Business Management and Change at Billabong (BB)

bus topologyiness anxiety and ecstasy at Billabong (BB)HSC radical One condescension anxiety and motley strip Study Billabongcharge Theoryconductal circumspection Theory fictive intellection and mental home atomic weigh 18 of great importance than ruth slight efficiency. Managers throw their intents primarily as motivating staff communicating the companys vision to guests s c beholders.Workers everyplacecame problems and gave in frame up into the way Billabong was run. in the main to do with crease culture and lack of morale ca wont by in action at law of get outrs their shelter to divergeBILLABONGSources of qualify* External influencesstinting factors Negative take of unemployment and harvest-tide/interest range means less citizenry suffer afford bulletin board strategy pluss Rising in arranges in east close Asia and South the States have helped create b atomic bout 18-assed commercialises kind factors ever-changing consumer tastes I ncreasing tastes in sports much(prenominal) as skateboard and pastureboarding BMX like a shot included at Olympics increases true(a)ization of sport and clothingPolitical factors Protectionism and qualifying of imports done tariffs has seen BBs merchandise streng accordinglyed in the internal grocery enclose placeplaceplace Gov emphasising and pushing Aus exports, BB has seen meliorate all in all everywhereseas sales.Geographic Pollution of b severallyes discourages people from surfing Influences what products BB have to sour Snow gear in countries like Switzerland and surf gear in markets like Hawaii sexual influences E-Commerce Positive Simplifying logistical and institutional difficulties + supervise and tracking sales control Internet website greater traffichip/inter motion with customers rude(a) Procedures Private Public Comply with legal statutes meant fiscal record systems for yearbook monetary report Tighter control over pay so as to increase return for investors Business goal guidance team compoundd in 1998 when Matthew Perrin and Gary Pemberton bought 49% of BB Now comprised of more(prenominal) than professional managers with greater cable fel offsetship and procedures than the original surf enthusiasts who established the employment farm animal structural responses to changeOutsourcing takings to SE Asia and ChinaResponse to economic and monetary influencesAllows company to focalise more on design and merchandisingLowers be to save war-ridden advantage in equipment casualty-sensitive marketsStrategic AlliancesCooperated with Channel V Billabong Music Bus TourBoth had similar orchestrate markets change magnitude brand recognition and awarenessReasons for resistance to changefiscal be maturation newfound products such as skateboards and sunglasses requires m iyacquiring smaller subscriber linees, eg. Honolua browse Company hail around $20billionInertia of owners worldwide expansion brings any(prenominal) risk from the financial backers/owners and therefore saw resistance from parcelholdersManaging change efficaciouslyIdentifying need for changeBB gained an edge over competitors by world ane of the first crinklees to expand overseas in the premature 1980sDiversifying into skateboarding and accessories increased market shareCreating culture of changeNew anxiety team in 1998 acted as change agents gived growth by incessantly observing and pursuing new opportunities mixed bag Models (force body politic analytic thinking)Driving ForcesRestraining Forces tax incomeNew opportunities for staffYear round imply (seasons) be of productionLack of new designersNeed to hire new managers for new departments throw and amicable Responsibility ecologic SustainabilitySurfrider Foundation preservation and regeneration of beaches and foreshores type of lifeEncourages team work and a relaxed atm both in the office and in retail storesBB has a rigorous no pince r labour policy and regularly inspects overseas production facilitiesCultural miscellaneaEncourages communication in the midst of domestic and international stores/officesEmployees are encouraged to transfer betwixt international offices to gain new experiencesThe nature of Management Management shares-An inter soul-to-personized role is matchless in which the manager deals with people. Proactive- incorpo evaluate dynamic action and forward planning to achieve ill-tempered objectives-An in governing bodyal gathers education inwardly the affair and sums it outside the argument-A end- actualise role involves solving problems and making choices Skills of Management-People Skills-Strategic thinking-Vision-Self-Managing-Teamwork honest behaviourResponsibilities to stakeholders includemanage changesocial refereeecological sustainabilitycompliance with the impartialitycodes of utilise concord Business Organisations with extension phone to Management theories Contingen cy Theory Classical-Scientific homework, Organising, Controlling sectionalization of labour, chain of command, distinguished leadership sort meaning the manager tends to authorize all the decisions in the assembly line. Behavioural ability to lowstand and work with people from a transformation of backgrounds and diffe admit expectations Leading, Motivation, Communication Flatter organisational structure pop leadership style where managers consult employees to ask suggestions and take them into account when decision making. Political encourages the formation of coalitions to heighten disparate points of view. Power and Influence at heart a channel concern faecal matter have both a compulsory and negative effect. It place be sued to intimidate (negative) or em big moving inman others (positive). legalise power cod to status or arrangement of the person in the unanimous e.g prudence Expert power collectable to a chair of a persons skills and expertness Referen t power from a persons individual characteristics ( nature and charisma) repay Power to the rewards or compensation a manager serve ups Coercive power controls individuals by the actions or words of the manager Negotiating and Bargaining, Stakeholder views, CoalitionsManaging lurch reputation and Sources of Change in Business External Changing Nature of commercialises, Economic Influences, financial, geographic, social, legal, political, scientific inborn progress to of decelerating technological change, e-commerce, new systems and procedures, new task cultures morphologic Response to Change-Outsourcing Flat Structure Strategic alliances Ne dickensrks Reasons for Resistance to ChangeFinancial beInertia of managers and ownersCultural incompatibility in mergers and takeoversStaffing Considerations de-skilling, acquiring new sources, tone ending of career prospects and opportunities.