INTRODUCTION
TO BUSINESS
Course 19405 – Bachelor´s in Management & Technology
Fernando Alfayate Fernandez
2022/2023
,Tabla de contenido
1. INTRODUCTION ......................................................................................................................................3
1. GENERAL CONCEPTS: BUSINESS AND ENTREPRENEUR..............................................................................4
1.1 INTRODUCTION ............................................................................................................................................................4
1.2 THE ENTERPRISE: CONCEPT AND MAIN ASPECTS ........................................................................................................4
1.3 THE ENTREPRENEUR .....................................................................................................................................................5
1.3.1 THE STRATEGY ..............................................................................................................................................................5
1.4 CLASSIFICATION AND TYPES OF ENTERPRISES .............................................................................................................6
1.5 BUSINESS OBJECTIVES ..................................................................................................................................................6
1.6 BUSINESS ENVIRONMENT ............................................................................................................................................6
1.6.1 SOLE PROPRIETORSHIP .................................................................................................................................................6
1.6.2 PARTNERSHIP................................................................................................................................................................7
1.6.3 CORPORATION ..............................................................................................................................................................7
1.6.4 SEPARATION OF OWNERSHIP AND CONTROL ..............................................................................................................7
1.6.5 COOPERATIVE ...............................................................................................................................................................8
1.7 OTHER FORMS OF BUSINESS OWNERSHIP ...................................................................................................................8
2. PRODUCTION .........................................................................................................................................9
2.1 THE PRODUCTION FUNCTION ......................................................................................................................................9
2.1.1 CONCEPT AND OBJECTIVES (página 318 y 319 - fundamentos dirección de empresas) .............................................9
2.2 TYPES OF PRODUCTION SYSTEMS (página 322 a 327 - fundamentos dirección de empresas) ...................................9
2.2.1 RIGID SYSTEM OF PRODUCTION...................................................................................................................................9
2.2.2 FLEXIBLE or INTERMITTENT SYSTEM OF PRODUCTION ............................................................................................. 10
2.2.3 JUST IN TIME PRODUCTION....................................................................................................................................... 10
2.2.4 PLANT LAYOUT (página 329 a -)................................................................................................................................ 11
2.2.5 PRODUCTION SYSTEMS vs PLANT LAYOUT ............................................................................................................... 12
2.3 PRODUCTION PLANNING AND CONTROL.................................................................................................................. 12
2.3.1 DECISION MAKING ON THE PRODUCTION SYSTEM .................................................................................................. 12
2.3.2 CONTROL OF EFFICIENCY........................................................................................................................................... 12
2.3.3 PRODUCTIVITY ........................................................................................................................................................... 13
2.3.4 COST ANALYSIS .......................................................................................................................................................... 13
2.3.5 MARGIN OF SAFETY ................................................................................................................................................... 13
2.3.6 OPERATING LEVERAGE (OL) (APALANCAMIENTO OPERATIVO) (+Gross Margin => +Leverage => +Risk) ................ 13
2.3.7 RELATIONSHIP BETWEEN BREAK-EVEN POINT AND OPERATING LEVERAGE............................................................ 14
2.3.8 CONCLUSION ON OPERATING LEVERAGE (OL) .......................................................................................................... 14
2.4 APPENDIX ON PRODUCTION PLANNING AND CONTROL .......................................................................................... 14
3. FINANCE (FINANCIAL FUNCTION) ..........................................................................................................15
3.1 INTRODUCTION. ECONOMIC & FINANCIAL STRUCTURE ........................................................................................... 15
3.2 INVESTMENT DECISIONS ........................................................................................................................................... 16
3.2.1 FINANCIAL MATHEMATICS ........................................................................................................................................ 16
3.2.2 CASH FLOW / INVESTMENT VARIABLES .................................................................................................................... 16
3.2.3 PAYBACK .................................................................................................................................................................... 16
3.2.4 NET PRESENT VALUE.................................................................................................................................................. 16
