Welcome to week five. I hope you enjoyed week four and your reflection activities. This week go ahead and select lessons week 5 and the getting started folder. Let’s take a look at your objectives this week. This week you will explain the function that the marketing process plays in designing promoting distributing and pricing products. You’ll also discuss how proper financing planning and management allow businesses to accomplish short and long-term goals. You have some reading activities this week. You have two lectures this week the role of marketing for organizations and financial planning and management as well as a discussion question and an assignment. Again you might start at the beginning of the week and ask what's required of me to be successful this week and you'll need to read all of the material. If you have any questions regarding the assignments or the reading material - try to get with your professor early in the week. You’ll have to participate early and often in the discussion forums and you'll need to complete your assignment focusing on completeness, timeliness, and professionalism.
Let’s start with your first lecture the role of marketing for organizations. I think it makes sense for our starting point to understand what marketing is so we should start with the basics and move on from there. So let's begin by defining what marketing is. I know there are several definitions and I do not feel that there is one best way to define marketing; however it's important for you to understand that whatever definition we choose needs to have a focus on the key to marketing success which is the customer. For purposes of this lecture we will define marketing as the strategies and tactics that businesses use to get the word out about their products and/or services as well as to create value for the customer. In other words having the right product at the right place at the right time. Businesses often use something known as the marketing mix to help them. The marketing mix is also referred to as the four ps. meaning: product design, price, Place, and promotion. For business to meet its consumer's needs it needs to develop products that will please them charge an appropriate price distribute the products to the right place and promote its products. I think it'll be more helpful to everyone if we briefly discuss each aspect in a little more detail.
Product: a product should satisfy customer’s wants and/or needs it should do what they claim it will do and needs to look good and clearly display the benefits on the package.
The price needs to be appropriate to the product or service to attract the segment of the market they want. The price should reflect the products advertised image and it should be within range of an already established price point of competitors if any.
The place needs to have a reliable way to transport and store products to ensure they are available for the consumer. It needs the right product at needs to be the right place at the right time and place increases the odds for the product to be purchased by the consumer.
Promotion needs to communicate with consumers to create value and provide information that will help them make an informed decision to purchase a product or not.
Let’s talk about lecture two: financial planning and management. During this lecture we will discuss how proper financial planning and management allows businesses to accomplish short and long-term goals. As we begin this lecture is important for you to understand that financial planning and management are essential activities for an organization of any size to operate effectively. I think it would be helpful to begin by defining what financial planning and financial management is.
Financial planning is simply planning for the future of the business. To ensure there will be positive cash flow in the years to come. Financial management is a business monitoring its cash flow to ensure the continuation of the business's operations is as effective and efficient as possible. Without appropriate financial planning and management even the most successful business can lose its way. Let me give you an analogy: let's say you and your family are planning their road trip vacation to the place you have never visited before. Before you leave you quickly check to make sure you have everything you need to get you and your family to your destination. As you begin the journey you are familiar with your surroundings and are comfortable so things are going great, however, halfway dare you realize you do not plan properly for the trip by making sure you had everything you needed as for you did not bring a map and you and your wife both left your wallet at home. At this point you are just driving aimlessly having no idea which direction you should go in to reach your goal with no money to help you get there. The same is true for business that do not properly financially plan and manage their money for the future as for they are just traveling aimlessly without a destination because they did not plan to bring a map or wallets. Does that make sense? A business’s priority when creating a financial plan should be accurate cash management. When a business correctly forecast the cash they have available they will be better able to identify times when that extra cash could be available to be invested to receive a higher rate of return on their investment. Accurate cash management will also help the business see if there could be the potential for a cash shortage during any particular time of the year. By seeing this ahead of time, management will have time to secure additional financing if necessary to get them through the rough patch. the bottom line is this - financial planning gives managers a better way to make better decisions for the business and to do their job better by seeing the long-term cash requirement. Another important element of financial management is correctly budgeting and forecasting for the future. In order for business to properly plan for the future it has got to have a budget so that they know how much money they have to work with.
