1. Functional Areas of Business What do the different parts of a business do?

2. Functional Areas of Business

3. Functional Areas Most businesses consist of a number of different departments, each of which has a specific job or task to do - these are called 'functions'. You are likely to have heard the names used for these functional areas before, so let's find out what you already know about them.

4. Human Resources

5. Job Particulars Job particulars – the job particulars usually give information about the business and the job. The information is more detailed than in the job advert, it may give a brief history of the business what it would expect from a successful applicant, and may give the conditions of work including the hours of work, rate of pay and holiday entitlement. It also explains how to apply for the job.

6. Job Description A Job description sets out what the person appointed to the job will have to do. It details all the roles and responsibilities for the job, the position in the company and who the person will be responsible to.

7. Person Specification The Person Specification is a description of the sort of person who would be suited to the job. It will also say what skills and experience are required to do the job.

8. CV’s and application forms An Application form is a form which has to be completed by all the applicants for the job giving details about themselves, qualifications and experience. A Curriculum Vitae (CV) is a and a letter can take the place of an application form. The CV has all the personal details, qualifications, work experience and contact details for referees.

9. What can you remember from yesterday?...and what can we tell the others? Using the ALL ANSWER sheet (classmate Bingo) get all the questions answered, First one gets a prize – just like bingo

10. Finding Examples….. Find an example of a Job Advert, Print screen it paste to word. Is there a Job Particulars with it? Is there a job description? What info does it include? How do you apply for the job – what do you have do to apply, send a CV or complete a

11. Once the job has been advertised… Once the job has been advertised and the applicants have been sent the Job particulars, job description, person specification and completed either the application form of returned the CV and covering letter the selection process can start to take place.

12. Selection The selection process is about choosing someone to fill the job. When more than 1 person applies for a job there needs to be a selection process. The selection criteria varies from business to business, it will usually be on qualifications, experience and the quality of applicants. The selection process leads to candidates being shortlisted. After being shortlisted, candidates are invited for interview. By asking questions at the interview the employer can find out weather the candidate would be suitable for the job, especially their communication skills. The last stage of the selection process is to take references – there are reports on the candidate from their current or most recent employers, and a character reference.

13. Training Staff In the modern world of work, it is important to keep the employees trained in the skills that they need to do the job. There are different types of training:- On the job training – this is training workers in the workplace. Usually one member of staff training (showing) another what to do. Off the job training – this is where employees are taken away from the work to be trained.

14. Skills VS Attitude The SKILLS of an individual are only part of what makes a good employee. Equally important is the ATTITUDE of an employee. For example, does an employee work hard? Are they honest? Are they positive and loyal to the business? Are they a good team worker? OR Do they ‘slack off’ at the smallest at the smallest excuse? Are they always complaining about their work? Do they do the bare minimum at work? EMPLOYERS OBVIOUSLY WANT TO EMPLOY PEOPLE WITH EXCELLENT SKILLS AND ATTITUDE.

15. Motivation The ways in which a business treats it staff has a very important impact on attitudes and motivation. MOTIVATION is about the ways in which it can encourage its employees to give their best to the business, encouraging them to be committed to doing what they do to the best of their ability – all the time. Well motivated workers are more likely to work hard. HOW can a business motivate its workers? Produce a mind map with your thoughts.

16. Motivation mindmap. Motivating Employees Pay a fair wage Decent working conditions Keep the workers informed about decisions in the business Give worker the power to organise their work in the best way Be considerate of the employees needs Be consistent in how staff are treated

17. The Laws Workers have considerable rights in Law. Over the years the Government has passed legislation (Laws) that protect workers from unfair practices by employers. There are a number of Rights that the Laws give to workers. Task Find out what the Laws are that protect workers/and employers.

18. Individual work - Each group will need to teach a lesson on following Laws. Discrimination at Work Act Health and Safety Act Trade Unions Working time Directive A PowerPoint to say what it is and what is covered and a way of testing the knowledge you have taught. Add a slide on the Recruitment Process – from Job advert to Selection.

19. The Laws Appointment and Training - Workers can not be discriminated against on the basis of age, sex, race or disability. Protection at Work – The Laws say that workers must be paid the same for doing the same job and must be paid regularly according to their contract of employment, which also states holiday entitlement. There are also Health and Safety Laws to protect employees. Leaving work – workers are protected from unfair dismissal by law and can not loose their job without good reason. Other Rights – There are also Maternity rights and Paternity rights to consider as well as EU directives on time and hours worked.