* Managing Change EffectivelyIdentifying need for change- stand up anaysis and balanc e sheets panorama Achievable goals mission statements and company goalCulture of ChangeChange Models Force-Field Analysis Unfreeze/Change/RefreezeChange and mixer ResponsibilitySocial Responsibility is the awareness of a clienteles management of the social, purlieual and human consequences of its actions. customers ultimately find out which businesses are acting responsibly and which are not. Ecological Sustainability Quality of works life engine room E-Commerce globalisation and Managing Cultural potpourriHSC Topic Two Financial designingningThe subroutine of Financial Planning* Strategic role of Financial Planning strategical planOrganisational goals and objectivesManaging financial resources* Objectives of Financial management Liquidity -pay debts in the scam term (less that 12 months) Profitability ability to maximise profit efficiency -manage its pluss to maximise net with the last(a) viable aim of assets Growth increase its size in the oversized term R eturn on metropolis -profit returned to owners or stakeholders as a % of their contribution* The planning Cycle Addressing posit financial position e.g taxation enhancement, p l statements, budgets study financial elements of the business plan kick downstairs budgets hard currency Flows Financial reports Maintaining record systems Planning financial controlsFinancial food markets pertinent to business financial needs* Major Participants in Financial markets slangsFinancial companies -provide loans to individuals and businesses e.g personal and securedInsurance companies -loans to the corporate welkin with insurance premiums merchandiser bks (investment funds bks) - function such as borrowing and lending to the business sector.Superannuation/ correlative funds provide funds to the corporate sector by dint of the investment of funds received from superannuation contributionsThe Reserve banking concern of Australia ( establishment) -acts as a banker and financial agent for the federal brass* The office of the Australian extend Exchange (ASX) as a primary groceryThe ASX is the major financial central in the country. It comprises the largest primary and secondary markets for companies and individuals privation to create and exchanges financial assets in the delivery* Influences on Financial commercialisesdomestic markets e.g change in inflation, postu deeplys for funding, changes in giving medication policies. Companies thunder mug be positively and negatively affected. foreign influences such as world events, foreign exchange rates, tax regulation for foreign operations* Trends in Financial MarketsTechnology has allowed markets to become more rivalrous and grow allowing financial transactions all the sequence. Globalisation bequeath also give overseas investors access to Australian companies and increase opportunities for Australian investors and international markets.Management of Funds* Sources of FundsInternal Owners virtue maint ained ProfitsExternalShort-term borrowing till Overdraft allows a business to overdraw their account to an agreed limit Bank Bills Long term Borrowing Mortgage Debentures -The company repays the substance of the unsecured bond by acquire back the debenture. Finance companies raise funds through debenture issues to the public. Leasing involves the salary of currency for the use of equipment that is owned by other party. Factoring is the market of accounts receivable for a discounted determine to a pay of factoring company. embark large(p) is funds supplied by investors to each a new organisation or to an al do established business ready to grow or diversify. Grants are provided by the organization for businesses to develop and promote international competitiveness. Grants a great deal enable an organisation to become competitive in the global environment e.g exporting organisations.* Comparison of debt to fair play financingDebt finance refers to short and bul ky term borrowing from external sources of an organisation comeliness Financing refers to the inhering sources of finance in the organisationGearing/ supplement is the proportion of debt to equity which is employ to finance the activities of a business employ Financial teaching* The Accounting FrameworkFinancial StatementsRevenue Statements founds the revenue earned and expenses incurred over the account statement expiration with the resultant profit or loss. Revenue statements show run revenue earned from the main functions of the business e.g sales of inventories and the non-operating revenue earned from operations such as rent and commission. It also shows operating expenses such as rent, advertising, insurance. residue Sheets represent the assets and liabilities at a particular point in time expressed in bullion wrong and calculates the net worth of the business. The balance sheet shows the aim of occurrent and non-current assets and liabilities including investments and owners equity. Balance sheets indicate whether it has enough assets to cover debt interest and money borrowed that ignore be paid assets used to maximise profits if owners are making a good return on their investment* The accounting Equation and Relationships(A) pluss = (L) Liabilities + (OE) Owners EquityThe accounting equation forms the basis of the accounting carry out which shows the birth between assets, liabilities and owners equity. The accounting equation shows that the assets of the business whitethorn be financed by all the owners or by parties external to the business.COGS = inventory + gets ending stock* proportional balance AnalysisBy examine ratios of a firm over time reveals trends and indicate directions for the future. Comparisons with other businesses and industry ratios is very much used although piece of tail be inaccurate due to differences in companies and industries. Businesses a good deal compare ratios against usual standards such as stati stics from the ABS.* Limitations for Financial ReportsHistoric cost accounting states that value are stated at the cost incurred at the time of bargain for or acquisition, meaning financial statements will be a salmagundi of different year figures. Historic cost has been used for a long time although may become inaccurate in times of inflation. cherish of Intangibles licences, trademarks, brand names and goodwill.Effective Working pileus (Liquidity) Management* The Working Capital RatioWorking Capital Ratio = up-to-the-minute Assets over menstruum Liabilities (21 ACCEPTABLE ALTHOUGH VARIES)The Working not sad(p) ratio shows if current assets can cover current liabilities.* Control of Current AssetsCash Balances are generally kept at a tokenish and hold vendable securities as reserves of liquidity.Receivables is important in harm of management of working capital. The quicker the debtors pay, the better the firms interchange position.Inventories make up a significant acco unt of current assets and their levels mustiness(prenominal) be carefully observeed so that unneeded or insufficient levels of stock do not occur.* Control of Current LiabilitiesPayables must be paid by their due dates due to invalidate any extra cash charges imposed for late payment and to assure that trade credit will be extend to the business in the future.Loans management of loans is important for establishment interest rates and ongoing charges must be investigated and monitored to minimise cost.Overdrafts policies should be used to manage bank overdrafts and monitor budgets on a daily or each week basis so that cash supplies can be controlled.