Briefly discuss the value of diversity in business.
Diversity entails human characteristics that influence a person’s value, opportunities, and perception of self and others in the workplace. The primary characteristics include gender, race, ethnicity, age, sexual orientation among others. We also have the secondary characteristics, and they include work experience, income, religion, family status, geographic location, organizational role, education and work style. A diverse group of individuals with talent and fresh ideas is essential to the company’s long-term success. The challenges as a result of diversity enable the manager to capitalize on the existence of the mixture of age, cultural background, gender, and lifestyle. The manager can then use diversity in the workplace to respond to business opportunities.
Organizations always bring socially distinct newcomers to introduce a new perspective. They understand that individuals with different gender, work experience, the cultural and national background will offer the organization with differing perspectives and opinion that will help solve the problems. Similarly, it is also assumed that when a black manager and a white manager work together, they will come up with a divergent way to solve the problem at hand. Therefore, diversity in a business increases the productivity of the company. Diversity attracts and retains talents in an organization. Employees will feel appreciated and included hence they will increase their loyalty to the organization. Similarly, it increases language skills pool making the organization to compete in the international market.
Explain in detail three advantages that contribute to the success of a small business.
Small businesses succeed in their operations due to the following factors. First, owners of small businesses always minimize the overhead cost. The small business owner usually starts the business with a small budget. Although the capital required to start the business is small, the owners normally keep the expenses to a minimum level hence reducing the overhead cost. They rent cheapest buildings that fit their needs, and this helps to reduce cost.
Second, the success of small business is driven by creativity in management. Most small business owners are creative thinkers and innovators. They always come up with better ideas and take advantage of the market. Similarly, the owners usually sell what they have created quickly before the competitors. Creativity allows small businesses to go an extra mile and provide quality services to the customers (Wilson, & Gilligan, 2012). Also, creativity in management will always result in outstanding leaders. These are leaders who will inspire and motivate employees. They know the objectives of the business, and they will keep doing what is good to benefit the operations of the business. Creative minds are also proactive, and this will help the company to solve problems and make quick decisions.
Third, a small business succeeds because the owner has developed a good strategic business plan. A well-drafted business plan will always play a critical role in the success of the business. Anytime a person wishes to operate a business; he/she will create a business plan that will provide detailed information on the marketing procedure, budget, revenue projections, sales and personal needs. Business owners usually spend a lot of time developing their business plan by getting information from experienced owners (Wilson, & Gilligan, 2012). Also, it is important to keep the business plan dynamic in case you might want to include or remove some items. Therefore, small business owners use their business plan to get funds from financial institutions and other investors.
Explain in detail one strategy by which a business could gain a competitive advantage.
Competitive advantage refers to a strategy the business uses to have an advantage over its competitors in the market. The company with a competitive advantage will always generate more sales and retain customers than the competitors. A company may decide to employ the following strategy to gain a competitive advantage over its competitors. The company can employ cost leadership strategy. The strategy involves a company producing and selling goods and services at a cost that is much lower than the competitors. The company can achieve this objective by producing goods and services on a large scale and exploit the economies of scale. The leading retailer outlets such as Walmart, McDonald, Teva Pharmaceuticals and Home Depot are examples of low-cost leaders.
On the other hand, the strategy is not practical for small companies since it required large capital to achieve economies of scale. The strategy is mainly associate with large companies that offer standard products that have little differentiation and readily acceptable to the majority in the market. Sometimes low-cost leaders offer discounts on their products to maximize sales in a situation when they feel that it has a significant cost. For a company to operate as the lowest-cost producer, it has to use the following. The company should use effective technology to produce the products, it should employ high capacity utilization, it should have access to the most effective distribution channels, and lastly, the company should employ high levels of productivity.
Discuss the relationship between social responsibility, ethics, and strategic planning.