20. Worker Representatives Staff Associations Trade Unions

21. Customer Services

22. Customer Service How do businesses find out what customers want? Primary Research? – give examples Secondary Research? – give examples What is good customer service? List the 8 things that can contribute to good customer service

23. Disadvantages of poor customer service Poor customer service will almost inevitably hit sales Customers will find substitute, competing products to buy Repeat purchases will be lower Lower sales means lower profits If competitors are providing good customer service it could even force a business to close down At its extreme, the very survival of the business depends on its customer service

24. Researching Customer needs Market Research - finding out what the customers want or need Primary Research – questionnaires, survey, focus group, interview. Secondary Research – (desk research) internet research (Yell.com), magazines, newspapers, company reports

25. The experience the customer has in dealing with a business is called Customer Service If that experience is good then the customer will use the business again. Getting customer and hanging on to them is an important issue for many businesses. Customer service covers many areas; the way a customer is treated; the quality of the products; the knowledge of the staff; after sales service; etc Customer Service Recap from Unit 1

26. Progress Check 1 What is good customer service? How do businesses collect customer information? What type of research is an interview? What is desk research also known as?

27. Providing Customers with Excellent service. Successful companies are ones that provide customers with the products and service levels they want. Customer service refers to the methods a business uses to enhance or improve the experience a customer has when using the good or service. It builds relationships and customer loyalty, meaning repeat purchase. They will also tell their friends, word about good customer service spreads faster than any advertising.

28. What makes good customer service? There are a number of things that contribute to excellent products and customer service. Make a list of the things that make good customer service, think of specific examples.

29. What makes good customer service? The following slides contain information about the things businesses think create good customer service.

30. Meeting the needs of the customer Customers will buy a product if it meets their needs, So getting the product right is essential for the success of any business Companies can find out what their customers want by conducting market research and asking their customers. Examples of meeting the customers needs may be that a restaurant is clean and tidy, good customer service is provided

31. Quality How does quality meet customers needs? In business, quality is meeting a standard that satisfies customers needs. To achieve quality a business may have to invest in its service, staff training and customer care.

32. On time service This is just what it says - Getting a product to the customer when they want it will encourage repeat purchase. How many times have you ordered something then had to wait for it to arrive? Online shopping orders in shops, cars etc

33. Progress check 2 What are the 3 main ways that a business creates customer service?

34. Innovation Being innovative can help to deliver effective customer service..... Businesses must innovate to stay ahead of the competition, This is especially true if the product being sold was first developed a long time ago! For example Coca Cola.....and is continually working hard to bring out new products and diversify! How many coke brands can you name?

35. Collaboration Most businesses operate in a competitive environment, there is however, sometimes the opportunity for collaboration with other firms, government agencies or with pressure groups that will improve what is being offered to customers. For example In the UK buss companies have the opportunity to negotiate Bus Quality Partnerships with the local authorities. In return for a certain level of quality the local authority provide investment funds for improvements. These collaborations help to improve the customer service

36. Spotting Problems Successful businesses are ones that can identify problems as they arise and respond to them. Customer service staff or assistants in shops are often at the front line of customer service and often see the problems as they arise better than the managers. Taking the suggestions and ideas of ‘front line staff’ in to consideration when deciding how to resolve problems when they arise. ‘front line staff’ can attend seminars and training looking at service quality.

37. Listening to Customers Any business that wants to provide a good service to its customers must listen to them! If the business wants to expand its customer base it must also listen to its potential customers who are at the moment not buying the product or service. One way of listening to customers is by market research – have you seen any market research? Interviews, customer surveys etc can highlight the customers basic requirements for good customer service.

38. Dealing with Complaints How a business deals with complaints is very important to repeat purchase/business. If customers have a complaint and do not think that it has been dealt with properly then they may not make a repeat purchase or use the business again. Customers need to feel that they have been treated fairly. The customer may not always be right but must feel they have been treated properly and have been listened to! Good customer service involves trying to find solutions to problems that satisfy the customers needs and are affordable.

39. Staff Training Only properly trained staff can provide a quality product. Training is essential for every aspect of a business The quality of a customers first time experience can make the difference as to if they use the product or service again (repeat purchase/business0.

40. Going beyond what is expected Some businesses acquire a reputation for excellent customer service. This can be a major selling point and encourage repeat purchase/business. Many businesses today say that one of their aims is to ‘exceed customer expectation’. This means giving the customer more than they expect – going the extra mile!

41. Progress check 3 List 3 of the 5 other ways to provide good customer service?

42. Marketing/Sales

43. Market Research What do customers want? How much will they pay? Can we provide the good/service at a profit? Where will we find this information?