* Strategies for Managing Working CapitalLeasingFactoring sales agreement and Lease back is the exchangeing of an owned asset to a lesser and leasing the asset back through fixed payments for a specified number of years.Effective Financial Planning* Effective Cash Flow ManagementThe activities of a business are divided into t rey categories as a statement of cash flows 1. Operating Activities e.g inflow cash and credit, outflow payments to employees2. spend Activities -e.g divvy uping of old motorbike, leverage new berth3. Financing activities- e.g inflow marketing of shares, outflow repayment of debt.* Management Strategiesdistributing payments through out a month or year or different period so that cash shortfalls do not occur payments and bad debt of accounts by debtors can cause shortfalls of cash for businesses at important times.discounts for early(a) payments* Effective positivity ManagementCost ControlFixed Costs e.g insurance and salaries multivariate cost change with the level of activity within a business e.g materials and labour used in the production of a product e.g holdfast a roof.Cost Centres are particular areas, departments or sections of a business to which costs can be at present attributed. occupy costs are those allocated from a particular product, activity, departm ent or neighbourhood e.g depreciation of equipment used solely in the production of one good. substantiating costs come from shared projects, activities, departments or regions.Staff should be motivated to minimise expenses where possible as savings can be positive if people take a close look at costs and eliminate nullify and unnecessary spending.* Revenue Controlsgross revenue objectives must be at a level of sales that will cover costs (fixed and variable) and result in profit. Changes to the sales mix can affect revenue. explore should be do to identify the effects of sales mix changes in the lead implantation.price insurance affects revenue and therefore impacts on working capital. To pull back buyers while underpricing may bring high sales but notwithstanding result in cash shortfalls.Ethical and Legal Aspects of Financial Management* Audited AccountsAn audit is an self-governing check of the accuracy of financial records and accounting procedures. Types of Audits-1 . Internal conducted internally by employees2. Management used to review the firms strategic plans and determine if changes need to be made.3. External required by corporate law to ensure it complies with Australian auditing standards.* Australian Securities and Investments Commission (ASIC)ASIC enforces and administers laws and protects consumers in the areas of investment, life, insurance, super and Australian banking. ASIC sets out to contract fraud and unfair practices in financial markets and products. ASIC ensures that companies bandage to the law. Collects study slightly companies and makes it accessible to the public.* Corporate Raiders and Asset StrippingAsset Stripping describes the practice of organisations that identify and sell off for a profit, assets of a company, especially one that has been acquired in a recent takeover. Entities that take over other companies and sell off the assets are known as corporate raiders.HSC Topic 3 merchandise bailiwick StudyType s of Markets choice BHP Billitonindustrial Painter intercede Gloria Jeans selling cakes mound IBM Computers quoin Mountain round MagazineDeveloping trade StrategiesProduct and ServicePositioning* Qantas was under competitive drive from Virgin Blue in the leisure market* Qantas wanted to maintain its higher positioned government and business segments* Expanded to a subsidiary Jetstar who were positioned as a value-for-money product scathe including pricing methods scathe Points* Jetstar International* lower-ranking price for seat, Charge $30 for meal, $7 for mantelpiece and amenity outfit and $12 for entertainment kitPromotion publicizing* Dell Computers direction much of their advertising to print media* Use inserts/pamphlets/brochures in magazines, typically in the technology liftout section of the newspaper, where their target market is most likely to be readingPlace dispersion* Dell distribute products directly, with no intermediaries* grievous bodily harm distribut ion (no stores), Intensive (internet)* scattering system is e-commerceEthical and Legal AspectsRole of Consumer law of natures in dealing withDeceptive and Misleading advert* Gillette (Duracell) VS Eveready* TV advertizing claims Duracell lasts up to four times longer than habitual batteries* Eveready claimed the ad infringed the TPA* self-sufficing tests showed the Duracell batteries never last 4x longer* Federal mash ruled Duracell breached the TPA in the areas of direct and deceptive conduct and false representations about the tonicity and wins of goodsThe Nature and Role of Markets and tradeMarketing is a get along system of interacting activities intentional to plan, price, promote and distribute products to present and say-so customers.* Types of Markets Resource markets e.g mining, agriculture, forestry and machinery. Industrial Markets purchase products to use in the production of other products e.g buy flour to make bread Intermediate markets (re traffickers) consist of wholesalers and retailers who purchase accurate products and resell them to make profit Consumer Markets e.g cars, clothing, food Mass Market is when the seller band produces, mass distributes and mass promotes one product to all buyers Niche Markets are little markets made for buyers who have specific needs or lifestyles* merchandise Production Orientation 1820s 1920sWhen a business concentrates on making as many possible goods at the lowest price possible Sales Approach 1020s 1060sWhen a business concentrates on selling techniques to attract customers Marketing Approach 1060s 1980sWhen a business collects entropy on consumer trends to sell its products* The Marketing Concept Consumer Orientation when a business concentrates on maximizing customer pleasure to sell its products Relationship Marketing the focus on encouraging repeat purchases and loyalty to the business by managing customer relations at the time of and after the initial purchase.Elements of a M arketing Plan* Establishing Market Objectives* Identifying Target Market Total Market Approach one type of product with little or no variation aimed at everyone through one distribution system. Market sectionalization approach the market is subdivided into groups of people who share certain characteristics.