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Exploring Business Activity

Quantitative analysis of current situation: Quantitative analysis is based on numbers. It is to assist in the making an appropriate plan. For example, if Oxfam costs are lower than those of rivals that they can undercut their prices, or make more profits from the same volume of sales. If they are selling more than their rivals are, they could set themselves the aim of retaining market leadership. If their customers are pleased then they can focus on customer pleasing to beat competitors.

For example, if interest rates are high they know that costs are likely to rise if they have borrowed money. Qualitative analysis of current situations: Qualitative analysis is more about feelings or opinions and instincts. Qualitative analysis is more emotional. In Microsoft, qualitative analysis can be earned from asking questions and discussing issues with different groups. For example, they might interview small groups of customers to find out about what they think of the company or goods and services.

How do customers view them compared with the competition? They can talk or discuss with employees and pressure groups to discover what they think of them. Setting aims and objectives: The aims of the businesses depend on the kind of business

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they are. For example, the aims of Oxfam will be quite different from those of Microsoft. A firm needs to have a clear sense of direction that should be clearly communicated to all stakeholders. The aim of the firms which are then split into objectives. The objectives set out more specifically how the aim can be achieved.

For example, the aim of the Microsoft is to be the world’s leading software supplier. The objective is to undercut the price of rivals; to take over other similar makers; to increase sales by giving discount price to the customers. Planning strategies: The quantitative notification about benefits or profits might suggest that the company must be wary about expanding at any time. The qualitative notification about growing customer preference for organic goods may suggest that they expand their organic lines.

The firms need to make plans to take them forward into the future may be for five years or more. The plan must set out where the business wants to go, the aims and objectives, and details of how they will achieve these aims; it is referred to as the strategy. A well strategy must be: B) Public and voluntary sector strategies Public sector service provision: The trust receives funds from the government and then is expected to control these funds efficiently to meet government targets.

The targets relate to such things as managing waiting lists so that patients do not have to wait too long for treatment. Primary health care trusts are therefore designed to seek to give the maximum service given the resources available. Voluntary sector services: In the voluntary sector much of the emphasis in the aims and strategies of businesses is on providing service. E. g. Oxfam Ambulance service and their voluntary organisation designed to provide medical support to the public at times of need.

It can play particularly important role in training volunteers to give first aid. Oxfam raises money through a range of fundraising events and that money can then be used to provide training, and pay for the maintenance of ambulances and other services. Service level agreements: To create a service level agreement it is necessary to establish certain standards that must be met. We have already seen this in the case of Oxfam or primary health care, relating to the length of patients waiting lists and the time taken for a patient to be treated.

Provision at or below cost: There are so many pressures on public sector and voluntary businesses to obtain products and services at a maximum cost. It is because of government, rather than a private owner, is the key stakeholder in the business. Because the government represent the community it is more concerned with making sure that there is a return to society. For example, health and social services provide home nursing to elderly and sick at below cost price, Oxfam operates health services during disaster periods by providing nurses or doctors and to help people with any types of illness.

So the government will provide many services and goods at below cost to certain groups. C) Private sector Strategies Profit maximisation: The principle of adjusting price and/or output volume in such a way as to earn the largest possible profits in Microsoft. This is said to be accomplished by continuing to increase production up to the point where the cost of the last unit of output just equals the additional revenue received by the firm from selling that additional unit of output (Marginal Revenue).

This is the profit maximizing output since profits would be reduced by producing still another unit (the extra cost would exceed the extra revenue. Sales: There is another strategy that private sector firms can implement, which is to maximise sales. There are two various ways of calculating sales: * Sales volume: the number of items sold. * Sales value: the money received from making sales. It is also called sales revenue.

Products/services at cost/profit: The business aims to drive sales of Microsoft products by working with large enterprise customers to help them adopt and deploy Microsoft products, and with technology solution providers to make sure they can offer a wide range of Microsoft-products related services at cost. In Microsoft, only two percent of the company’s revenue comes from consulting and support services. Although it was generating a profit, it was also trading a very fine line with its channel partners, who were already offering many of the same services that corporate customers were asking Microsoft to provide.

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