44. Market research has 3 main stages Stages Of Market Research Stage 1 Designing the research Planned and designed to meet the purpose. Primary and Secondary date used? Stage 2 Undertaking the research Once designed the research should be carries out. Stage 3 Analysing the informatio n Research is analysed and interpreted What trends are shown? Quantitative and qualitative data

45. Stage 1 – Designing the research Market research should be planned and designed to help identify what it will achieve. Does it want to identify quantitative or qualitative data

46. Undertaking The Research Once the market research has been designed it can be carried out. Depending on the type of data that you want to collect you your research will have been designed that way? Nestle wanted to primarily to collect qualitative data, so decided to ask the views of chefs and other customers who bought the Maggi products. The research focussed on what customers thought about existing products and researchers spoke face to face with chefs and help open discussion.

47.  information that comes directly from the source-- that is, potential customers. You can compile this information yourself or hire someone else to gather it for you via surveys, focus groups and other methods.  Surveys  Questionnaires  Focus groups  Interviews and  Observations Primary Research

48.  using your own resources, first decide how you'll question your targeted group: by direct mail, telephone, or personal interviews. If you choose a direct-mail questionnaire, the following guidelines will increase your response rate:  Questions that are short and to the point;  A questionnaire that is addressed to specific individuals and is of interest to the respondent;  A questionnaire of no more than two pages;  A professionally-prepared cover letter that adequately explains why you're doing this questionnaire;  A postage-paid, self-addressed envelope to return the questionnaire in. Postage-paid envelopes are available from the post office;  An incentive, such as "10 percent off your next purchase," to complete the questionnaire. When conducting primary research.......

49. Market research that's already compiled and organised for you. Examples of secondary information include reports and studies by government agencies, trade associations or other businesses within your industry. Secondary research is sometimes called ‘Desk research’ as you can do it at a desk! Secondary Research

50. Secondary research uses outside information assembled by government agencies, industry and trade associations, Unions, media sources, and so on. It's usually published in pamphlets, newsletters, trade publications, magazines, and newspapers. There sources include YELL.COM, Internet, Local newspaper, Library (market reports) When conducting secondary research.......

51. Market Analysis Who do we sell to? How much do we sell to different groups? Are there new markets? Who are our competitors?

52. Analysing the information Once the market research has been collected the information can be analysed – this means interpreting the data that has been collected. It is possible to detect trends in the answers, did people say the same thing or were the comments all different? Some data will be quantitative (interpreted numerically) some will be quantitative (opinions, feelings and attitudes)

53. Advantages and Disadvantages of market research ADVS Can help identify problems with Price Product Place Promotion Target marketing Identify market opportunities DISADVS Costly Time consuming Cheaper to follow ‘gut’ instincts Can give wrong answers Ask wrong people People may lie/not give the truthful answers

54. Market Strategy Marketing strategy is also known as the 4P’s of marketing…….. What price? The product? How do we make sure people know about us? Where should we sell our products? Go to the following PPT – MarketingMarketing

55. Sales Team Local Regional National International

56. Research and Development

57. Design and Product Development Design helps a product stand out from its competitors. It is a very important form of PRODUCT DIFFERENTIATION Design and Product Development

58. James Dyson In 1980 Dyson tried to convince manufacturers of vacuum cleaners to buy the rights to manufacture his revolutionary cleaner, they all turned it down! His bagless cleaner first went on sale in Japan in 1986, coloured pink, it became a cult object and sold for the equivalent of £2000. In 1991 it won the International Design Fair prize in Japan. Money from the sales in Japan Dyson set up a factory in the UK and it went on sale at £200, at the top of the market. Within 2 years it became the best selling vacuum in the UK Design was the key to the success of Dyson. http://content.dyson.co.uk/insideDyson/search.asp?c atID=Product development&hf=&js= http://content.dyson.co.uk/insideDyson/search.asp?c atID=Product development&hf=&js=

59. Design and Product Development There are many other examples of products which have been successful because of their design. These include:- Samsung phones, Converse Trainers, Skull Candy/Beats Headphones Smeg fridges

60. Design Mix There are 3 main elements in the design of a successful product. These together are called the DESIGN MIX :- 1. Function - how well it works, 2. Cost - cheaper the better, 3. Appearance – what it looks like

61. The Design Mix - Function Function is about how well a product works and the extent to which is does what it says it will! Will a washing machine clean clothes properly?, Will a TV set give a good image?, Will a pair of shoes last as long as they say? Good design is about being one step ahead of the competition!

