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Topic 5 pg 117

Topic 5 pg 117. THE ROLE OF BUSINESS MANAGEMENT IN IN THE ECONOMIC AND MANAGEMENT ENVIRONMENT A business is a private need satisfying institution that takes risk, in pursuit of profit , to offer products and services to the consumer in the market. Free market system or market economy.

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Topic 5 pg 117

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  1. Topic 5 pg 117 • THE ROLE OF BUSINESS MANAGEMENT IN IN THE ECONOMIC AND MANAGEMENT ENVIRONMENT • A business is a private need satisfying institution that takes risk, in pursuit of profit , to offer products and services to the consumer in the market.

  2. Free market system or market economy • Free to: • Start business • Close business • Buy or sell shares in business • Produce goods and services [ within limits]

  3. COMPOSITION OF S.A.BUSINESS pg 120 • 75 Holding companies • 642 listed companies • 195 000 unlisted registered companies • 374 00 close corporations [cc] • 473 000 sole proprietors and partnerships • 3 800 000 enterprises in informal sector • NTSIKA AGENCY [1997]

  4. GDP CONTRIBUTION pg 121 • Govt 16% • Public corporations 13% • Large private enterprises 25% • Small and medium enterp 29% • Informal/micro 17%

  5. The Needs Of the Community pg 122 • PHYSCHOLOGICAL NEEDS • SELF ACTUALIZINGCommunity/high qualification • EGO Large home/ expensive car • ___________________________________________ • PHYSICAL NEEDS • Social needsFriends • Security Needs House • Physiological [Bodily] Needs Food/clothes • water/air

  6. Pg. 122

  7. How businesses satisfy needs pg 125 • 1. Entrepreneur- combines capital; labour and natural resources to produce goods and services. He/she creates economic utility. • 2. Risks time effort and money to make a profit. • 3. profit = income - cost

  8. Organization • 1. one man business is one man business. 2. If more than one person involved then it is an organization or enterprise. • 3.Entrepreneurs start organizations. • 4.Organizations satisfy needs by providing goods and services

  9. THE NATURE OF BUSINESS MANAGEMENT • “ Business management is a study of how a business operates.” • Business management leads to wealth creation.

  10. 2.2 Pg 130 Economics and Business Economics as related sciences. • Economics is concerned with factors of production and choices and need satisfaction of the whole country. • Business economics deals with the facors of production and need satisfaction via na enterprise [ organization].

  11. 2.3 Pg 131 Reasons for the existence and task of business management. • The economic principle = people effort to achieve possible need satisfaction with limited resources. “ min input and maximum output ” Reason for business management – to help enterprises to satisfy the economic principle by means of research and management education and training. Maximize profit.

  12. 2.4 Pg 133 MULTIDISCIPLINARY NATURE OF BUSINESS MANAGEMENT • Multidisciplinary means bus manag uses many subjects • Strategy from war • Organizational behaviour – sociology • Productivity from industrial engineering. • Mathematics; Statistics; communication; accounting; law

  13. Study unit 3- pg 136SUBDIVISIONS OF MANAGEMENT-7 functions or 7 functional management areas: • 1. Financial Management • 2. Human Resources • 3. Purchasing • 4. Production or operation • 5. Marketing • 6. Public relations • 7. General management

  14. MARKETING MANAGEMENT • 1. Assessing the market • 2. Determining consumer needs[needs determination] • 3. Develop a marketing strategy

  15. ASSESSING THE MARKET • 1. Do research • 2. Determine customer’s needs.[ qualitative and quantitative] • 3. Purchasing power. • 4. Purchasing behaviour.

  16. Nature of the market • Based on demographics • Number • Age • Male/female • Growth pattern.

  17. Spending power and patterns • Amount of money available for purchasing goods and services. • Pattern – how is the spending power distributed e.g. Gauteng has +-30% market potential.

  18. Market behaviour • Needs • Attitudes • Preferences • Personality. • Motive • Disposition

  19. MARKETING STRATEGY • 1. Product • – size; durability; packaging; trade mark; obsolescence; differentiation; 2. Price have to make a profit; must consider competition; consider matrix 3. Place –Distribution channel wholesaler-retailer or direct 4.People-Marketing communication How will your customers know about your product- radio; tv; magazines; newspapers; internet

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