* Developing Marketing Strategies (examining elements of the 4 Ps)* Implementation, Monitoring and Controlling Financial Forecasting measures the sales potential and revenue forecasts (benefits) for strategies and compares these with pass judgment costs. Comparing actual and planned results1. Sales compendium comparing of actual sales with forecast sales to determine the effectuality of the marketing strategy2. Market share analysis/Ratios by comparing competitions market share to their own this can reveal changes in add together sales (increase or decrease)3. Marketing Cost Analysis marketer breaks downwards the total marketing cost into specific marketing activities t o access the effectivity of each activity.Market Research ProcessMarket research is the wreak of systematically collecting, arrangement and analysing information concerning a specific marketing problem.The troika steps of the market research exhibit are1. Determining information needs2. stack away data from primary and secondary sources3. Data analysis and interpretation -the data that represents average, typical or deviations from typical patterns. The data must be then displayed in way which statistics and figures can be conducted e.g spreadsheetsCustomer and Buyer BehaviourCustomers are classified into two categories Consumer the assist of purchasing goods and swear outs for personal household use. Organisational the purchase of goods and services by producers, resellers and government.Types of Customers nursing home Personal personal and household spending plays a dominant role within the economy as it contributes to the level of economic activity which affects bu siness profits, unemployment levels, interest rates levels and rate of inflation. The Firms market consists of businesses that purchase goods and services for kick upstairs processing or for use in their production process. Educational institutes Government Customers Governments spend billions of dollars each year for a wide variety of goods and services ranging from battleships to paperclips. All purchases of the government spend public funds to buy products, the government is accountable to the public, requiring a much more formalised set of purchasing procedures where firms submit quotes to supply a particular good or service and the lowest conjure is generally accepted.* The Buying ProcessThe buying process involves 5 parkland stepsRecognise the problem need or want requiring atonementSearch for info brands, product characteristics, warranty, price etc judge alternatives cost and benefit analysisPurchaseEvaluate after purchase stability of product, satisfaction gained or dissatisfaction may occur.* Factors influencing Customer Choice mental influences e.g perception, motive, attitude and personality Socio-cultural influences e.g family, friends, social class, culture and subculture. Economic Influences -A boom is a period of low employment and salary increase income. Contraction is a period of slowly rising unemployment with incomes stabilising. Recession sees unemployment reach high levels and incomes fall dramatically. expanding upon means unemployment levels blow up to fall slowly and incomes begin to rise. Government Influences government will put into place policies that expand or contract the level of economic activity. These policies directly or indirectly influence business activity and customers spending habits and such will influence the marketing plan.Developing Market Strategies* Pricing Strategies impairment Skimming charging the highest price possible for innovative productsPricing Penetration charges to lowest price possible for a product or service to achieve large market shareLoss-leader selling a product to a lower place its cost price to attract customersPrice ocean liner a extra number of key prices for selected product lines e.g one line of watches for $35 and a more expensive line at $55* Pricing Methods indeterminate margin the total cost of production then adds on amount for profit (mark-up)Market set prices according to the level of supply and demand, when demand is high prices are highCompetition establish a business chooses a price ground on competition, either below, equal to or above* Marketing segmentation and productMass marketing or a total marketing approach This includes rudimentary food items, water, gas, electricity etc.Concentrated Market Approach -By exploitation the concentrated market approach the business is able to analyse its customer base more closely and design strategies to satisfy this select groups needs, and develop particular products based on customer fe edback.Product Differentiation is the process of developing and promoting differences between the businesses products and those of its competitors. e.g jeans with designer labels and washing detergent with brightener additives* Place/Distribution Channels of Distribution or marketing channels are routes taken to get the product from the factory to the customer. The process usually involves a number of intermediaries such as wholesalers, brokers, agents or retailers. To choose the channel of distribution the situation is the main ratifier of the business market or market coverage (number of outlets a firm chooses for it product). There are three ways a business can cover a market Intensive distribution when a business saturates the market with their product e.g milk, lollies and newspapersSelective Distribution businesses use a take hold proportion of possible outlets where customers are prepared to run e.g clothing, furniture liquid ecstasy Distribution only one retail, out let in a large geographical area for exclusive and expensive products. corporeal Distribution enamourWarehousing involves receiving, storing and dispatching goods.Inventory controlled through a system that maintains quantities and varieties of products appropriate for the target market. Effects on Distribution1. Technology2. topical anaesthetic Government affirmative new development applications and alteration to existing set forth Fire regulations Determining land zoning and the project for which a make and land can be used Parking regulations Health regulations Size, anatomy and location of business signsEthical and legal AspectsEnvironmentally responsible products materialism an individuals desire to evermore acquire possessionsImpact of retail development -intensely competitive environment may result in some retailers using dubious marketing practicesSugging change Under Guise of a survey,Role of Consumer LawDeceptive and misleadingPrice- DiscriminationImplied Cond itions or termsMerchandise quality meaning that the product is of a standard a reasonable person would expect for the priceFitness of purpose meaning that the product is competent for the purpose for which is being sold. That is, it will perform as the instructions or advertisement impliesWarrantiesResale Price MaintenanceLegislations to respond to ethical and legal aspects of marketingThe conduct fare Act 1974 is one of the most important pieces of economy in Australia and has two purposes1. To protect consumers from misleading and deceptive conduct2. repressing trade practices to strangle competition as soundly as ensuring that a number of businesses are operation at any one time in the analogous market, to avoid the problem of monopolistic power.Fair Trade Act (FTA) is a mirrors legislation that covers sole