BA101, Midterm #1 Study Guide
BA101, Midterm #1 Study Guide BA 101
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This 1 page Study Guide was uploaded by Emma Cochrane on Sunday January 31, 2016. The Study Guide belongs to BA 101 at University of Oregon taught by Engel S in Fall 2015. Since its upload, it has received 626 views. For similar materials see Intro To Business in Business at University of Oregon.
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If Emma isn't already a tutor, they should be. Haven't had any of this stuff explained to me as clearly as this was. I appreciate the help!
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Date Created: 01/31/16
Important deﬁnitions: Finance: where the company got the money to buy the assets to start the business; there is equity ﬁnancing and there is borrowing ﬁnancing. Accounting: looking forwards and backwards; evaluates the company and issues income statements (quarterly) on how the company operated looking backwards and predicts what will happen in the future Management (HR): decides who to hire and how many people to hire, decides what to pay them and what beneﬁts they get, decides how much of production should be manual labor and how much should be machine labor. Chooses to hire the best people they can as competition to other businesses. Research and Development: chooses what products to come out with based on what people want to buy, designs product for consumers. Operations: what’s going on inside the factory: Is it running eﬃciently? Are materials being used eﬃciently? Is everything cost eﬀective? How much factory capacity needs to be added with company growth? Marketing: an organizational function and a set of process for creating, communicating, and delivering value to customers and for managing customer relationships in ways that beneﬁt the organization and it stakeholders. Includes: Product (what it is), Price (how much it costs), Place (where it can be bought), Promotion (advertising), and Service (customer service). Demographics: age, gender, income, education, etc. Psychographics: lifestyle, beliefs, etc. Segments are diﬀerent groups of customers that companies can describe. Purchasing Criteria: What you want in a product Expectations: What you expect from your purchase criteria Importance: Prioritized purchasing criteria (this has to add up to 100%) Attractiveness: What buyer rates product on based on purchasing criteria and expectations Customer Survey Score: Used to compare products between competitors. Mean Time Before Failure (MTBF): Average time before a product lasts before breaking/failing. (how reliability is measured) Price: The lower the price, the more attractive, but if you sell it too low priced, you won’t make a proﬁt. Age: How old is the product? When was the last time there was an upgrade or an update. Position: Position within the market. (Uses monthly customer survey score) Proﬁt Maximization: setting prices so that total revenue is as large as possible relative to total cost. Diminishing Returns: the more you invest, the less you get back. Promotion: your message Awareness: Percent of the market that received the message. Owner’s Equity: what the owner’s own (accumulated proﬁts of the company) Common Stock: original investment by owners Retained Earnings: proﬁts accumulated Liabilities: loans/borrowing Assets: cash, inventory, equipment, accumulated depreciation (land, buildings, etc) Capacity: how many units the factory can produce Important Equations: Sales – Expenses = Proﬁt (proﬁt ≠ revenue) or total revenues – total cost = proﬁt Sales (revenues) = price x quantity sold (demand) Contribution margin – ﬁxed expenses = net proﬁt Customer Survey Score: importance % x attractiveness points, then adding all numbers together. Industry unit sales last year x industry growth rate % = next year industry demand forecast Next year industry demand forecast x my company’s market share percentage = my company’s demand forecast Assets = Liabilities + Owner’s Equity Forecast + (forecast/12) = number of units available for sale CM% = CM/Sales Add capacity: $6/unit ﬂoor space Add automation: $4/unit leve if you increase the automation levels, labor declines by $1.12 per unit. Types of Customers Low Tech Customers People who buy the cheaper, more easily manufactured option High Tech Customers People who buy the more expensive, more complicated/more diﬃcultly manufactured option Who are our customers? Low tech High tech What do they want? Price Age Reliability Positioning Segments Segments are diﬀerent groups of customers that companies can describe (geographic, psychographic, demographic) Within a segment, customers share similar characteristics Ex: Same age, same gender, same income, same lifestyle, etc. Companies don’t always market to all segments. They choose which ones they want to market to. Segments chosen to market to become the target market. Segments are described using demographics and psychographics Segment Criteria Ranking Low Tech Market: 1. Price 2. Age 3. Reliability 4. Positioning High Tech Market: 1. Positioning 2. Age 3. Prices 4. Reliability Marketing Research Primary Data Research: research is done by the company/research department (used when answer isn’t readily available) Ex: surveys, observational research, contracting a third party to do research speciﬁcally for you Secondary Data Research: Someone has already done the research and made it publicly available for a free or for a fee. (most used way of collecting research) Ex: online research, book research (anything that’s already been done and is available) Perceived Age You introduce a product on July 1, 2010. On July 1, 2010 it is 0 years old. On December 31, 2010 it’s .5 years old. You reposition and the revision date is July 1, 2010 On June 30, 2010, it’s almost 2 years old. On July 1, 2010, it’s perceived age is cut in half (1 year old) Seller’s Market Limited supply is available due to stock out Customers search for any available products and reduce their expectation (rough cut) Sellers have the opportunity to sell 'less appealing' products Can add $9.99 to price Buyer’s Market Supply and demand are in equilibrium There is plenty of product available Can’t raise prices Watch pricing, watch range Capacity Your total capacity represents what you are capable of producing in your ﬁrst shift. You have a second overtime shift and it is an expensive way to build products, but you can produce a total of twice the amount of the ﬁrst shift. Forecast + 1 month demand (inventory target)
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