The Internal Functions of a Business PDF

# The Internal Functions of a Business **Did you know...?** The business landscape in Spain is primarily made up of SMEs (small and medium-sized enterprises). In micro and small businesses, some functional areas don't exist. They typically emerge as the company grows into a medium or large size, b...

# The Internal Functions of a Business **Did you know...?** The business landscape in Spain is primarily made up of SMEs (small and medium-sized enterprises). In micro and small businesses, some functional areas don't exist. They typically emerge as the company grows into a medium or large size, because in micro or small businesses, most functions are managed by one person or outsourced. ## 1. The Internal Functions of a Business Before analyzing the structure of a business, we'll dedicate some time to discussing the functions it performs, i.e., the internal functions or functional areas of a business. A business is divided into a series of functional areas or departments. The departments, while having specific goals and characteristics, work together to coordinate and achieve the business objectives. In this section, we'll define the functions of each functional area, going into more detail in subsequent units. Generally, businesses are composed of four functional areas, although some may not need all of them: * **Commercial Area** * **Production Area** * **Finance and Investment Area** * **Human Resources Area** ## 1.1. Who can the business sell to? The Commercial Area The role of the commercial area or department is to perform all the activities necessary to bring the goods and services produced to consumers. However, it's considered to have two main functions: 1. **Market Analysis**. This function precedes the production stage and involves analyzing the needs of consumers and attempting to identify or create new ones through market research and analysis of the competitive, social and economic context, allowing for the development of competitive advantages. This stage involves researching potential customers and the market, often through methods like surveys and observation. Selecting the right sample group is crucial for accurate conclusions about the business. 2. **Marketing Strategy**. This is perhaps the most impactful function of the commercial department. It involves designing a suitable commercial policy for selling the product or service developed by the business, using various marketing strategies. These include: * Defining the price * Advertising * Sales promotions * Distribution of the product or service ### The Commercial Area The image shows a diagram with two interconnected boxes: **Analysis of the Market** * Conducts market research to detect changes in consumer preferences and the environment. **Marketing Strategy** * Develops the best strategy to maximize sales and meet customer needs. **Did you know...?** Marketing comprises a set of activities performed by a business to meet consumer needs and generate profits. In this sense, there's the **marketing mix**, which includes four elements (the 4 Ps): * **Product** * **Price** * **Promotion** * **Place** This topic will be unpacked in more detail in Unit 4.