Understanding Business Functions and Market Dynamics
Company Functions
A company’s primary function is coordinating production factors to create goods and services. Its secondary function transforms raw materials into finished products, enhancing their usefulness and value to meet human needs. This added value is the difference between the value of goods produced and the cost of raw materials: Value Added = Production Value – Raw Material Cost.
Company Objectives
While maximizing profit through sales revenue is a key objective, companies also pursue
Read MoreCost Accounting and Financial Accounting
Financial Accounting and Cost Accounting
Financial Accounting
Financial accounting analyzes, records, and reports the financial and economic operations of an economic entity. This process interprets and reports matters relating to assets, liabilities, income, and expenditures.
Financial accounts provide information related to property, rights, and obligations to third parties. Its main function is to record, classify, and summarize the economic and financial operations of businesses, aiding management
Read MoreIncoterms: Understanding International Trade Rules
Incoterms are rules for the interpretation of trade terms, establishing international standards to define the responsibilities of buyers and sellers in overseas contracts.
International commercial contracts use abbreviations that outline duties, financial obligations, and responsibilities, aiming to avoid discrepancies and misunderstandings in global trade.
First published in 1936 by the International Chamber of Commerce (ICC), Incoterms are regularly revised to reflect the evolution of international
Read MoreMarketing Essentials: Strategies and Concepts
Errors in Marketing Research
1. Talking to everyone except real potential buyers.
2. Ignoring warning signs due to belief in project success.
3. Asking obvious questions that only confirm ideas, not revealing interviewee thinking.
4. Ignoring that 20% of customers often provide 80% of business volume.
5. Assuming competitiveness solely based on lowest prices.
6. Failing to recognize competitor strength and potential reactions.
7. Underestimating market entry and share acquisition time (years, not months)
Read MoreInternational Marketing: Strategy, Analysis, and Global Market Entry
The Importance of International Marketing
International marketing is a crucial global economic activity. Historically, trade between nations has been a source of wealth for economic powers. Access to foreign markets can transform a product considered commonplace locally into a high-value item internationally. For example, while alpaca wool sweaters may be everyday items in Bolivia, in European and U.S. markets, baby alpaca wool is a premium, high-fashion material.
International Marketing Defined:
Read MoreTechnology, Costs, Logistics, Quality, and Stock Management in Business
Technology: is defined as a specific or concrete way to combine factors of production to produce a good or service. Each good or service produced is a productive technology partner. There is a change of technology when factors of production are combined or used differently to produce the same product. Companies allocate a portion of their resources to improve their production technologies. This implies investment in research and development (R&D). R&D comprises creative work undertaken systematically
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