business management

Ib Business Management

ib business management textbook

As the product passes into decline, so value reductions and falling sales are prone to combine to reduce cash flows. Clearly, if a business had too many of its merchandise either on the decline or the introduction phase then the results for cash flow might be severe.

Tends to be inflexible, e.g. there might be opportunities to extend price even higher. If sales fall, average fixed and average whole prices rise – this could result in the price being raised using this technique.


then irrespective of how low the price or how costly the advert for it costs, it is not going to sell successfully in the long run. The time period ‘product’ contains client and industrial items and providers. Goods have a physical existence, similar to washing machines and chocolate bars. Services don’t have any bodily existence but fulfill client needs in other methods − hairdressing, automotive repairs, childminding and banking are examples of providers.

There isn’t any attempt to impose foreign brands/ merchandise/advertisements on regional markets. The products are more likely to meet native national legal necessities than if they are standardised products. There might be less native opposition to multinational business exercise. No stores limits the chances for shoppers to ‘see and take a look at’ earlier than they purchase. No advertising or promotion paid for by intermediaries and no after-sales service supplied by outlets.

Cash flow is adverse during the improvement of the product as costs are excessive, but nothing has but been produced or bought. At introduction, the development costs might need ended however heavy promotional expenses are likely to be incurred – and these may proceed into the growth phase. In addition, there may be more likely to be a lot unused manufacturing facility capability at this stage which can place an extra strain on prices. As sales increase, then cash flow ought to improve – exactly when will rely upon the length of shopper credit being offered. The maturity phase is prone to see probably the most positive money flows, because gross sales are excessive, promotional costs might be limited and spare manufacturing unit capability must be low.

Industrial products such as mining equipment are purchased by companies not fi nal customers. The advertising division would pay attention to how many products to distribute and whether or not changes to the prevailing marketing combine had been wanted to extend gross sales. Human resources workforce plan would be extra accurate, leading to the appropriate degree of staffi ng. fit in with the general aims and mission of the business − they need to reflect the goals of the entire organisation and should attempt to assist the achievement of those. be determined by senior management − they may decide the markets and products a business trades in for years to come and these points have to be dealt with by managers at a really senior level within the firm.

Another middleman takes a professionalfit mark-up – may make final items costlier to client. No intermediaries, so no markup or profit margin taken by different companies. Producer has full management over the marketing combine – how the product is offered, promoted and priced to customers.