traders and partnership as well as companiesImplied conditions in both Acts Merchantable quality worth the money Fit for purpose does its jobs.HSC Topic Four Employm ent RelationsCase StudyManaging the ER functionLine Management* ALDI Supermarkets* Individual store managers are evaluate to solve all instore problems there is no area manager or specialist ER departmentKey influences on ERSocial InfBusiness Management and Change at Billabong (BB)Business Management and Change at Billabong (BB)HSC Topic One Business Management and ChangeCase Study BillabongManagement TheoryBehavioural Management TheoryCreative thinking and innovation are of greater importance than ruthless efficiency. Managers see their roles primarily as motivating staff communicating the companys vision to customers stakeholders.Workers overcame problems and gave remark into the way Billabong was run.Primarily to do with business culture and lack of morale caused by inertia of managers their resistance to changeBILLABONGSources of Change* External influencesEconomic factors Negative level of unemployment and growth/interest rates means less people can afford BBs products Rising incomes in East Asia and South America have helped create new marketsSocial factors Changing consumer tastes Increasing tastes in sports such as skateboarding and surfing BMX now included at Olympics increases recognition of sport and clothingPolitical factors Protectionism and limiting of imports through tariffs has seen BBs product strengthened in the domestic market Gov emphasising and pushing Aus exports, BB has seen improved overseas sales.Geographic Pollution of beaches discourages people from surfing Influences what products BB have to release Snow gear in countries like Switzerland and surf gear in markets like HawaiiInternal influences E-Commerce Positive Simplifying logistical and organisational difficulties + Monitoring and tracking sales control Internet website greater relationship/interaction with customers New Procedures Private Public Comply with legal regulations meant financial record systems for annual financial report Tighter control over f inances so as to increase return for investors Business Culture Management team changed in 1998 when Matthew Perrin and Gary Pemberton bought 49% of BB Now comprised of more professional managers with greater business knowledge and procedures than the original surf enthusiasts who established the businessStructural responses to changeOutsourcingProduction to SE Asia and ChinaResponse to economic and financial influencesAllows company to focus more on design and marketingLowers costs to maintain competitive advantage in price-sensitive marketsStrategic AlliancesCooperated with Channel V Billabong Music Bus TourBoth had similar target marketsIncreased brand recognition and awarenessReasons for resistance to changeFinancial CostsDeveloping new products such as skateboards and sunglasses requires moneyAcquiring smaller businesses, eg. Honolua Surf Company cost around $20billionInertia of ownersInternational expansion brings some risk from the financial backers/owners and therefore sa w resistance from shareholdersManaging change effectivelyIdentifying need for changeBB gained an edge over competitors by being one of the first businesses to expand overseas in the early 1980sDiversifying into skateboarding and accessories increased market shareCreating culture of changeNew management team in 1998 acted as change agents achieved growth by constantly observing and pursuing new opportunitiesChange Models (force field analysis)Driving ForcesRestraining Forces revenueNew opportunities for staffYear round demand (seasons)Costs of productionLack of new designersNeed to hire new managers for new departmentsChange and Social ResponsibilityEcological SustainabilitySurfrider Foundation Conservation and regeneration of beaches and foreshores Quality of lifeEncourages team work and a relaxed atmosphere both in the office and in retail storesBB has a strict no child labour policy and regularly inspects overseas production facilitiesCultural DiversityEncourages communication be tween domestic and international stores/officesEmployees are encouraged to transfer between international offices to gain new experiencesThe Nature of Management Management Roles-An interpersonal role is one in which the manager deals with people. Proactive- incorporates dynamic action and forward planning to achieve particular objectives-An informational gathers information within the business and supplys it outside the business-A decision-making role involves solving problems and making choices Skills of Management-People Skills-Strategic thinking-Vision-Self-Managing-Teamwork Ethical behaviourResponsibilities to stakeholders includemanage changesocial justiceecological sustainabilitycompliance with the lawcodes of practiceUnderstanding Business Organisations with Reference to Management theories Contingency Theory Classical-Scientific Planning, Organising, ControllingDivision of labour, chain of command, autocratic leadership style meaning the manager tends to make all the decis ions in the business. Behavioural ability to understand and work with people from a variety of backgrounds and different expectations Leading, Motivation, Communication Flatter organisational structure democratic leadership style where managers consult employees to ask suggestions and take them into account when decision making. Political encourages the formation of coalitions to promote different points of view. Power and Influence within a business can have both a positive and negative effect. It can be sued to intimidate (negative) or empower others (positive). Legitimate power due to status or position of the person in the firm e.g management Expert power due to a result of a persons skills and expertise Referent power from a persons individual characteristics (personality and charisma) Reward Power to the rewards or compensation a manager distributes Coercive power controls individuals by the actions or words of the manager Negotiating and Bargaining, Stakeholder views, Co alitionsManaging Change Nature and Sources of Change in Business External Changing Nature of Markets, Economic Influences, financial, geographic, social, legal, political, technologicalInternal Effects of decelerating technological change, e-commerce, new systems and procedures, new business cultures Structural Response to Change-Outsourcing Flat Structure Strategic alliances Networks Reasons for Resistance to ChangeFinancial CostsInertia of managers and ownersCultural incompatibility in mergers and takeoversStaffing Considerations de-skilling, acquiring new sources, loss of career prospects and opportunities.