Unit One- Business

Definition and Concept of Business

The business objective is what makes the business go on and conduct its activities in a long run.
It is the reason why the business exists. While most of the people argue that profit making is the
core objective of every business. Few have come up with the new underlying objective.
According to the traditional concept, business exists only to earn profits by providing the goods
and services to the customers.
According to the modern concept, the underlying objective of every business is customer
satisfaction as this is what results in most profits. If the customer is satisfied, business excels.
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1. Getting and Staying Profitable
Maintaining profitability means making sure that revenue stays ahead of the costs of doing
business. Focus on controlling costs in both production and operations while maintaining the
profit margin on products sold.
2. Productivity of People and Resources
Employee training, equipment maintenance and new equipment purchases all go into company
productivity. Your objective should be to provide all of the resources your employees need to
remain as productive as possible.
3. Excellent Customer Service
Good customer service helps you retain clients and generate repeat revenue. Keeping your
customers happy should be a primary objective of your organization.
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4. Employee Attraction and Retention
Employee turnover costs you money in lost productivity and the costs associated with recruiting, which include employment
advertising and paying placement agencies. Maintaining a productive and positive employee environment improves retention.
5. Mission-driven Core Values
Your company mission statement is a description of the core values of your company. It is a summary of the beliefs your
company holds in regard to customer interaction, responsibility to the community and employee satisfaction. The company's
core values become the objectives necessary to create a positive corporate culture.
6. Sustainable Growth
Growth is planned based on historical data and future projections. Growth requires the careful use of company resources
such as finances and personnel.
7. Maintaining a Healthy Cash Flow
Even a company with good cash flow needs financing contacts in the event that capital is needed to expand the organization.
Maintaining your ability to finance operations means that you can prepare for long-term projects and address short-term
needs such as payroll and accounts payable.
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8. Dealing with Change
Change management is the process of preparing your organization for growth and creating processes that
effectively deal with a developing marketplace. The objective of change management is to create a dynamic
organization that is prepared to meet the challenges of your industry.
9. Reaching the Right Customers
Marketing is more than creating advertising and getting customer input on product changes. It is
understanding consumer buying trends, being able to anticipate product distribution needs and developing
business partnerships that help your organization to improve market share.
10. Staying Ahead of the Competition
A comprehensive analysis of the activities of the competition should be an ongoing business objective for your
organization. Understanding where your products rank in the marketplace helps you to better determine how
to improve your standing among consumers and improve your revenue.
11. Creation of utility – a. Time b. Place c. Form/Design d. Possession
CHARECTERISTICS OF BUSINESS
Types Of Business
Businesses can be classified into but are not limited to 4 types. These are –
Manufacturing- Manufacturing businesses are the producers who develop the product and sell
it either directly to the customer or the middlemen to conduct sales.
Examples of manufacturing businesses are steel factories, plastic factories, etc.
Service- This type of business deals in selling intangible goods to the consumers. Unlike tangible
goods, services cannot be stored or separated from the provider. Service firms offer professional
services, expertise, commission-based promotions, etc.
Examples include salons, schools, consultancy etc.
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Merchandising- Merchandising is a middlemen business strategy where the business buys
products from a manufacturer, wholesaler, or other partners, and sells the same at the retail
price. It is usually known as a ‘buy and sell’ business as they make profits by selling the products
at a price higher than their cost price.
Examples of a merchandising business are grocery stores, supermarkets, distributors etc.
Hybrid- Hybrid businesses have the characteristics of two or more types of businesses explained
above. For example, a restaurant develops its own dishes (manufacturing), sells the products like
cold drinks which are manufactured by other businesses (merchandising), and provide service to
the customers (service).
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What is a profession?
The word “profession” means different things to different people. But at its core, it’s meant to be
an indicator of trust and expertise.
Traditionally, a “professional” was someone who derived their income from their expertise or
specific talents, as opposed to a hobbyist or amateur. This still carries through to fields today,
such as sport.
But given today’s fast-changing environment of knowledge and expertise, it’s now generally
understood that simply deriving an income from a particular task might make you an “expert” or
“good at your job” – but if you’re a “professional”, this has a broader meaning.
There’s a long history of attempts to clarify this meaning, and to define the functions of
professions. These attempts typically centralize around some sort of moral or ethical foundation
within the practice of a specific and usually established expertise.
What is Employment?

Employment is an agreement between an individual and another entity that stipulates the responsibilities,
payment terms and arrangement, rules of the workplace, and is recognized by the government.
For e.g.
Jonathan’s Shipyard is looking to hire a new batch of employees. The organization proceeds to rent out an
ad in the local newspaper to spread awareness about open job positions. They filter the remaining
candidates, so that only the ones most suitable for the position remain. Once Jonathan’s Shipyard has
completed the interview process, they make job offers to the finalists. They each accept the offer. However,
in order for their employment to be official Jonathan’s Shipyard must follow the proper procedures.
They verify each candidate’s residency as an American citizen, collect two forms of identification, and have
the candidates fill out the corresponding tax forms for IRS and financial reporting purposes. Once the
finalists have completed these steps, the employer has the candidates sign a formal agreement that states
both parties acknowledge and accept the terms and conditions of the employment. Jonathan’s Shipyard
also acknowledges that if any of the terms in the agreement do not adhere with United States’
employment law then they may be subject to civil injunction, fines, and even criminal charges.
ITC Business strategy-Case Study

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