3.2.5 INTERNAL RATE OF RETURN ...................................................................................................................................... 17
3.2.6 NPV vs IRR .................................................................................................................................................................. 17
3.3 THE FINANCIAL STRUCTURE ...................................................................................................................................... 17
3.3.1 INTERNAL EQUITY: SELF FINANCING ......................................................................................................................... 18
3.3.2 EXTERNAL EQUITY: EQUITY CAPITAL & SHARES ........................................................................................................ 18
3.3.3 EXTERNAL EQUITY: EQUITY CAPITAL & SHARES ........................................................................................................ 18
3.3.4 LONG-TERM EXTERNAL RESOURCES ......................................................................................................................... 18
3.3.5 SHORT-TERM EXTERNAL RESOURCES........................................................................................................................ 19
3.3.6 FINANCIAL STRUCTURE AND ITS COST ...................................................................................................................... 19
3.4 ANALYSIS OF RETURN (ROA & ROE) AND FINANCIAL LEVERAGE .............................................................................. 19
, 3.4.1 PERFORMANCE ANALYSIS & LEVERAGE ANALYSIS .................................................................................................... 19
3.4.2 TERMINOLOGY & FORMULAS.................................................................................................................................... 19
3.4.3 ACCONTING INDICATORS .......................................................................................................................................... 20
3.4.4 RELATIONSHIP BETWEEN ROA & ROE ....................................................................................................................... 20
3.5 ANNEX – FINANCIAL STATEMENTS............................................................................................................................ 20
3.5.1 UNTANGLING THE COST OF ASSETS .......................................................................................................................... 20
3.5.2 RELATION WITH FINANCIAL STATEMENTS ................................................................................................................ 21
3.5.3 BALANCE STATEMENT – ASSETS................................................................................................................................ 21
3.5.4 BALANCE STATEMENT – LIABILITIES.......................................................................................................................... 22
3.5.5 BALANCE STATEMENT – EQUITY ............................................................................................................................... 22
3.5.6 PROFIT & LOSS ACCOUNTS ........................................................................................................................................ 22
4. MARKETING (COMMERCIAL FUNCTION) ................................................................................................ 23
4.1 ROLE OF MARKETING IN THE COMPANY................................................................................................................... 23
4.1.1 COMMERCIAL BEHAVIOUR ........................................................................................................................................ 23
4.1.2 MARKETING MANAGEMENT PROCESS ...................................................................................................................... 23
4.1.3 MARKETING CLAIMS TO KNOW................................................................................................................................. 24
4.2 MARKET SEGMENTATION AND POSITIONING OF THE PRODUCT ............................................................................. 24
4.2.1 MARKET SEGMENTATION CRITERIA .......................................................................................................................... 24
4.2.2 MARKET SEGMENTATION STRATEGIES ..................................................................................................................... 25
4.2.3 POSITIONING THE PRODUCT AND SERVICE............................................................................................................... 25
4.2.4 MARKET´S DEMAND ANALYSIS AND FORECAST ........................................................................................................ 25
4.3 MARKETING MIX DECISIONS: PRODUCT, PRICE, PROMOTION AND PLACE .............................................................. 26
4.3.1 PRODUCT ................................................................................................................................................................... 26
4.3.2 PRICE .......................................................................................................................................................................... 27
4.3.3 PROMOTION .............................................................................................................................................................. 27
4.3.4 PLACE ......................................................................................................................................................................... 29
, 1. INTRODUCTION
Lectures
Theory and concepts. Published in Aula Global after the class finishes. Read corresponding bibliography before class
takes place. (highly recommended)
Practice classes
Exercises, cases, mid-term exams; prepare and submit them before the corresponding class, indicated in Aula Global.
Exams
Mid-term tests and exams. There are 2 mid-term tests and 1 final exam.
Assesment
Final exam = 60%. Compulsory exam and achieve a minimum of 4 points over 10 to pass the course.
Continuous evaluation = 40%
- Activities = 20%
- 2 assessments = 20% (10% each)
Attendance
It is not compulsory to not come, but highly recommended. If not presented when case presentations and mid-term
tests, the points for each task are lost.
