COMM 1800 - Business Structure and Marketing PDF

Section II 10/03/2024 All businesses have a structure “The arrangement or relationship of positions within an organization..that guide activities and contribute to obtaining organization objectives” - Follows from division of labor (smith) - Results in hierarchy (weber) - Includes...

Section II 10/03/2024 All businesses have a structure “The arrangement or relationship of positions within an organization..that guide activities and contribute to obtaining organization objectives” - Follows from division of labor (smith) - Results in hierarchy (weber) - Includes rules and regulations to control behavior Sources of structure - Design - businesses choose structure (power of situation, if you are a startup you get to make the rules, choose the board, etc. rules driven by individuals) ex: Zappos - shay wants to do nothing, Apple - steve job known as control freak, no decision made without being run through him, risky to move so slow, but very centralized in terms of decision making - Context - environments affect structure - rules, decisions, structure driven by context, United Airlines: before you get on plane pilots have checklist, can't take off until they do, catch something and report, if anything in the checklist fails plane is canceled Dominion Energy: Microsoft is building big data towers? Assigning Tasks What do people do? Who does what? Differentiation - Specialization (aka Differentiation) - Horizontal - how many different jobs - Vertical - how many levels (from CEO to entry level employee) - Departmentalization - specialize based on departments - Functional - Marketing, HR Operations - Product - Snacks, drinks, sports, ex: pepsi - Geographic - U.S., Europe, Asia - Market - luxury, business, leisure, ex: british airlines Assigning Responsibility - Centralization - fewer people making decisions - Delegation of Authority - Responsibility v. Accountability - Who makes the decisions?  - Span of management - wide vs. narrow (wide span means one person is responsible for a lot of people) (managers have wide spans, smaller more centralized orgs have narrow spans) (TYPICALLY as orgs get bigger they become decentralized) - Larger - generally more decentralized Assigning Rules - Formalization - how formalized are the rules - Follows from bureaucracy - De facto (by the fact, informal) vs De jure (formal/according to the law, written down) - Handbooks, rules, procedures (As orgs get bigger/develop, tensions emerge) - Ex: United Airlines is de jure, their rules are written down - UVAHealth also de jure Teams in Organizations - Groups vs Teams - Committees - generally permanent - Task forces/project teams - specific change - Product Development Teams - Quality Assurance Teams - Self-directed teams - put team together tell them to figure it out, not put on high risk issues, use if looking for creative solutions Conclusions about structure - Inherent tensions (as companies get bigger they want to decentralize, delegate authority, and maintain control) - Specialization vs. Integration - Formality vs. Flexibility - Impacts many other business functions - Driven by design and context - Equifinal Marketing Definition: “Identifying, anticipating, and satisfying customers’ needs and wants while achieving business objectives. Involves researching, communication and delivering offerings that bring value to customers.” - Part of the broader system - Driven by exchange Marketing Basics - Creating value - definition of business - Marketing Concept - establish relationships - Product - industrial revolution - Sales - as supply exceeded demand (20s) - Market - meeting customers needs (50s) - Value - quality for the money (00s+) 10/08/2024 Marketing Marketing Basics - Market - B2B and B2C (business to business or business to customer) (ex: boeing sells to airlines, who in turn sell you tickets) - Segmentation - subgroups (companies break down their potential customers into subgroups based on location, demographic, etc.. - Target Market: (particular group, place, location, time, thats who we market to because of limited marketing budget/resources) (Ex: RyanAir’s target market is consumers, low budget tickets, United Airlines offers more for a higher price - Positioning: Where do we fit in this competition/in the market? Ex: RyanAir positions itself to appeal to particular travelers, mainly in Europe, low cost, UnitedAirlines AD: off to adventure, excitement, offers more, friendly Developing a marketing strategy Segment > Target > Position - Segmentation & Targeting - Total/undifferentiated - Ex: Ice cream, you don’t need to target a specific audience, just make it seem good - Segmented/Differentiated - Target people who specifically like vanilla, or choc - Niche/Concentrated - Very specific, targeted at people who are line ice cream connoisseurs, costs more, takes more