* Managing Change EffectivelyIdentifying need for change- SWOT anaysis and balance sheetsSetting Achievable goals mission statements and company goalCulture of ChangeChange Models Force-Field Analysis Unfreeze/Change/RefreezeChange and Social ResponsibilitySocial Responsibility is the awareness of a businesss management of the social, environmental and human consequences o f its actions. Customers eventually find out which businesses are acting responsibly and which are not. Ecological Sustainability Quality of Working life Technology E-Commerce Globalisation and Managing Cultural DiversityHSC Topic Two Financial PlanningThe Role of Financial Planning* Strategic role of Financial Planningstrategic planOrganisational goals and objectivesManaging financial resources* Objectives of Financial management Liquidity -pay debts in the short term (less that 12 months) Profitability ability to maximise profit Efficiency -manage its assets to maximise profits with the lowest possible level of assets Growth increase its size in the long term Return on capital -profit returned to owners or stakeholders as a % of their contribution* The planning Cycle Addressing present financial position e.g revenue, p l statements, budgets Determining financial elements of the business plan Developing budgets Cash Flows Financial reports Maintaining record systems Planning fi nancial controlsFinancial Markets Relevant to business financial needs* Major Participants in Financial marketsBanksFinancial companies -provide loans to individuals and businesses e.g personal and securedInsurance companies -loans to the corporate sector through insurance premiumsMerchant bks (investment bks) -services such as borrowing and lending to the business sector.Superannuation/Mutual funds provide funds to the corporate sector through the investment of funds received from superannuation contributionsThe Reserve bank of Australia (Government) -acts as a banker and financial agent for the federal government* The Role of the Australian Stock Exchange (ASX) as a primary MarketThe ASX is the major financial exchange in the country. It comprises the largest primary and secondary markets for companies and individuals wishing to create and exchanges financial assets in the economy* Influences on Financial Marketsdomestic markets e.g change in inflation, demands for funding, chang es in government policies. Companies can be positively and negatively affected.Overseas influences such as world events, foreign exchange rates, tax regulation for foreign operations* Trends in Financial MarketsTechnology has allowed markets to become more competitive and grow allowing financial transactions all the time. Globalisation will also give overseas investors access to Australian companies and increase opportunities for Australian investors and international markets.Management of Funds* Sources of FundsInternal Owners Equity Retained ProfitsExternalShort-term borrowing Bank Overdraft allows a business to overdraw their account to an agreed limit Bank Bills Long Term Borrowing Mortgage Debentures -The company repays the amount of the debenture by buying back the debenture. Finance companies raise funds through debenture issues to the public. Leasing involves the payment of money for the use of equipment that is owned by another party. Factoring is the selling of accounts receivable for a discounted price to a finance of factoring company. Venture Capital is funds supplied by investors to either a new organisation or to an already established business ready to grow or diversify. Grants are provided by the government for businesses to develop and promote international competitiveness. Grants often enable an organisation to become competitive in the global environment e.g exporting organisations.* Comparison of debt to equity financingDebt finance refers to short and long term borrowing from external sources of an organisationEquity Financing refers to the internal sources of finance in the organisationGearing/Leverage is the proportion of debt to equity which is used to finance the activities of a businessUsing Financial Information* The Accounting FrameworkFinancial StatementsRevenue Statements shows the revenue earned and expenses incurred over the accounting period with the resultant profit or loss. Revenue statements show operating revenue earn ed from the main functions of the business e.g sales of inventories and the non-operating revenue earned from operations such as rent and commission. It also shows operating expenses such as rent, advertising, insurance.Balance Sheets represent the assets and liabilities at a particular point in time expressed in money terms and calculates the net worth of the business. The balance sheet shows the level of current and non-current assets and liabilities including investments and owners equity. Balance sheets indicate whether it has enough assets to cover debt interest and money borrowed that can be paid assets used to maximise profits if owners are making a good return on their investment* The accounting Equation and Relationships(A) Assets = (L) Liabilities + (OE) Owners EquityThe accounting equation forms the basis of the accounting process which shows the relationship between assets, liabilities and owners equity. The accounting equation shows that the assets of the business may b e financed by either the owners or by parties external to the business.COGS = inventory + purchases closing stock* Comparative Ratio AnalysisBy comparing ratios of a firm over time reveals trends and indicate directions for the future. Comparisons with other businesses and industry ratios is often used although can be inaccurate due to differences in companies and industries. Businesses often compare ratios against common standards such as statistics from the ABS.* Limitations for Financial ReportsHistoric cost accounting states that values are stated at the cost incurred at the time of purchase or acquisition, meaning financial statements will be a mixture of different year figures. Historic cost has been used for a long time although may become inaccurate in times of inflation.Value of Intangibles licences, trademarks, brand names and goodwill.Effective Working Capital (Liquidity) Management* The Working Capital RatioWorking Capital Ratio = Current Assets over Current Liabilities (21 ACCEPTABLE ALTHOUGH VARIES)The Working capital ratio shows if current assets can cover current liabilities.* Control of Current AssetsCash Balances are generally kept at a minimum and hold marketable securities as reserves of liquidity.Receivables is important in terms of management of working capital. The quicker the debtors pay, the better the firms cash position.Inventories make up a significant account of current assets and their levels must be carefully monitored so that excess or insufficient levels of stock do not occur.* Control of Current LiabilitiesPayables must be paid by their due dates due to avoid any extra cash charges imposed for late payment and to ensure that trade credit will be extended to the business in the future.Loans management of loans is important for establishment interest rates and ongoing charges must be investigated and monitored to minimise costs.Overdrafts policies should be used to manage bank overdrafts and monitor budgets on a daily or wee kly basis so that cash supplies can be controlled.