Bibliography
BJ Erasmus, JW Strydom, S Rudansky-Kloppers Introduction to Business Management., Cape Town: Oxford, 2013
Iborra, M., Dasí, A., Dolz, C., & Ferrer, C. Fundamentos de dirección de empresas, Conceptos y habilidades directivas
(2ª edición). Paraninfo, 2014
Maynar, P. La economía de la empresa en el espacio de educación superior, McGraw Hill. 2013
Schoell, W.F., Dessler, G., & Reinecke,J.A. Introduction to Business (7th Edition) Allyn and Bacon, 1993
-------------------
TO BUSINESS
Course 19405 – Bachelor´s in Management & Technology
Fernando Alfayate Fernandez
2022/2023
,Tabla de contenido
1. INTRODUCTION ......................................................................................................................................3
1. GENERAL CONCEPTS: BUSINESS AND ENTREPRENEUR..............................................................................4
1.1 INTRODUCTION ............................................................................................................................................................4
1.2 THE ENTERPRISE: CONCEPT AND MAIN ASPECTS ........................................................................................................4
1.3 THE ENTREPRENEUR .....................................................................................................................................................5
1.3.1 THE STRATEGY ..............................................................................................................................................................5
1.4 CLASSIFICATION AND TYPES OF ENTERPRISES .............................................................................................................6
1.5 BUSINESS OBJECTIVES ..................................................................................................................................................6
1.6 BUSINESS ENVIRONMENT ............................................................................................................................................6
1.6.1 SOLE PROPRIETORSHIP .................................................................................................................................................6
1.6.2 PARTNERSHIP................................................................................................................................................................7
1.6.3 CORPORATION ..............................................................................................................................................................7
1.6.4 SEPARATION OF OWNERSHIP AND CONTROL ..............................................................................................................7
1.6.5 COOPERATIVE ...............................................................................................................................................................8
1.7 OTHER FORMS OF BUSINESS OWNERSHIP ...................................................................................................................8
2. PRODUCTION .........................................................................................................................................9
2.1 THE PRODUCTION FUNCTION ......................................................................................................................................9
2.1.1 CONCEPT AND OBJECTIVES (página 318 y 319 - fundamentos dirección de empresas) .............................................9
2.2 TYPES OF PRODUCTION SYSTEMS (página 322 a 327 - fundamentos dirección de empresas) ...................................9
2.2.1 RIGID SYSTEM OF PRODUCTION...................................................................................................................................9
2.2.2 FLEXIBLE or INTERMITTENT SYSTEM OF PRODUCTION ............................................................................................. 10
2.2.3 JUST IN TIME PRODUCTION....................................................................................................................................... 10
2.2.4 PLANT LAYOUT (página 329 a -)................................................................................................................................ 11
2.2.5 PRODUCTION SYSTEMS vs PLANT LAYOUT ............................................................................................................... 12
2.3 PRODUCTION PLANNING AND CONTROL.................................................................................................................. 12
2.3.1 DECISION MAKING ON THE PRODUCTION SYSTEM .................................................................................................. 12
2.3.2 CONTROL OF EFFICIENCY........................................................................................................................................... 12
2.3.3 PRODUCTIVITY ........................................................................................................................................................... 13
2.3.4 COST ANALYSIS .......................................................................................................................................................... 13
2.3.5 MARGIN OF SAFETY ................................................................................................................................................... 13
2.3.6 OPERATING LEVERAGE (OL) (APALANCAMIENTO OPERATIVO) (+Gross Margin => +Leverage => +Risk) ................ 13
2.3.7 RELATIONSHIP BETWEEN BREAK-EVEN POINT AND OPERATING LEVERAGE............................................................ 14
2.3.8 CONCLUSION ON OPERATING LEVERAGE (OL) .......................................................................................................... 14
2.4 APPENDIX ON PRODUCTION PLANNING AND CONTROL .......................................................................................... 14
3. FINANCE (FINANCIAL FUNCTION) ..........................................................................................................15
3.1 INTRODUCTION. ECONOMIC & FINANCIAL STRUCTURE ........................................................................................... 15
3.2 INVESTMENT DECISIONS ........................................................................................................................................... 16
3.2.1 FINANCIAL MATHEMATICS ........................................................................................................................................ 16
3.2.2 CASH FLOW / INVESTMENT VARIABLES .................................................................................................................... 16
3.2.3 PAYBACK .................................................................................................................................................................... 16
3.2.4 NET PRESENT VALUE.................................................................................................................................................. 16