Week five has several reading activities; however, I would like to turn your attention to the fundamentals of financial management. Which was written on January 27, 2009, but is still very, very relevant for today's business student. Two fundamentals of financial management are represented by management accounting and corporate finance. Managerial accounting includes techniques for financial analysis, costing the activities of the business, and forecasting financial requirements. Corporate finance includes functions such as valuation of assets and projects, deciding on the best and to investment portfolio, reducing risk through hedging operations, and choosing and monitoring the capital structure. so for financial management and practice financial managers are responsible for ensuring the availability of funds for planned investments and working capital, good returns to investors who provided funds for the business, monitoring the continued financial health of the business, and reducing the risk of exposure of the business. These goals are typically achieved through funds availability. Budgets are prepared at different levels from corporate to individual departments of individual business units and these budgets will include both capital budgets for facilities, operating budgets for regular operations, and cash flow estimates for expected and actual cash flows. A separate article discussing funding sources would be found linked in your reading article for the week.
Continuing with this discussion let's talk about returns on investment, financial health, and risk exposure. Returns on investment - all the investment proposals are evaluated using techniques like discounted cash flows that seek to compute the net cash surpluses generated by each proposal over its lifetime. Only the best proposals with a positive net cash flow are selected and included in the capital budget. Profitability of regular operations is monitored using management accounting techniques such as contribution analysis of products, customers, and business units, and returns generated by each facility. Financial health - analysis of financial health statements is a standard practice used to keep a watch on the financial health of the organization. The analysis seeks to measure the proportions of debt and equity in the capital structure, the liquidating of working capital, and the speed of the cash conversion cycle. Risk is exposure the finance manager is typically responsible for hedging operations such as insurance for contracts and options that seek to protect the business against developments such as the disaster that destroys the organization's facilities and variations in the prices of the businesses raw materials and products. It should be noted that these functions are of the managerial nature. Accordingly, they are all covered by the term managerial finance. Techniques like financial ratio analysis, activity-based costing, variable budgeting, and sensitivity analysis are used for discussing these functions and you'll actually have a chance to study this in your business program. Finance managers are also typically responsible for technical issues like assigning all transactions to the right account and ensuring that published financial reports comply with generally accepted accounting practices of the country.
Finance management functions - some examples of these are listed underneath dividend, payments, mergers, and acquisitions pricing decisions, share and bond issues. So let’s take a look at each of these. While dividend payouts can provide immediate returns to investors profit. Retention can enable expansion of the business and increase shareholder value through capital appreciation. The business will also have to consider the impact a dividend payout can have on its cash flows and capital structure. Mergers and acquisition are different is where a company chooses the mergers and acquisition route for growth and will be the finance manager's responsibility to help with the valuation of businesses to be acquired. Such valuations will be primarily based on the future profit potential of the business rather than the value of tangible net assets of the acquired business. Pricing decisions - while the impact of prices on sales volumes will be assessed by marketing people, the finance manager will have to examine the financial implications of any shrinkage or growth on the volumes. For example, if the sales volumes fall to low the overhead component of costs might be inadequately recovered. On the other hand high sales volumes might allow prices to be lowered more proportionately. Share and bond issues - in addition to capital structure issues sharing bond issues also need to consider the prevailing conditions in the securities market. Issuing these in times when the market is low might fetch too little money for the business. This article looked at financial management and corporate finance fundamentals as well as the functions and practices of finance management. In addition to ensuring availability of finance for investment in working capital the finance manager is also responsible for monitoring the organization's financial health, monitoring returns provided to investors, and reducing the risk exposure of the business.
Congratulations on finishing week five of BA101 introduction to business, but as you know in order to be successful you still have to complete the discussion question and assignment for the week. The discussion question is on financial management and it says why financial management is essential to the success of the company? What can potentially happen if the cash flow is not properly managed? This is a great question and we even went over that article that you have in your week’s mature material on the fundamentals of financial management so you have plenty of research to help you write this. Don’t forget there is a participation requirement where you need to have your initial substantial response and by week five and you have to have your replies in to two other fellow students by day seven. Also there is a word requirement word length requirement of between 75 and 150 words and if you use any outside resources or evidence you have to cite it correctly within the discussion posting. Your weeks five assignment is also on financial planning and you have the opportunity of creating a PowerPoint presentation, a newsflash, or traditional paper. Essentially this week you need to research identify and discuss what financial planning is for business wire this important and what can happen if not done accurately. I'd like to just recommend that you try to utilize documents or articles from the Grantham University library. Try to get a more scholarly documents or peer-reviewed journal to do your initial research, trust me. It will help you not only with your content but as your credibility as a scholar and a researcher. Finally if you have any questions please be sure to get with your professor in advance. don't wait till the last minute when you're trying to put together your paper or your assignment be sure to get with your process or early in the week so that they can answer any questions that you may have and if you do need any extra time to complete your assignment please try to contact your professor in advance of being late if possible
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