Notes, summaries, assignments, exams, and exercises for Economics for Vocational training

Defining Competitive Territory and Boundaries in Mission Statements

• **Industry:** Companies may operate in one or multiple industries, including industrial goods, consumer goods, or services.
• **Products and Applications:** Firms define the range of products and applications they will offer.
• **Competence:** Companies identify their core competencies and leverage them.
• **Market Segment:** The type of market or customers a company targets.
• **Vertical:** The number of channel levels in which a company participates, from raw materials to distribution.
• **Geographical:** The regions, countries, or country groups in which a company operates.

Establishing Strategic Business Units (SBUs)

Companies can define themselves in terms of products or customer-satisfying...

Value and Satisfaction

The buyer chooses the offerings he or she perceives to deliver the most value, the sum of the tangible and intangible benefits and costs to her. Value is a combination of quality, service, and price (qsp), called the customer value triad. Value perceptions increase with quality and service but decrease with price. (real value - what an enterprise is offering).

Marketing is the identification, creation, communication, delivery, and monitoring in relationship to expectations. If the performance falls short of expectations, the customer is disappointed. If it matches expectations, the customer is satisfied. If it exceeds them, the customer is delighted.

Marketing Channels

To reach a target market, the marketer uses three kinds...

Strategic planning setting long-term goals that may extend 5 to 10 years into the future. Long-term loosely detailed budgets are often created to reflect expectations for these long-term goals. After the goals are set, management designs key strategies for attaining these goals. Companies usually prepare a budget for every month of the fiscal year.

·A rolling budget is a budget that is continuously updated so that the next 12 months of operations are always budgeted.

Who is Involved in the Budgeting Process?

·Participative budgeting involves the participation of many levels of management. It helps create more realistic budgets and it has more acceptance by managers. It also has some disadvantages, such as higher complexity and it involves more...

Direct and Indirect Exporting

• Exporting
  • Exporting can be direct or indirect.
  • In direct exporting, the company sells to a customer in another country.
  • The Internet is becoming increasingly important.

Exporting may be done passively or actively. Passive exporting occurs when a business receives orders from abroad without actively looking for them. Active exporting involves developing policies for setting up systems for organizing the export function and for dealing with export logistics, documentation, and finance.

With indirect exporting, intermediaries handle most aspects of export deals. Returns are obviously lower. You lose control over final selling prices.

• Indirect Exporting: Products are sold to a third party who then sells them within the

Major Shareholders' Rights

• Right to Receive Dividends: Shareholders have the right to receive dividends declared by the company.
• Right to Participate in Net Assets: In the event of company liquidation, shareholders have the right to participate in the distribution of net assets.
• Preemptive Rights: Shareholders have preemptive rights in capital increases, allowing them to purchase new shares before they are offered to the public. These rights are often negotiable.
• Voting Rights: Shareholders have the right to vote in general shareholder meetings. Each share typically allows one vote, although there may be shares that do not grant voting rights in exchange for economic benefits.
• Right to Information: Shareholders have the right to access information

Tax Legislation Explained

Taxes are charges paid in return for the provision of a service or the realization of an activity by the administration.

Special Contributions

These are derived from the collection by which an entity benefits or increases the value of its assets to finance specific works or projects.

Taxes: Classification

• Direct Taxation: Personal in character, taxing economic capacity. Examples: PIT (Personal Income Tax), IS (Corporate Tax), IAE (Economic Activities Tax).
• Indirect Taxation: Levied on the taxpayer's economic capacity as manifested in consumption. Example: VAT (Value Added Tax).

Elements of a Tax

• Chargeable Event: The legal or economic basis from which a tax obligation originates.
• Taxpayer: The natural or legal person obliged

Marketing Strategies and Distribution Channels

Discount Store Strategy: Buying large volumes at reduced margins to offer competitive prices.

Disjunctive Model: Consumers choose products that meet their primary needs, not necessarily all features.

Exclusive Distribution: Used by luxury manufacturers, limiting product availability to select stores, sometimes as part of a business partnership or investment.

Physical Distribution: The storage, handling, and movement of goods within an organization and their delivery to consumers.

Intensive Distribution: Making a product available in as many places as possible, primarily for frequently repurchased items.

Selective Distribution: Limiting product availability to a few stores, typically for specialty or...

Definition and Economic Role of Price

Price is the amount of money given in exchange for a certain amount of goods or service. Economically, the Price Mechanism is the method of market regulation, governed by the law of supply and demand.

Types of Prices (Appellations)

• Fees: Prices paid for the services of a professional (e.g., medical fees).
• Rates: Prices to pay for something, work, or public service (e.g., electricity tariffs).
• Wages: Basic pay for a period of time (weekly or annual) for administrative workers.
• Salary: Workers' basic pay plus bonuses and extras (weekly or monthly).
• Interest Rate: The price of money (price increases).
• Wholesale Prices: Prices that apply to wholesalers who purchase large quantities of a product or service.
• Authorized

Understanding the Accounting Function

The accounting function involves collecting and quantifying financial information generated within a company, then communicating it to end-users to facilitate informed decision-making.

Financial Accounting (External)

Financial accounting, or external accounting, records operations performed outside the company. It allows for the assessment of a company's assets, receivables, and debts, and facilitates the calculation of the company's overall financial results.

Cost Accounting (Internal)

Cost accounting records internal operations that occur within the company. It defines the gain or loss associated with each product and helps determine optimal production quantities.

The Balance Sheet: A Financial Snapshot

The...

Active Banking Operations

These operations involve banks lending resources to their clients. Clients undertake to return these resources plus the interest generated within the allotted time. These operations are reflected in a contract and supported by real or personal guarantees.

Common Active Operations

• Commercial bill discounting operations
• Loans
• Credits
• Bank guarantees

From a financial standpoint, active operations of credit institutions are classified into:

Classification by Term

• Short-term operations: Such as discounting operations, policy loans, etc. These are usually calculated using simple interest.
• Long-term operations: Such as loans in general. These are calculated using compound interest.

Personal Loans

These are granted after assessing the...