Managing Your Business

A Practical Guide

Irenee Dondjio, Robert Haafst

• Publisher: Routledge
• Year: 2019
• eBook ISBN: 9781000036053
• Topic: Business
• Subtopic: Business General
• Index: Business

A comprehensive and hands-on textbook, Managing Your Business provides a wide range of models and theories to support the decision making process in strategic management.

With comprehensive coverage of all business units and company departments, the book starts at the basics and foundations of marketing. It subsequently delves into internal and external business strategies, explores and discusses the financial essentials, and ends with a thorough analysis on the matter of export.

Written in a fluent and accessible style, this textbook is essential reading for undergraduate students across economics, management and marketing. The practical focus ensures that the book is also useful reading for managers of small and medium-sized enterprises.

Part 1
The Internal Business Environment

The first part of this book looks at the concept of the company and how a company deals with its environment. Every company has a product it wishes to sell. In many cases, however, it will not be the only company selling this product; what every company needs are a competitive advantage and a certain uniqueness that appeals to its customers. Based on an analysis of the markets it operates in and an analysis of its own strengths and weaknesses, a company can determine a strategy for approaching the market. This strategy is used to derive a business model. Company strategy establishes which markets should be approached. A business model establishes what resources and unique proposals are needed to successfully sell products. The final step is the marketing plan, which establishes how the markets should be approached.

This chapter focusses its discussion on how companies determine strategies, business models and marketing plans, as well as on how a company manages one of its most important resources, namely human resources(HR), and how HR links to company strategy. The role of HR in adding to successful implementation of a strategy and marketing plan is also discussed. Once a company has managed to cover the basics, it is time for the next step: accounting and finance. Accounting is needed because a company has to record its transactions; not just for tax purposes, but also because management wants an overview of how cash is spent and how much is earnt. In addition, a company needs to know how it can finance its activities. In a nutshell, this part of the book explores the relationship between a firm’s competitive advantage and its internal capabilities (or core competencies), as well as how a firm develops unique and superior resources and capabilities that are difficult for other firms to replicate.

Chapters included in part 1:

1. 1 Business Model and Goal
2. 2 The Strategic Marketing Mix
3. 3 Financial Accounting
4. 4 Strategic HRM & IT

1
Business Model and Goal

Learning objectives

After studying this chapter, you should be able to define, understand, and assess:

• Mission
• Vision
• Mission and vision values in the planning process

Moreover, you should be able to understand:

• The differences between core and distinctive competencies
• The VRIO model
• The importance and use of Business model Canvas
• The company culture and structure

1. Mission statement
2. Vision statement
3. Core competencies
4. VRIO framework
5. Business model
6. Organisational structure
7. Structural dimensions
8. Leadership
9. Situational leadership model
10. OCAI

1.1 Introduction

The success of companies relies mostly on the adequate utilisation and management of both internal and external resources and capacities. This chapter focusses on the internal factors, while the next chapters focus on the external ones. Internal analysis provides the tools needed to identify the strengths on which to build, and, equally importantly, the tools to recognise existing weaknesses. Both must be taken into consideration when formulating strategies. The internal analysis reflects a company’s resources: its activities, objectives, policies, and plans.

Competitive advantage

Core competencies

Managers can use an internal analysis to find a company’s competitive advantage. Basically, the competitive advantage is what one company has or does that is better than its competitors. Examples include offering lower prices for products, or understanding customers better than the competitors. Competitive advantages rely heavily on a company’s core competencies.

Internal analysis Internal strategic management audit

Internal analysis or an internal strategic management audit should start by identifying a firm’s mission and vision. An audit begins by creating an understanding of strategy and performance. Auditing a firm helps assess the factors that affect the organisation’s welfare. All organisations, regardless of size, nature, or scope of activities, need marketing, production/operations, finance/accounting, research and development, It, and human resources to perform efficiently. Therefore, planning, executing, and managing these various functions is paramount an organisation’s success. An internal strategic management audit begins by mapping and understanding a company’s mission and vison.

Mission Statement

Mission statement

A mission statement describes an organisation’s long term goals, or what it aims to achieve in business and often also in society. Mission statements therefore frequently contain elements such as ‘market leader’, ‘product leader’, ‘most sustainable’, ‘most user-friendly’, etc.

A major ferry cruise-line company, for example, could have the following mission statement: ‘We are the most reliable ferry-cruise company in the industry with the lowest number of customer complaints and the highest number of on-time arrivals.’

A mission statement can help stakeholders decide whether or not they want to do business with an organisation. A mission statement should be no longer than three sentences. Most often, companies struggle in drafting their mission statement. They often confuse the concepts of ‘vision’ (why they exist), ‘mission’ (what they want to achieve), and ‘strategies’ (how they want to achieve both).

In the case of Nespresso, the mission would have been to successfully turn the vision into a profitable business line. For Nestlé’s major stakeholders, this goal will have been made a ...

Table of contents

• Cover
• Title
• Copyright
• Preface
• Contents
• PART 1 The Internal Business Environment
• PART 2 The External Business Environment
• PART 3 Business Across Borders
• About the authors
• Appendix
• References
• Register
• Illustration acknowledgements