Bussines management - Schemi

Business Management

Business and society

Business: An organization that is engaged in making a product or providing a service for a profit.

Society: Human beings and the social structures they collectively create.

Business and society are highly interdependent. Decisions must analyze the impact on society, and society has an impact on business decisions; new laws can get in the way (ostacolare) of business life. Business has an impact on society; negative externalities may affect society.

Management theories

Management theory: Business firms are embedded in a broader social environment with which they constantly interact.

Ownership theory: Business is seen as the property of its owners. They have to maximize results and create as much money as possible. The interests of owners are more important than others.

Stakeholders

Stakeholders: A group of persons that affect or are affected by business decisions.

Stakeholder theory: Corporations must create value for society, not only money to survive.

Stakeholder matrix

Types of stakeholders: market (employees and managers) or non-market (not employed).

Market: Engaged in business economic transactions for goods or services.

Non-market: Persons or groups that affect or can affect business decisions but not directly.

Stockholders are external but affect business decisions.

Customers are external stakeholders; they influence because of feedback and fidelity.

Customer: Business to consumer movement of goods.

Client: Business to business movement of goods; interrelated in the supply chain. Someone can be BtoB and BtoC; for example, trains (Caffè Illy Trenitalia are key clients). Illy sells to businesses, but consumers have no choice on the train.

Suppliers determine the quality of the final product. Wholesalers and retailers are crucial for implementing sales.

Stakeholder analysis

Important process made by managers by processing and analyzing stakeholder interests and power.

• Who are relevant stakeholders? Draw a stakeholder map and understand which group is relevant in every situation.
• Analyze stakeholder’s different interests: Take information on why stakeholders are linked with the firm or their preferences.
• What is the power of each stakeholder? The power of making an event happen or securing a desire. There are five types: Voting, Economic power, Political power, Legal power, Informational power.

Sustainability

Being sustainable means protecting the environment, and the pandemic has brought a sense of social responsibility, as indicated by the SDG (Agenda 2030) proposed goals of sustainability. Social and environmental balance is crucial.

Companies can be influenced by the government, and they can affect government decisions. Businesses must invest to build back better and sustainably, including products, services, and resources. Corporate investments need to be sustainable, prompting spending. Consumers want to buy at low prices, leading to cost problems and the transition to a net zero future. Consumer interactions affect sales, product design, marketing, point of sale information, and advanced analytics.

Trade-offs

Managed in the decision-making process using proprietary solutions and benchmarks.

Real vs fake green

Green marketing: Including sustainability in business and offering sustainable products.

Greenwashing: Demonstrating that the business and its products are sustainable without sufficient reason; usually fake sustainability.

Business plan

A business plan sums up all plans for marketing and sets goals. Managers have to plan for the next year to support company decisions.

Vision: What the business wants to become.

Mission: What the business does to achieve its vision.

Values: Behaviors that support the vision and mission.

Broad aims and objectives: What the business must do to achieve its goals.

Enabling factors: Things to fix to support the changing process.

KPI (Key Performance Indicators): Measurable values that demonstrate the effectiveness with which a company achieves its main business objectives, allowing evaluation of success in achieving them. Organizations use multi-level KPIs to achieve goals.

Vision statement: General goals of a company (what to become).

Mission statement: Firm's goal and competitive advantages, philosophy and ethics, relational and target markets, and business purpose.

In the mission, you find the general reason why a consumer should buy a certain product from that company.

Examples:

• VISION: Speak with people, portfolio, partners, planet, profit, productivity.
• MISSION: Speak about the world, happiness, and an optimistic new way, create value, and make a difference.
• VALUE: Speak about leadership, collaboration, integrity, accountability, passion, diversity, quality.

Not only about economy; also looking at social aspects.

Market dynamics

Substitutes yearly growth with social growth. Share of market: A signal of competitiveness, allowing understanding of the opponent's position compared to yours.

Market Leader: The highest market share in a category, allowing you to set the price.

Private brands of retailers (e.g., Coop or Lidl) offer the same quality to promote the brand. A good price/quality ratio increases market share due to consumer fidelity and new consumer acquisition.

Consumer fidelity is important as they can promote the brand to others. Customer loyalty is analyzed by calculating the number of customers enrolled in loyalty programs divided by total customers.

Manager tests: Used by managers for evaluation.

Rule of 1/3 1/10: If satisfied, a person tells 3 people; if not, tells 10 people.

Market share analysis

If I can’t satisfy 1 person, I have to work harder not to lose 10.

Two types of market share: in volume and value (money). Total market in volume and value.

Sales competitor A: Quantity sale A = average market price = total market value/volume. Market share in volume competitor A = sales comp A/total market in volume. Market share in value competitor A = sales comp A/total market in value. Price index comp A = sales in value/volume competitor A.

If market share value is lower than market share in value, the price is cheaper than the average. The most important market share is in value. A price higher than the average when you sell.