work, likely to have more success - Micro/customized - Ex: Coldstone, make your own, you get exactly what you want Positioning - How brand is perceived, Ex: Ikea (USA), fam friendly, sells low cost furniture, easy to assemble, restaurants, grocery stores. Ex: Ikea (China), expensive, stylistic, european furniture store, smaller furniture - Maintain and improve brand equity Ex: Boars head, deli food provider, incident people died, their equity tarnished, Boars Head now has to clean up, apologize, rebuild to be a premium food provider again The Marketing Mix - The 4 Ps - Value Proposition - why buy from you? - Not buying, but solving a problems - the more money you're spending the less the company wants you to think about how much you're spending, companies that are selling higher end things focus on showing their customers that they are “solving a problem” - Ex: Patagonia and Home Depot 1) Product - creating value (what are we delivering to you, why is it valuable) - Goods, services, and ideas that satisfy demands 2) Price - capturing value - Is the exchange reasonable, marketing plan is designed to make you think that it is - Money, time, energy 3) Place - creating convenience & comfort - Availability - Supply Chain 4) Promotion - communicating value - Design (ads, logos, color scheme, product designs, building, are a way to communicate value to you, what it's doing) - Advertising (last step of marketing) Ex: Amazon 10/10/2024 Accounting: Structure of marketing? The marketing mix - the 4 Ps Product, Price, Place, Promotion H&M vs Gucci Logos. Color schemes, promotion more effective Factors affecting the 4 P’s - Marketing Research - a lot here (quantitative - websites, data and qualitative - surveys) - Demographics on product reviews - Data brokers ( other companies collect data on you and sell it) (Ex: National Public Data) - Consumer behavior (what motivates to buy something vs not) - Individual psychology (specific things that catch our attentions) - Social Factors (other people are buying this, influenced) - General and Specific Environments (economy, govt, legal, customers, etc affects marketing plan Product strategy steps - Develop and screen ideas (varian/selection) - New designs, new colors, layout, etc - Business analytics (internal selection) - Product development - Describe (manifestation, characteristics), predict (what's going to happen? How much to sell? where?), prescribe (Commit or change?) - Test market (external selection) (companies have focus group, certain locations, different cities) - Commercialization (possible retention) (could be internally or externally retained) Other marketing issues (connections) - Product lifecycle/dynamism (ex: mercedes benz, life cycle of that model is 6-8 years, android has short life cyle and is constantly dynamic) - Distribution/logisitcs (how do I get it, where do I need it to go) (Ex: flower trucks, they do it all themselves, UPS logistics company - Push vs Pull (Ex: starbucks on alternate corners, they push coffee to you, make it available, encourages, Pokemon Go is example of pull, the thing is out there give us more of it) (social influencer/marketing is pull) Ethics and marketing (connections) - Promotion - Data privacy (ex: facebook) - Misleading product information - Pricing - Bait and switch pricing (you advertise something at a certain price, you buy and they give you different option)  - Hidden fees (Ex: Hotels.com) - Predatory Marketings - Mortgages and car loans (Redlining - loans and rates affected by demographic, high risk vs low risk - CSR + Marketing - Satisfy consumers and enhance well-being Conclusions about marketings - Key business factor (finding something that is valuable to you and them) - Exchange - Create value - Equifinal Accounting “Accounting is recording, classifying, summarizing, and interpreting financial transactions and events to provide accurate information about an organization’s financial status and performance” > Part of the broader system > Point in time > Interpretation Who uses accounting? - Internal stakeholding - Executives - Managers (responsible for generating revenue, taking inventory) - Owners/Investor ( how is my company doing, how much are we spending, etc) - Managerial Accounting - Future perspective - TImelines for planning/control - Formats can vary - External stakeholders - Governments, suppliers/distributors, customers - Competitors (accounting info is available in public companies) - Financial accounting (external, what people need to know about our business, look at your numbers) (Ex: GAAP) - Historical perspective - Precision and verifiability - Standard rules and procedures - GAAP 10/17/2024 Accounting Equation Assets = Liabilities + Equity (any of these can be positive or negative) - Assets - all resources owned/owed (stuff you have and your company owns or people who owe you) (Ex: companies own buildings/equipments, inventory, machinery, land, cash, intellectual property) (BMW: SC Plant: $12.5 Billion, publicly traded, privately sold, Amazon Net Inventory: $34 Billion, United Airline Airplanes: $48.5 Billion, Google Cash: $111 Billion & Accounts Receivable: $49 Billion - Liabilities - all obligations owed (what the company owes somebody else in any way, shape, or form) (Ex: Taxes, Debts, Wages) - Equity - assets that are claimable by the owners (Ex: Personal Investments, Accumulated Profits, Stock held) Double-entry bookkeeping - Record every transaction twice - Debit to one, credit to another (keep track of how much something is an asset and liability, and see how much equity) (Ex: Buy supplied with cash? Increases assets and decreases assets) (Buy supplies with debt? Increases assets and increases liabilities) - Exercise on Canvas - Assignments Exercises/Practice Financial Statements - Income Statement: Revenue - Expenses = Net Income (Loss) - Boeing sold 13 Billion in stuff/services, Total revenue 16 Billion - Gross Profit Margin: Gross Profit/ Net Sales (Gov’t interest) - For every $1 of sales, 0.xx of gross profit - Net Profit Margin; Net income/Revenue (sales - adjust) (Owner or employee interest) - For every $1 of revenue, 0.xx of income) - Reported in SEC 10-0 - Balance Sheet, A = L + E - Profitability - profit from ops - Liquidity - cover short term obligations (cash on hand or cash expected in the near term) - Solvency - cover long-term obligations (how much cash in short/long term) - Efficiency - ITO to generate revenue - Leverage - amount of debt to finance operations - Statement of Cash Flows  - Operating activities (whatever your day to day operation is, it is going to generate money) - Investing activities (Ex: real estate, bonds, broader market, land, anything that generate revenue) - Finance activities (borrowing money from somebody else, ex: bank, loans) - Statement of Owner’s Equity - Changes due to investments/withdrawals - Supplemental to the balance sheet - Limitations - Does not capture non-financial factors - Position, brand equity, cust sat (does not capture positive aspects) - Many estimates (e.g., depreciation) - “Creative accounting” possible - Industry, country, limit comparability 10/22/2024 Know chapter 16 Standards - GAAP (IFRS) - relevant, reliable - Compare companies (if relevant, reliable, make reasonable comparisons) (Ex: IRS tax form) - SEC - transparent, accurate (regulatory, double checking - Protect investors (investigations, prosecution) Ethics - Accounting Fraud - Recording future sales in current quarter (make it look like they have more money) - Keep debts/obligations off balance sheet - Faked invoices to inflate revenue Conclusions about accounting - Key business function (works with marketing/finance) - Reporting financial transactions - Accuracy is key - Interpretation and ethics Money and Finance American Financial System - basics - The Federal Reserve (1913) (central monetary controlling systems) - 12 regions - Four responsibilities: - 1) Monetary policy - buy/sells treasury bills (give gov loan in turn gov gives cash) (money is supply and demand system) ( add cash to system or take cash out of system) (reserve requirement: has to have a certain  amount of money at all times) (Discount rate - this is how much we are willing to pay for t-bills) (economy good = high interest, low economy = low interest rates) (credit controls) - 2) Regulate institutions - rules and policies, mergers (first union buying wakovia, fed reserve had to review merger and approve it) - 3) Check clearing - 4) FDIC - $250,000 - insurance fund, funded by banks, money is available, economy has what it needs, checks get process, etc, protected/covered by insurance - Banking institutions - Commercial banks (ex: citibank) - Savings and loans (do not provide credit cards, business/bank loans) - Credit unions (offer services to members of specific group) (nonprofits) - Non-banks (ex: walmart trying to get into banking business, other retail) American Financial System - future - Cashless society (Ex: apple pay, google pay) - Cryptocurrency (Ex: bitcoin) - Robo/AI investing (Ex: fidelity) - Non-banks funding sources (Ex: kickstarter) Finance Definition “How businesses raise capital, invest in assets, and manage financial risk” >Facilitates financial transactions > Interdisciplinary > Considers assessment of risk (tolerance) Finance basics - Capital structure - Debt (loans) vs, equity, (cash, stock) - D/E ration - how risky is the borrowing practice - Factors - Lifecycle stages - e.g. startup vs midlife - Industry - e.g. energy vs tech - Leadership/firm preference - risk tolerance - Capital budgeting - Long term investments (what do I need to invest in now that will pay off in years from now) - Strategic direction - growth vs stability - Alignment w/ long-term goals