3.2.5 INTERNAL RATE OF RETURN ...................................................................................................................................... 17
3.2.6 NPV vs IRR .................................................................................................................................................................. 17
3.3 THE FINANCIAL STRUCTURE ...................................................................................................................................... 17
3.3.1 INTERNAL EQUITY: SELF FINANCING ......................................................................................................................... 18
3.3.2 EXTERNAL EQUITY: EQUITY CAPITAL & SHARES ........................................................................................................ 18
3.3.3 EXTERNAL EQUITY: EQUITY CAPITAL & SHARES ........................................................................................................ 18
3.3.4 LONG-TERM EXTERNAL RESOURCES ......................................................................................................................... 18
3.3.5 SHORT-TERM EXTERNAL RESOURCES........................................................................................................................ 19
3.3.6 FINANCIAL STRUCTURE AND ITS COST ...................................................................................................................... 19
3.4 ANALYSIS OF RETURN (ROA & ROE) AND FINANCIAL LEVERAGE .............................................................................. 19
, 3.4.1 PERFORMANCE ANALYSIS & LEVERAGE ANALYSIS .................................................................................................... 19
3.4.2 TERMINOLOGY & FORMULAS.................................................................................................................................... 19
3.4.3 ACCONTING INDICATORS .......................................................................................................................................... 20
3.4.4 RELATIONSHIP BETWEEN ROA & ROE ....................................................................................................................... 20
3.5 ANNEX – FINANCIAL STATEMENTS............................................................................................................................ 20
3.5.1 UNTANGLING THE COST OF ASSETS .......................................................................................................................... 20
3.5.2 RELATION WITH FINANCIAL STATEMENTS ................................................................................................................ 21
3.5.3 BALANCE STATEMENT – ASSETS................................................................................................................................ 21
3.5.4 BALANCE STATEMENT – LIABILITIES.......................................................................................................................... 22
3.5.5 BALANCE STATEMENT – EQUITY ............................................................................................................................... 22
3.5.6 PROFIT & LOSS ACCOUNTS ........................................................................................................................................ 22
4. MARKETING (COMMERCIAL FUNCTION) ................................................................................................ 23
4.1 ROLE OF MARKETING IN THE COMPANY................................................................................................................... 23
4.1.1 COMMERCIAL BEHAVIOUR ........................................................................................................................................ 23
4.1.2 MARKETING MANAGEMENT PROCESS ...................................................................................................................... 23
4.1.3 MARKETING CLAIMS TO KNOW................................................................................................................................. 24
4.2 MARKET SEGMENTATION AND POSITIONING OF THE PRODUCT ............................................................................. 24
4.2.1 MARKET SEGMENTATION CRITERIA .......................................................................................................................... 24
4.2.2 MARKET SEGMENTATION STRATEGIES ..................................................................................................................... 25
4.2.3 POSITIONING THE PRODUCT AND SERVICE............................................................................................................... 25
4.2.4 MARKET´S DEMAND ANALYSIS AND FORECAST ........................................................................................................ 25
4.3 MARKETING MIX DECISIONS: PRODUCT, PRICE, PROMOTION AND PLACE .............................................................. 26
4.3.1 PRODUCT ................................................................................................................................................................... 26
4.3.2 PRICE .......................................................................................................................................................................... 27
4.3.3 PROMOTION .............................................................................................................................................................. 27
4.3.4 PLACE ......................................................................................................................................................................... 29
, 1. INTRODUCTION
Lectures
Theory and concepts. Published in Aula Global after the class finishes. Read corresponding bibliography before class
takes place. (highly recommended)
Practice classes
Exercises, cases, mid-term exams; prepare and submit them before the corresponding class, indicated in Aula Global.
Exams
Mid-term tests and exams. There are 2 mid-term tests and 1 final exam.
Assesment
Final exam = 60%. Compulsory exam and achieve a minimum of 4 points over 10 to pass the course.
Continuous evaluation = 40%
- Activities = 20%
- 2 assessments = 20% (10% each)
Attendance
It is not compulsory to not come, but highly recommended. If not presented when case presentations and mid-term
tests, the points for each task are lost.
Bibliography
BJ Erasmus, JW Strydom, S Rudansky-Kloppers Introduction to Business Management., Cape Town: Oxford, 2013
Iborra, M., Dasí, A., Dolz, C., & Ferrer, C. Fundamentos de dirección de empresas, Conceptos y habilidades directivas
(2ª edición). Paraninfo, 2014
Maynar, P. La economía de la empresa en el espacio de educación superior, McGraw Hill. 2013
Schoell, W.F., Dessler, G., & Reinecke,J.A. Introduction to Business (7th Edition) Allyn and Bacon, 1993
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