Social responsibility and ethics in a business setting refer to the commitments a person or company makes to do what is right. On the other hand, strategic planning is a way of deciding the direction you would like your business to go and what should be done to for it to get there. All the three concepts form the foundation on which the business operates. For the company to achieve maximum benefits, it must include the social responsibility and ethical criteria before-profit decisions
Ethics play a significant role in ensuring that the company’s mission, goals, and vision is achieved. Besides, ethics provides the company with a sense of direction and framework to carry out its operations. The code of ethics offers the manager a way to communicate the company’s ethical expectations. Also, it ensures that the company’s guidelines are created, and they bind the organization into a single body. The guidelines will also govern the responsibilities of the employees and ensure the company does not deviate from its initial strategic path. Lastly, ethics helps the company to prepare its strategic plans for the best interest of the stakeholders.
Corporate social responsibility is another important element in strategic planning. As the manager, you have the economic responsibility to ensure that the company operates at a profit. Without maximizing profit, the business will not contribute anything substantial. Also, your legal responsibility as the manager or owner of business is to obey the law and maintain a minimum behavior that is expected in the society. In addition, your ethical responsibility is to do what is right for the company and the society. Lastly, philanthropic goodwill ensures that the business contributes to the society without expecting any favors in return.
List and describe at least five marketing research and evaluation components to be included in a business plan.
The market research and evaluation components that should be included in the business plan include the following. First, we should include data about the customers. The business plan should have detailed information about the needs of the customers. What products do they prefer and what is their buying decisions. Also, it is important to understand the market segments of the customers. The information about the target market is also important. You should narrow the target market to a size that can be managed. Second, we should include products in the business plan. The product refers to what is being offered in the market. It is important to know what the competitors are offering and what should be done to take advantage of their products. Also, we should consider the historical and current information about the products.
Third, we should include the market dynamics. It will include the description of the market pattern such as high season and low season. During high season, customers tend to consume more products than the low season periods. Fourth, we should also include suppliers in the business plan. Vendors are people who the company will rely on to supply their products. Lastly, we should include a detailed evaluation of the competitors. The evaluation of the competitors will help the company to highlight their strengths and weaknesses and come up with a good strategy to compete in the market.
Compare and contrast a sole proprietorship, a partnership, and a corporation.
In sole proprietorship form of business, the owner has full control and management of the business. Therefore, decisions regarding the business are made by a single person who is the owner (U.S. Small Business Administration, n.d). In partnership, more than one person is involved in the decision-making process. Similarly, the partners develop a legal partnership agreement that encompasses how they should make decisions in the future. Regarding Incorporation (C corporation and S corporation), the board of directors makes decisions since they are the ones managing it.
Raising Capital for Start-up
In a sole proprietorship, the owner contributes all funds required to start the business. A partnership is different since each partner contributes an equal share of capital to start the business. In a situation when they want more capital, they will add new partners. Both a C corporation and S corporation have an advantage regarding raising capital for their business. They both sell their stock to raise capital for the business.
Distribution of Profit (Losses)
In a sole proprietorship, the owner enjoys profits from the business and also suffers in case of loss. Partnership has a different approach to the distribution of profits and losses. Partners in this form of business share profits and losses as specified in their partnership agreement. In a situation when the profits and losses are unspecified, the partners will share them equally. Incorporation also acts differently. Profits and losses in a C corporation belong to the corporation; however, the shareholders might get profits in the form of dividends. For the case of an S corporation, the shareholders enjoy profits and bear the losses in proportion to their shares.
In a sole proprietorship, the owner is responsible for any tax due and he/she is taxed once. For the case of a partnership, the partners in the business are responsible for any tax due and they are taxed once. In a C corporation, the government taxes both the shareholders and the corporation. While in the case of an S corporation, the government taxes the owners of the business.
Choose Your Business Structure | The U.S. Small Business Administration | SBA.gov. (n.d.). Retrieved March 07, 2016, from https://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru
Wilson, R. M., & Gilligan, C. (2012). Strategic marketing management. Routledge.
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