* Strategies for Managing Working CapitalLeasingFactoringSale and Lease back is the selling of an owned asset to a lesser and leasing the asset back through fixed payments for a specified number of years.Effective Financial Planning* Effective Cash Flow ManagementThe activities of a business are divided into three categories as a statement of cash flows 1. Operating Activities e.g inflow cash and credit, outflow payments to employees2. Investing Activities -e.g selling of old motorbike, purchasing new property3. Financing activities- e.g inflow selling of shares, outflow repayment of debt.* Management Strategiesdistributing payments through out a month or year or different period so that cash shortfalls do not occur payments and bad debt of accounts by debtors can cause shortfalls of cash for businesses at important times.discounts for early payments* Effective profitability ManagementCost ControlFixed Costs e.g insurance and s alariesVariable costs change with the level of activity within a business e.g materials and labour used in the production of a product e.g fixing a roof.Cost Centres are particular areas, departments or sections of a business to which costs can be directly attributed. Direct costs are those allocated from a particular product, activity, department or region e.g depreciation of equipment used solely in the production of one good. Indirect costs come from shared projects, activities, departments or regions.Staff should be motivated to minimise expenses where possible as savings can be substantial if people take a close look at costs and eliminate waste and unnecessary spending.* Revenue ControlsSales objectives must be at a level of sales that will cover costs (fixed and variable) and result in profit. Changes to the sales mix can affect revenue. Research should be made to identify the effects of sales mix changes before implantation.Pricing Policy affects revenue and therefore impact s on working capital. To attract buyers while underpricing may bring high sales but still result in cash shortfalls.Ethical and Legal Aspects of Financial Management* Audited AccountsAn audit is an independent check of the accuracy of financial records and accounting procedures. Types of Audits-1. Internal conducted internally by employees2. Management used to review the firms strategic plans and determine if changes need to be made.3. External required by corporate law to ensure it complies with Australian auditing standards.* Australian Securities and Investments Commission (ASIC)ASIC enforces and administers laws and protects consumers in the areas of investment, life, insurance, super and Australian banking. ASIC sets out to reduce fraud and unfair practices in financial markets and products. ASIC ensures that companies adhere to the law. Collects information about companies and makes it accessible to the public.* Corporate Raiders and Asset StrippingAsset Stripping describes the practice of organisations that identify and sell off for a profit, assets of a company, especially one that has been acquired in a recent takeover. Entities that take over other companies and sell off the assets are known as corporate raiders.HSC Topic 3 MarketingCase StudyTypes of MarketsResource BHP BillitonIndustrial PainterIntermediate Gloria Jeans selling cakesMass IBM ComputersNiche Mountain Bike MagazineDeveloping Marketing StrategiesProduct and ServicePositioning* Qantas was under competitive pressure from Virgin Blue in the leisure market* Qantas wanted to maintain its higher positioned government and business segments* Expanded to a subsidiary Jetstar who were positioned as a value-for-money productPrice including pricing methodsPrice Points* Jetstar International* Base price for seat, Charge $30 for meal, $7 for blanket and amenity kit and $12 for entertainment kitPromotionAdvertising* Dell Computers focus much of their advertising to print media* Use inserts /pamphlets/brochures in magazines, typically in the technology liftout section of the newspaper, where their target market is most likely to be readingPlaceDistribution* Dell distribute products directly, with no intermediaries* Exclusive distribution (no stores), Intensive (internet)* Distribution system is e-commerceEthical and Legal AspectsRole of Consumer Laws in dealing withDeceptive and Misleading Advertising* Gillette (Duracell) VS Eveready* TV advertisement claims Duracell lasts up to four times longer than ordinary batteries* Eveready claimed the ad infringed the TPA* Independent tests showed the Duracell batteries never last 4x longer* Federal Court ruled Duracell breached the TPA in the areas of misleading and deceptive conduct and false representations about the quality and benefits of goodsThe Nature and Role of Markets and MarketingMarketing is a total system of interacting activities designed to plan, price, promote and distribute products to present and potential cus tomers.* Types of Markets Resource markets e.g mining, agriculture, forestry and machinery. Industrial Markets purchase products to use in the production of other products e.g buying flour to make bread Intermediate markets (resellers) consist of wholesalers and retailers who purchase finished products and resell them to make profit Consumer Markets e.g cars, clothing, food Mass Market is when the seller mass produces, mass distributes and mass promotes one product to all buyers Niche Markets are micro markets made for buyers who have specific needs or lifestyles* Production Production Orientation 1820s 1920sWhen a business concentrates on making as many possible goods at the lowest price possible Sales Approach 1020s 1060sWhen a business concentrates on selling techniques to attract customers Marketing Approach 1060s 1980sWhen a business collects information on consumer trends to sell its products* The Marketing Concept Consumer Orientation when a business concentrates on maxi mising customer satisfaction to sell its products Relationship Marketing the focus on encouraging repeat purchases and loyalty to the business by managing customer relations at the time of and after the initial purchase.Elements of a Marketing Plan* Establishing Market Objectives* Identifying Target Market Total Market Approach one type of product with little or no variation aimed at everyone through one distribution system. Market Segmentation approach the market is subdivided into groups of people who share certain characteristics.