62. Dyson …and Function There are a number of different aspects to the functionality:- 1. It cleaned better than most of its rivals, being bagless meant no loss of suction. 2. It was easy to use, emptying it was easier than having to replace the bag. 3. It was very strong, very difficult, under normal circumstance to break it! 4. The company has continued to improve the functionality of its vacuums.

63. The Design Mix - Cost The cheaper the cost of producing a product, the better. Designing a product that has a cost of production lower than its rivals will give a business competitive advantage. Over time the cost of producing cars has fallen because of the improved design, less and lighter steel is used and machinery is more sophisticated than 20 years ago. Producing the lowest price products is not always the best thing to do!

64. Dyson and….. Cost Dyson cleaners typically cost more to produce than the competition. Partly this is due to the high cost of research and development. Dyson has to weigh up the competitive advantage of producing a high quality but high production cost item against making lower quality but lower cost items.

65. Appearance Stylish, elegant beautiful products are more likely to sell than products with no style. Appearance is, therefore, very important in design and the Design Mix.

66. Dyson and………..Appearance The Dyson vacuum cleaners with their bright colours and modern styling has been a design success.

67. Scientific Research There are many products which are based on the use of traditional materials such as wood and cotton. For simple products like wooden toys or furniture, it may be possible to create beautiful products without the need for science. However, scientific research is at the base of the majority of products made today. A plastic toy will be made from ‘plastic that has been scientifically researched and produced. A modern car, with its bodywork and engine is full of science and technology, Some businesses have their own research and development department, some buy the components that have been developed by others.

68. Dyson and……..Scientific Research Dyson has its own research and development department. The original Dyson had 5126 different prototypes before going in to production. The R&D department is in Wiltshire

69. Administration/IT Support

70. Clerical work Reports on Meetings Reception Communications - e.g. receiving telephone calls, greeting visitors Filing and Recording Sorting Mail

71. Technical Support Hardware - e.g. computers Software support - e.g. accounts software Network Management

72. Production/Operations

73. Production/Operations Production and Operations is about the transformation of production and operational inputs into "outputs" that, when distributed, meet the needs of customers.

74. Production/Operations The process in the above diagram is often referred to as the "Conversion Process". There are several different methods of handling the conversion or production process - Job, Batch, Flow and Group POM incorporates many tasks that are interdependent, but which can be grouped under five main headings:

75. PRODUCT Marketers in a business must ensure that a business sells products that meet customer needs and wants. The role of Production and Operations is to ensure that the business actually makes the required products in accordance with the plan. The role of PRODUCT in POM therefore concerns areas such as: - Performance - Aesthetics - Quality - Reliability - Quantity - Production costs - Delivery dates

76. PLANT To make PRODUCT, PLANT of some kind is needed. This will comprise the bulk of the fixed assets of the business. In determining which PLANT to use, management must consider areas such as: - Future demand (volume, timing) - Design and layout of factory, equipment, offices - Productivity and reliability of equipment - Need for (and costs of) maintenance - Heath and safety (particularly the operation of equipment) - Environmental issues (e.g. creation of waste products)

77. PROCESSES There are many different ways of producing a product. Management must choose the best process, or series of processes. They will consider: - Available capacity - Available skills - Type of production - Layout of plant and equipment - Safety - Production costs - Maintenance requirements

78. PROGRAMMES The production PROGRAMME concerns the dates and times of the products that are to be produced and supplied to customers. The decisions made about programme will be influenced by factors such as: - Purchasing patterns (e.g. lead time) - Cash flow - Need for / availability of storage - Transportation

79. PEOPLE Production depends on PEOPLE, whose skills, experience and motivation vary. Key people- related decisions will consider the following areas: - Wages and salaries - Safety and training - Work conditions - Leadership and motivation - Unionisation - Communication

80. Finance and Accounts

81. Cash flow is the flow of money into and out of the business. There are inflows, cash coming in to the business, There are outflows, cash going out of the business What is Cash Flow

82. Inflows VS Outflows InflowsOutflows Own money, Loan from the bank, Cash from sales Inflow = RECEIPTS Wages, Equipment, Telephone, Gas, electricity, rent and other bills, Interest on the loan, Advertising Outflows - PAYMENTS

83. Cash flow is shown in a table, The NET CASH FLOW is the inflows minus the outflows. Showing Cash Flow

84. Businesses can not survive without cash. Imagine what would happen if the business didn’t have enough money to pay its bills – anyone owed money could take you to court to get their money back and the business would have failed Insolvency is when the business runs out of cash and can not pay. The Importance of Cash Flow

