BA101 study guide Chapter 1 Economics Social Science that deals with consumption production distribution of goods and services and with the theory and management of economies or economic systems Demand is the quantity of goods and services that consumers are willing to buy at different prices Supply is the quantity of goods and services that businesses are willing to provide at those different prices Private enterprise requires 4 things 1 Private Property 2 Freedom of choice 3 The right to keep profits 4 Fair competition Specialization is a measure of how broadly or narrowly defined the range of included activities are Economic Cost the money spent implementing the decisions Opportunity Cost is the cost of what you gave up not the sum of alternatives but the benefit of the single alternative Business an organization that seeks a profit by providing goods that satisfy the needs or wants of people Product good service or idea that has tangible or intangible characteristics Profit basic goal of the business the difference between what it cost to make a product and what the product sells for Stakeholders a group of people who have an interest in the actions a business takes four groups owners employees customers citizens Marketing the activities that are designed to provide goods and services that satisfy the customers Market research pricing promotion and distribution 1 Accounting the process that tracks summarizes and analyzes a firms financial position Production the activities and processes that are used in making the products Finance the activities that are concerned with funding a business and using resources effectively Planning determining what the organization needs to do and how to get it done Organizing arranging the organizations resources and activities in such a way to make it possible to accomplish a plan Operating enacting the plan including guiding and motivating employees to work toward accomplishing necessary tasks Controlling Measuring and comparing performance to expectations established in the planning process and adjusting either the performance or the plan Effective means doing the right thing Efficient means doing things right Chapter 2 Marketing Marketing Defines your strategy for competing in the marketplace Market Research To determine the need so fits customers Market Mix To determine how to satisfy those needs through addressing the four P s of marketing mix 1 product 2 price 3 place 4 promotion and service Market Strategy To analyze its competitive advantages plans and actions Target Marketing To select specific markets to serve 5 areas of the marketing program 1 products and services narrow product line specialized services 2 Price allow customer to pay for It before or after the fact Higher prices mean lower volume 2 3 Promotion adverstising salesmenship 4 Place or distribution channel location or distributor 5 Service customer service Market research Systematic gathering of information about your customer base Steps 1 define the problem opportunity 2 assess available information 3 gather additional information 4 external data and secondary research 5 primary research 6 organizing and interpreting data 7 making decisions and taking action 8 assessing the results of the action Target Marketing Geographic segmentation focusing on the needs of the customer based on their geographic location Demographic Segmentation focusing on the attributes of market based upon gender age income education or other measurable factors Physiographic Segmentation putting people into groups based on beliefs or ideas they have Sales Forecast to attempt to predict your unit sales and revenue The process begins by assessing how the total market will perform you must look at how your competitors are doing Different types of forecasting Market forecast take your sales and add the growth rate to it potential forecast what you should have sold your potential in graph in fasttrack report December customer survey score add all the scores up and get a percentage of the one u want and use that percent to calculate how much to produce make sure you make the increase by either 10 20 for the next years total sales Diminishing return also referred to as the rate of diminishing return states that adding additional investment beyond a certain threshold will not add proportional returns for example Chapter 3 Accounting 3 Management Accounting provides vital information about a company to internal users helps managers plan operate and control a company s activities managers make more informed effective decisions Financial Accounting gives information about a company to external users external users people outside the company who need accounting info to decide whether or not to engage with the company GAAP Generally Accepted Accounting Principles principles developed to insure that information is relevant reliable material and valid Budgeting process of quantifying managers plans and showing the impact of these plans on the company s operating activities Cost Analysis defining costs of specific activities or products within a company Manufacturing Cost Reports reports used to highlight differences in cost for managers to analyze Balance Sheet summarizes the company position at the end of a given day Assets the economic resources that a company owns and that it expects will provide future benefits to the company Anything owned or under the direct control of a company is an asset Liabilities the company s economic obligations debts to its creditors Owner s equity the owner s current investment in the assets of the company includes the owner s original contribution Assets liabilities Owners equity Current Assets assets that can be converted into cash with a year cash currency readily available to the business accounts receivable the amount your customers owe because they purchased from you on credit inventory the product the business has on hand to sell Total current assets assets used to operate your business Fixed assets assets that have a long term use or value property plant and equipment purchase price for land buildings and equipment that you use to create your products services accumulated depreciation how much of the value of your plant and equipment you have used up while operating your business 4 total fixed assets net value of your property plant and equipment Total assets the value of all of the stuff in your company Liability and Owners equity where the money came from to get assets