Differences Between Public and Private Companies
A private company is owned by the company’s founders, management, or a group of private investors. A public company is a company that has sold all or a portion of itself to the public via an initial public offering.
A public company can sell its registered shares to the general public. A private company can sell its own, privately held shares to a few willing investors.
Traded on
The stocks of a public company are traded on stock exchanges. The stocks of a private company are owned and traded by only a few private investors.
Regulations
A public company must adhere to many regulations and reporting standards per the SEC. Until the private companies reach $10 million and more than 500 shareholders, it does not have to follow any regulations issued by the SEC.
Advantage
The primary advantage of a publicly-traded company is that it can tap into the market by selling more shares. The primary advantage of a privately traded company is that it does not need to answer to any stockholders, and there is no need for disclosures.
Size
Publicly traded companies are big companies. Privately traded companies can also be big companies. So, the idea that a privately held company is smaller is utterly false.
Source of funds
For the publicly traded company, the source of funds is selling its shares and bonds. For the privately traded company, the source of funds is a few private investors or venture capitalists.
A for-profit organization is one that operates with the goal of making money. Most businesses are for-profits that serve their customers by selling a product or service. The business owner earns an income from the for-profit and may also pay shareholders and investors from the profits.
The Ansoff matrix (product market expansion grid) is a strategic planning tool that provides a framework to help executives, senior managers, and marketers devise strategies for future growth.
Product: What you sell. Could be a physical good, services, consulting, etc.
Price: How much do you charge and how does that impact how your customers view your brand?
Place: Where do you promote your product or service? Where do your ideal customers go to find information about your industry?
Promotion: How do your customers find out about you? What strategies do you use, and are they effective?
The marketing mix is the set of controllable, tactical marketing tools that a company uses to produce a desired response from its target market.
Primary research is research you conduct yourself (or hire someone to do for you.) It involves going directly to a source – usually customers and prospective customers in your target market – to ask questions and gather information. Examples of primary research are: Interviews (telephone or face-to-face), Surveys (online or mail), Questionnaires (online or mail), Focus groups, Visits to competitors’ locations.
The most widely used secondary market research methods include the internet, government and agency reports, research journals, trade associations, media outlets, libraries, digital intelligence tools, competitor data, internal sales or customer data, and website or app analytics.
The Boston Consulting Group Matrix (BCG Matrix), also referred to as the product portfolio matrix, is a business planning tool used to evaluate the strategic position of a firm’s brand portfolio. The BCG Matrix is one of the most popular portfolio analysis methods.
A source or sources of finance, refer to where a business gets money from to fund their business activities. A business can gain finance from either internal or external sources.
External sources of finance refer to money that comes from outside a business. There are several external methods a business can use, including family and friends, bank loans and overdrafts, venture capitalists and business angels, new partners, share issue, trade credit, leasing, hire purchase, and government grants.
Internal sources of finance refer to money that comes from within a business. There are several internal methods a business can use, including owners capital, retained profit and selling assets.
An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities.
The organizational structure also determines how information flows between levels within the company. For example, in a centralized structure, decisions flow from the top down, while in a decentralized structure, decision-making power is distributed among various levels of the organization. Having an organizational structure in place allows companies to remain efficient and focused.
Organizational structures are normally illustrated in some sort of chart or diagram like a pyramid, where the most powerful members of the organization sit at the top, while those with the least amount of power are at the bottom.
The four types of organizational structures are functional, multi-divisional, flat, and matrix structures. Others include circular, team-based, and network structures.
Span of control: the area of activity or number of functions, people, or things for which an individual or organization is responsible. Delegation: a person or group chosen to represent another or others.
The three-level hierarchy shows us how the organizational structure is divided into three main groups: upper, middle, and lower levels. Authority and responsibility flow from top to bottom.
Bureaucracy in business is a hierarchical organization or a company that operates by a set of pre-determined rules.