85. It is important that businesses keep up to date with their cash flow, it is vital for the survival of the business. CASH FLOW FORECASTS – is a prediction of how cash will flow in to and out of the business. They are also:- Part of the business plan, Identify if there is enough cash in the business To take to the bank if you want a loan Keeping Up To Date

86. Opening balance, cash at the start of the month. Net cash flow is added to the opening balance for the month, this becomes the Closing balance – which is the starting balance for the next month So, opening balance in Feb is £200, £100 in March, -£300 in April etc Cash Flow Forecasts

87. Sales can change – in some businesses different seasons or special events can affect the sales. Costs can change – the price of materials, parts can change, wages can go up. This leads to more money leaving the business. Credit terms can change – typically a business does not have to pay for things straight away – this is called Trade Credit – a form of loan given to the business. The credit can improve cash flow. Con’t What Affects Cash flow?

88. Stock levels can change – STOCKS are the materials held by the business. A car manufacturer will hold stocks of steel, paint, car engines or cars, a florist will hold stocks of flowers. Buying stocks means outflows of cash but selling them means inflows. Increasing stock without increasing sales will make cash flow worse. What Affects Cash flow?

89. How can a business avoid cash flow problems:- Get the help and support off the bank or investors, Ensure market research is thorough, Thoughtful cash flow planning, Investigate where you can get help to spread payments, Track the actual cash flow against the forecast. The Importance of Planning

90. …is important for ALL businesses...is the level of output where revenues just equal the costs of a business. Knowing the Break Even point helps a business to understand how many products it needs to sell to just cover the costs of production. If revenues equal costs the business is not making a profit OR a loss, this is breaking even The break even point is important as it is the tipping point between profit and loss. The Break Even Point….

91. To find out the break even point a business needs to work out the total revenue and total costs and calculate the Profit or Loss You calculate this by…. Calculating Break Even Point = Profit or Loss Total Revenue - Total Costs

93. On the previous slide The information about break even can be shown on a break even chart. The chart shows the total revenue, total costs and fixed costs. The break even point is where the total costs and total revenue lines cross Below this point there is a loss Above this point there is a profit and the margin of safety Break Even Charts

94. If costs rise the break even point will go upwards. The total costs line will rise meaning that it crosses higher up the total revenue line The break even point will be higher. What if costs rise?

95. If the price of a product goes up the break even point will fall. The higher the price rise the sharper the total revenue line is! What if the product price goes up?

96. Drawing a break even chart is not the only way to find the break even level of output. The break even point can also be calculated using the CONTRIBUTION ANALYSIS. This means using the sales volume, variable cost and fixed costs. Contribution Analysis.

97. How do we calculate the contribution per unit? How do we then calculate the breakeven point? If a business sells it’s cakes for £12, the variable cost are £4, what is the contribution per unit and what is the breakeven point if total costs are £80,000? If a business sells it’s shoes for £45, the variable cost are £5, what is the contribution per unit and what is the breakeven point if total costs are £60,000? Contribution analysis starter

98. The following slides will tell us. What do businesses use breakeven for?

99. The word analysis breaking down a complex issue, topic or situation in to smaller more manageable parts to better understand what is going on. Breakeven analysis helps a business to break down a number of things about its business to give it useful information that may help it in future planning or taking action to correct problems. The uses of break even are as follows:- Using break even analysis

100. It is used to understand what has already happened. For example if a business made a loss in the previous year it can analyse what went wrong, it would be useful to know what had been the break even point of output. This can be compared to the actual level of output, was the price right or the costs too high? Understanding the Past

101. Break even analysis can help a business understand how targets can be met. Using a break even chart can show the amount needed to be sold to reach a particular target or how far above the break even point the margin of safety is. Break even analysis allows a business to ask ‘what if’ questions... What if the price of the boxes is increased? What if the business could cut its costs by 10%? Achieving future targets

102. Break even analysis is essential in any decision about launching a new product. The business needs to know what the level of output would be given certain assumptions about price, revenue and costs. Break even analysis may show that there is little chance of a new product breaking even in the long term. In this case the business should not launch the new product. Launching a New Product.

103. Anyone setting up a new business should use break even to see whether the business idea is viable. If break even analysis shows that a new business is unlikely to break even in the medium to long term then the business idea needs to be completely re-thought! Setting up a New Business

104. Break even analysis is an essential part of a business plan. If the business applies for a loan from the bank, the bank is likely to ask to see the business plan including its break even analysis. A bank may refuse a loan if there is no break even analysis. Business Plans

105. Published Accounts Public Limited Company Legally required Anyone can see them See an example from Tesco

106. Capital Loans Shares Buildings Equipment