesign Restructuring Small changes Organizational Culture widely shared values in corportation Ch. 9 Operations Management Converts or transforms resources into goods or services Facility Location Process of selection geographic location Quality Control measuring against standards ISO 9000 assurance standard Form Utility value assigned to created goods Process Planning best means for turning out goods Process Manufacturing changes materials Assembly Process puts together components Materials Requirement Planning computer based operations management system ERP Enterprise resource planning links multiple firms Just in Time (JIT) inventory control minimum inventory on premises Flexible Manufacturing things designed to do multiple tasks Lean Manufacturing production using less of everything compared to Mass Prod. Competing in Time Faster than competition in responding to customer PERT program evaluation and review technique tasks, time Ch. 10 Hawthorne Studies Tests with lighting, people respond to being watched Maslow's Hierarchy of needs Physiological (food), Safety (secure) Social (feel accepted), Esteem (recognition), Self-actualization Taylor Studies Time each method, choose fastest method Theory X average person dislikes work, needs forcing Theory Y People like work, motivated by rewards Theory Z Blends the two long term employment, responsibility Herzberg's Motivating Factors Hygiene Factors don't motivate, but remove =dissatisfaction Vroom's Expectancy Theory employee expectations affect motivation (Can I do this? Is it worth it? Management by Objectives 1. Goals 2. Department Goals 3. Individual goals 4. Communication 5. Results are evaluated Employees 6. rewarded
Increase Communication 1. reward listening 2. Train supervisors to listen 3. Remove communication barriers 4. Facilitate communication Customer Relationship Management (CRM) learning about customers then satisfy Marketing Determine what customer wants then provide Ch. 13 Marketing Concept 1. Customer Orientation 2. Service Orientation 3. Profit Orientation 4 P's Product, Price, Place, Promoting Promotion Not just advertising Marketing Research Process 1. Define Problem 2. Collect Data 3. Analyze Data 4. Choose Best Solution Marketing Environment 1. Global Factors (internet) 2. Tech. Factors (Databases) 3. Social Factors (customers) 4. Competitive Factors 5. Economic Factors Consumer Marketing segmentation and targeting Segmentation 1. Demographic (age, income) 2. Pychographic (values) 3. Benefit (preferences) 4. Volume (usage) 5. Geographic (area) Niche Marketing Finding small but profitable markets Stakeholder Marketing Good relationship with stakeholders Business to Business number is greater, size bigger, more rational, direct sales Ch. 14 Product Line group of products physically similar Product Mix Combination of Product Lines Types of Goods 1. Convenience 2. Shopping (compared) 3. Specialty Goods 4. Unsought Goods (funerals) Industrial Goods Products used in production of other products. Trademark A brand that has been given legal protection Deal (private) brand Carry Retailer's name (Sears) Brand Equity Brand Loyalty, and Awareness New Product Development 1. Idea 2. Screening 3. Analysis 4. Development 5. Testing 6. Commercialization Product Life Cycle Introduction, growth, maturity, delcline Cost Based Pricing Ineffective since market determines price Break Even Analysis Determine where profit is starting to be made Ch. 15 Channel of Distribution includes marketing intermediaries (wholesaler), and retailers Utilities Time (when they want it), Place (where), Possession (transport ownership), Information, Service, Form (changing raw materials) Rack Jobbers Furnish Racks to sell to retailers Drop Shippers ship orders from producer to consumer Freight Forwarder Puts many small shipments together to create large cost effective one Retailer Competition Price, Service, Location, Selction, Entertainment Intensive Distribution Puts products into as many retail outlets as possible Selective Distribution Uses only a preferred group Exclusive Distribution Uses only one retailer Multilevel Marketing Earn commissions on own sales
Channel of Distribution Systems Supplier's Plants, Manufacturers, Wholesalers, Retailers Supply Chain Management managing movement of raw materials to final product Transportation Fastest (Plane), Cheapest (Ships), Flexible (Railroad) Cost of Distribution 30 percent Ch. 16 Promotion Mix Personal Selling, Advertising, Public Relations, Sales Promotion, Value Package Advertising Breakdown 1. Television 2. Newspaper 3. Direct Mail Steps in Selling Process 1. Prospect and Qualify 2. Preapproach 3. Approach 4. Make Presentation 5. Answer Objections 6. Close Sale 7. Follow Up Consultative Salesperson Analyzes Customer needs develops solutions Viral Marketing Paying people on internet to talk you up to schemes to send people to websites Push Strategy Producer convinces wholesalers and retailers to stock product Pull Strategy Heavy Promotion so customer will request product from retailer Interactive Marketing Communication System 1. Gather Data 2. Respond Quickly to customer information 3. Make it possible for customers to obtain information Forms of reaching customer Sampling, Publicity, PR, Word of Mouth Ch. 17 Information Processing Changed Went to Information systems (IS) supporting business to Information Technology (IT) change business Knowledge Technology (KT) Knowledge is information charged with enough intelligence to make it useful Virtual Private Network (VPN) creates tunnels of private data flow over internet Intranet Company-wide network, closed to public Qualities of Information 1. Quality 2. Completeness 3. Timeliness 4. Relevance Computer Networks Useful 1. Save time and money 2. Easy links across boundaries 3. Allow employees to see complete info Software shareware, distributed free of chare freeware, free for the taking Management Issues as a result of Technology Human Resource Issues (recruit employees who know how to use Tech), Security Issues (viruses), Privacy Issues (hackers, cookies track where you've been), Stability Issues (gliches)