Business Mindset Overview

Developing a Business Mindset

• A business is a profit-seeking organization that provides goods and services to satisfy customer needs.
• The core purpose of business is adding value to satisfy customers, which involves accepting risks.
• Profit is the revenue remaining after deducting all business costs.
• Competitive advantage is a feature of a product or company that makes it more appealing to target customers.
• The Business Model Canvas is a visual tool that outlines a business's key elements in nine blocks.
• Value Proposition: What value do you offer your customers?
• Key Activities: Actions, machinery, and partnerships needed to deliver value.
• Key Partners: Entities that contribute to the business model, like suppliers or distributors.
• Customer Segments: Identifying and targeting the right customer groups.
• Channels: The process of getting goods or services to customers (transport, delivery, etc.).
• Customer Relationships: Building and maintaining relationships with customers, especially long-term ones.
• Key Resources: Assets critical to the business, like facilities, equipment, or technology.
• Cost Structure: A breakdown of all the business's expenses.
• Revenue Streams: How the business generates income.

Categorizing Businesses

• Businesses can be categorized by product type (goods vs. services), product range, size (SMEs vs. large corporations), geographic reach, and ownership.
• SMEs (Small and Medium Enterprises): Typically have less than 250 employees, offering greater flexibility and customer connection.
• Large Corporations: Have significant market influence, high market share, and economies of scale.
• Sole Proprietorships, Partnerships, and Corporations are common forms of business ownership.

Positive and Negative Effects of Business

• Businesses provide valuable goods and services, create employment, and contribute to taxes.
• They also face criticisms regarding environmental impact, ethical conduct, and potential social disruptions.

Porter's Five Forces Analysis

• A framework for analyzing the competitive landscape of an industry and identifying opportunities and threats.

Identifying Functional Areas in a Business Enterprise

• R&D (Research and Development): Focuses on creating and designing new products.
• IT (Information Technology): Includes systems that support communication, information sharing, and new service offerings.
• Manufacturing, Production, or Operations: For goods-producing businesses, this area focuses on producing goods, while for service businesses it involves providing services.
• Marketing: Responsible for promoting, selling, and managing products.
• Finance and Accounting: Ensures the company has the financial resources to operate and reports on financial performance.
• Human Resources (HR): Recruits, hires, develops, and supports employees.
• Business Services: Assist companies with specific needs in areas like law, banking, real estate, etc.

Operations Management

• Involves the management of people and processes involved in creating goods and services.

Professionalism

• Performing at a high level with purpose and pride.
• Key values include integrity, excellence, teamwork, respect, clarity in communication, and ethical behavior.

Etiquette

• Expected norms of behavior in any given situation.
• Essential for professional interactions.

Communicating Effectively

• Active listening, providing practical information, focusing on facts, clarifying expectations, and presenting persuasive arguments are key skills.

Digital Enterprise

• Companies that leverage digital systems as a core component of their value creation.

Disruptive Innovation

• Innovations that fundamentally change markets, creating new industries and professions.

Digital Transformation

• Reimagining a company's business model and operations to become a digital enterprise.

Business Ethics and Corporate Social Responsibility

• Ethics - Rules or standards governing personal or group conduct.
• Ethical Behavior includes fair competition, honest communication, and avoiding harm to others.
• Eco-Sustainability: Addressing social problems through business practices.

Team Conflict

• Constructive Conflict promotes problem-solving and innovation.
• Destructive Conflict hinders team progress and performance.

Types of Conflict

• Structural Conflicts: Stem from the inherent structure of a business.
• Situational Conflicts: Arise from temporary factors within a company or industry.
• Interpersonal Conflict: Based on personal choices, behaviours, and personality differences.

Solving Conflict

• Proactive attention, open communication, research, flexibility, fairness, and alliances are helpful approaches.

Unstructured Organization

• Has a flexible, non-traditional structure, assembling talent as needed.
• Benefits: Increased agility, lower costs, flexible workforce, access to diverse talent, and competitive advantage.
• Disadvantages: Complexity, potential control issues, uncertainty, and challenges with loyalty, career development, and accountability.

Taskbot

• Software agents designed to perform tasks within an app or system.

Robotic Process Automation (RPA)

• Software that automates high-volume, knowledge-based tasks, often involving paperwork.
• RPA is designed to boost efficiency and process accuracy.

The Art and Science of Marketing

• Marketing is the process of creating value for customers and building relationships to capture value in return.
• Needs are fundamental differences between a person's ideal and actual state.
• Wants are specific desires for goods, services, or experiences.
• Customer Experience: The overall impact of a customer's interactions with a company.
• Touchpoint: Any point of interaction between a company and its customers (online, phone, in-person).

Consumer and Organizational Markets

• Consumer Market: Individuals and households buying goods for personal use.
• Organizational Market: Companies, government, and other organizations buying goods for resale or use in production.

The Consumer Decision Process

• Cognitive Decision-Making: Rational, data-driven approach involving careful consideration.
• Habitual Decision-Making: Based on routine and established patterns.
• Affective Decision-Making: Driven by emotions and feelings.
• Cognitive Dissonance: Tension when beliefs don't align with behavior.
• Buyer's Remorse: Regrets after making a purchase.

Factors Influencing Purchases

• Culture, socioeconomic level, reference groups, situational factors, and self-image all play a role in consumer decisions.

Organizational Purchasing

• Emphasizes economic factors, formal processes, complexity in product use, multiple decision-makers, and close buyer-seller relationships.

Strategic Marketing Planning

• Involves evaluating a company's current situation, assessing opportunities, setting objectives, and developing a marketing strategy.

Market Share

• A company's portion of total sales within a market.

Marketing Strategy

• An overall plan for marketing a product, covering target market segments, positioning strategy, and the marketing mix.

Market

• A group of customers with a need or want for a product and the ability to purchase it.

Market Segmentation

• Dividing a diverse market into smaller, more homogeneous groups with similar needs, wants, and behaviors.

Demographics

• Statistical characteristics of a population such as age, gender, income, race, and occupation.

Psychographics

• Classification of customers based on psychological factors like interests, lifestyles, and values.

Geographic Segmentation

• Grouping customers based on their geographic location.

Behavioral Segmentation

• Categorizing customers based on their product relationships or responses to product characteristics.

Target Markets

• Specific customer groups or segments that a company aims to sell to.

Marketing Approaches

• Undifferentiated Marketing (Mass Marketing): Ignoring customer differences and offering a single product.
• Differentiated Marketing: Aiming at multiple target groups with different products.
• Concentrated Marketing: Focusing on a single market segment.
• Micromarketing/Individualized Marketing: Targeting very small groups, even individual customers.

Positioning

• Developing a specific brand image and perception in the minds of target customers.

Marketing Mix

• The four key elements of marketing strategy:
  • Product: A bundle of value that satisfies a customer need or want.
  • Price: The amount charged for a product or service.
  • Distribution Channels (Marketing Channels): Systems for moving goods from producers to customers.
  • Customer Communication: Activities used to communicate with and promote products to target markets.

Promotion

• Persuasive techniques used by companies to communicate with target markets and the general public.
• Types of promotion include informing, persuading, and reminding.

Marketing Analytics

• Tools and techniques for planning and evaluating marketing activities.
• Goals include increasing revenue and profits while improving marketing efficiency.
• Key functions include tracking the customer journey, measuring effectiveness, testing messaging, optimizing ad placement, prioritizing customers, and understanding competitor activities.

Explore the essential concepts of developing a business mindset. This quiz covers key aspects such as profit, competitive advantage, and the Business Model Canvas. Test your understanding of value propositions, customer segments, and more.