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Business is an integral part of our daily lives. The term is used to describe organizations that operate in a market to sell goods and services for a profit. Businesses can take a variety of different forms and operate in a wide range of different industries. Some organizations’ main goals are maximizing profits, while others pursue social and environmental objectives. It is important to keep in mind that business studies go beyond explaining the different types of business and understanding finances – you will cover a wide range of topics such as innovation, leadership, global marketing, and organizational culture. By studying business, you will not only understand how to sell goods and services but gain deeper insight into markets, stakeholders, strategy, and decision-making.
Are you studying for your upcoming business exam or starting to write your business coursework? StudySmarter can help you with business studies revision and preparation. On StudySmarter, we cover all business topics and provide you with detailed revision notes and guides. You also have free access to a business quiz and hundreds of business studies topic flashcards.
Introduction to Business Studies.
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Throughout your business course, you will learn about the business’ various elements and functions, including operations, finance, marketing, human resources, management, and strategy. You will familiarize yourself with the key aspects of business decision-making in different contexts and environments. You will also broaden your understanding of how decisions impact different business stakeholders. Finally, you will be able to evaluate managerial and strategic decisions through qualitative and quantitative analysis. On StudySmarter, you will find detailed summaries and revision notes on the following key business topics and subtopics:
As a first step, we have to understand what businesses are and why they exist. Businesses exist to make a profit, survive, grow and even reach social aims. One key feature of businesses is that they all have a mission and should have objectives that guide them to attaining their mission.
Another important step is understanding the different forms of business. This is an important concept to consider when making business decisions and evaluating performance.
The external environment also plays an important role in decision-making and includes various factors like competition, demographics, the environment, or interest rates, which can hugely influence operating costs and the demand for a business’s products and services.
To test your knowledge, take a look at our business studies flashcards under the ‘Nature of Business’ subtopic!
Management is another key component of business studies. Managers play a key role in all forms of business. Their role is about making decisions, analyzing, planning and reviewing, and finding an effective leadership style through which they can motivate and support employees. They also need to understand stakeholder needs and how to manage relationships between various stakeholders. Managers should make decisions based on data and intuition, keeping in mind the mission and objectives of the organization.
To find out more about management and leadership, take a look at our detailed explanations under the ‘managers’ section.
Marketing is an integral part of every business. By setting effective marketing objectives, a company can boost its sales, gain market share and increase brand loyalty. To achieve these results, the business needs to understand the market and consumers, which can be done through primary and secondary research. Marketing also involves segmenting consumers, targeting a defined segment, and effectively positioning the product or service through a niche or mass-market strategy. An additional tool for marketing decision-making is the marketing mix, which is made up of the 7Ps:
To learn more about the essentials of marketing and decision-making to improve marketing performance, take a look at the ‘marketing’ business studies revision guide.
Setting operational objectives is another fundamental part of the business. Operational objectives can include:
Once operational objectives have been set, the business needs to analyze its operational performance. Operational performance can be measured through operational data – by calculating metrics like labor productivity or unit cost. Through these calculations, we can understand the business’s operational strengths and weaknesses and make further decisions on how to optimize efficiency and productivity. Another core concept in operations management is understanding supply chains and managing inventory. These are essential for maximizing operational efficiency.
The financial performance of a business is based on a couple of key factors. The business has to plan, analyze and set financial objectives. Financial objectives can include things like:
These can be measured through performance metrics like return on investment (ROI), profitability ratio analysis, break-even analysis or cash inflows and outflows. The financial performance also includes budgeting, forecasting and sourcing finance. There are many ways businesses can source finance in both the long and the short term. It all comes down to understanding how we can make effective financial decisions that boost the business’s financial performance.
Financial performance in Business Studies
Human resource decisions can also expand the competitiveness of a business. Human resource objectives could include training, diversity, and employee engagement. Both internal and external factors can influence how a business sets human resource objectives.
For a deep dive into human resources-related decision-making, check out our explanations under Human Resources.
To understand the strategic position of a business, we need to analyze its mission, objectives, and strategy. We need to look at a business’s internal position and performance to understand where strengths and weaknesses come from. In order to understand opportunities and threats, the business needs to examine its external environment through a PESTLE analysis and the competitive environment through Porter’s five forces.
To learn more about how the external and internal environment plays a role in business strategy, take a look at our explanations under analyzing the strategic analysis section.
Every business needs to have a strategic direction – they need to decide which market to operate in, what products to offer, and how to enter the selected market. Businesses also need to determine their strategic positioning and sustain their competitive advantage.
To find out more about competition and strategy, look at our in-depth explanations under strategic direction.
Once a business has established its strategy, it is time to figure out how to pursue the strategy in a profitable way. It is important to evaluate whether the business is growing and find strategies to overcome problems in case the business is stagnant or growing too quickly. Innovation and internationalization can play a huge role in the growth of a business. Recently, digital technology has also become valuable for strategy and almost inevitable for businesses to adopt.
Change can often be a daunting process for businesses. The causes for change can be internal or external, but it can be very valuable for strategy either way. The problem is that change often comes with resistance. Managers have to successfully overcome barriers to change by leading organizational culture and implementing strategy effectively.
Take a look at our revision notes on change management for more detail!
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