* Developing Marketing Strategies (examining elements of the 4 Ps)* Implementation, Monitoring and Controlling Financial Forecasting measures the sales potential and revenue forecasts (benefits) for strategies and compares these with anticipated costs. Comparing actual and planned results1. Sales analysis comparing of actual sales with forecast sales to determine the effectiveness of the marketing strategy2. Market share analysis/Ratios by comparing competitions market share to their own this can reveal changes in total sales (increase or decrease)3. Marketing Cost Analysis marketer breaks down the total marketing cost into specific marketing activities to access the effectiveness of each activity.Market Research ProcessMarket research is the process of systematically collecting, recording and analysing information concerning a specific marketing problem.The three steps of the market research process are1. Determining information needs2. Collecting data from primary and secondary sources3. Data analysis and interpretation -the data that represents average, typical or deviations from typical patterns. The data must be then displayed in way which statistics and figures can be conducted e.g spreadsheetsCustomer and Buyer BehaviourCustomers are classified into two categories Consumer the process of purchasing goods and services for personal household use. Organisational the purchase of goods and services by producers, resellers and government.Types of Customers Household Personal personal and household spending plays a dominant role within the economy as it contributes to the level of economic activity which affects business profits, unemployment levels, interest rates levels and rate of inflation. The Firms market consists of businesses that purchase goods and services for further processing or for use in their production process. Educational institutes Government Customers Governments spend billions of dollars each year for a wide variety of goods and services ranging from battleships to paperclips. All purchases of the government spend public funds to buy products, the government is accountable to the public, requiring a much more formalised set of buying procedures where firms submit quotes to supply a particular good or service and the lowest bid is generally accepted.* The Buying ProcessThe buying process involves 5 common stepsRecognise the problem need or want requiring satisfactionSearch for i nfo brands, product characteristics, warranty, price etcEvaluate alternatives cost and benefit analysisPurchaseEvaluate after purchase stability of product, satisfaction gained or dissatisfaction may occur.* Factors influencing Customer Choice Psychological influences e.g perception, motive, attitude and personality Socio-cultural influences e.g family, friends, social class, culture and subculture. Economic Influences -A boom is a period of low employment and rising income. Contraction is a period of slowly rising unemployment with incomes stabilising. Recession sees unemployment reach high levels and incomes fall dramatically. Expansion means unemployment levels start to fall slowly and incomes begin to rise. Government Influences government will put into place policies that expand or contract the level of economic activity. These policies directly or indirectly influence business activity and customers spending habits and such will influence the marketing plan.Developing Ma rket Strategies* Pricing StrategiesPrice Skimming charging the highest price possible for innovative productsPricing Penetration charges to lowest price possible for a product or service to achieve large market shareLoss-leader selling a product below its cost price to attract customersPrice Lining a limited number of key prices for selected product lines e.g one line of watches for $35 and a more expensive line at $55* Pricing MethodsCost-plus margin the total cost of production then adds on amount for profit (mark-up)Market set prices according to the level of supply and demand, when demand is high prices are highCompetition based a business chooses a price based on competition, either below, equal to or above* Marketing segmentation and productMass marketing or a total marketing approach This includes basic food items, water, gas, electricity etc.Concentrated Market Approach -By using the concentrated market approach the business is able to analyse its customer base more closely and design strategies to satisfy this select groups needs, and develop particular products based on customer feedback.Product Differentiation is the process of developing and promoting differences between the businesses products and those of its competitors. e.g jeans with designer labels and washing detergent with brightener additives* Place/Distribution Channels of Distribution or marketing channels are routes taken to get the product from the factory to the customer. The process usually involves a number of intermediaries such as wholesalers, brokers, agents or retailers. To choose the channel of distribution the location is the main contributor of the business market or market coverage (number of outlets a firm chooses for it product). There are three ways a business can cover a market Intensive distribution when a business saturates the market with their product e.g milk, lollies and newspapersSelective Distribution businesses use a moderate proportion of possible ou tlets where customers are prepared to travel e.g clothing, furnitureExclusive Distribution only one retail, outlet in a large geographical area for exclusive and expensive products. Physical DistributionTransportWarehousing involves receiving, storing and dispatching goods.Inventory controlled through a system that maintains quantities and varieties of products appropriate for the target market. Effects on Distribution1. Technology2. Local Government Approving new development applications and alteration to existing premises Fire regulations Determining land zoning and the purpose for which a building and land can be used Parking regulations Health regulations Size, shape and location of business signsEthical and legal AspectsEnvironmentally responsible productsMaterialism an individuals desire to constantly acquire possessionsImpact of retail development -intensely competitive environment may result in some retailers using questionable marketing practicesSugging Selling Under G uise of a survey,Role of Consumer LawDeceptive and misleadingPrice- DiscriminationImplied Conditions or termsMerchandise quality meaning that the product is of a standard a reasonable person would expect for the priceFitness of purpose meaning that the product is suitable for the purpose for which is being sold. That is, it will perform as the instructions or advertisement impliesWarrantiesResale Price MaintenanceLegislations to respond to ethical and legal aspects of marketingThe Trade Practice Act 1974 is one of the most important pieces of legislation in Australia and has two purposes1. To protect consumers from misleading and deceptive conduct2. Restrictive trade practices to restrict competition as well as ensuring that a number of businesses are operation at any one time in the same market, to avoid the problem of monopolistic power.Fair Trade Act (FTA) is a mirrors legislation that covers sole traders and partnership as well as companiesImplied conditions in both Acts Merchan table quality worth the money Fit for purpose does its jobs.HSC Topic Four Employment RelationsCase StudyManaging the ER functionLine Management* ALDI Supermarkets* Individual store managers are expected to solve all instore problems there is no area manager or specialist ER departmentKey influences on ERSocial Inf