When multiple groups of people act to achieve a certain purpose, the whole coordinator is necessary. Rather than moving each person apart, the person who controls the movement of each person by the instructor / coordinator increases the overall activity power. Likewise, management can be said to be an instructor / co-ordinator who efficiently conducts business activities throughout the company under the control of internal management resources (people, goods, money, information). However, in the start-up phase of the project, even when you feel the need for instructors and coordinators, what about when your business is in a regular business? Once the organization has been optimized, just repeat it and the instructor / coordinator will be unnecessary. However, businesses and organizations are not necessarily optimized. There are things that you can understand after the project actually progressed. Management always looks at the business and organization and has to ask whether the current state is the ideal state. It continues looking for problems, and as soon as it finds it, it solves the problem quickly, this is the role of management.
Another important thing in management is to keep changing plans. It may seem conflicting at first sight that you mentioned that "constantly improving to implement as planned" is the essence of management. Management must constantly monitor and improve the inside of the company organization while also constantly monitoring and adapting the external environment surrounding the company. External environment is economic situation, political / legal system, people's consciousness, technological innovation, competitors and so on. These are constantly changing. In recent years, the change has been steepening. If the external environment does not change, management can concentrate on what is inside the company, but managers need constant attention both within and outside the company if they keep changing.
The external environment keeps changing and never stops. In politics, regulations and law reforms will generate business opportunities and, on the contrary, work as negative factors. In the economy, the wave of the economy and raw material price trends are directly linked to the profit and loss of the company. In society's trends, changes in population composition, family composition, transportation network, environmental and energy problems, technological innovation, etc. will change product demand. Consumer needs are not fixed, booming and getting tired, are capricious. If competitors develop attractive new products or lower the price of existing products, they will immediately affect their products. Even if you are monitoring, managing and optimizing your business and organization firmly, there is a possibility that it may no longer be optimal due to changes in the external environment. There is also the possibility that the product being produced no longer matches consumer needs. Businesses and organizations must also keep their optimum state in response to the changes to the external environment.
For this reason, management must constantly obtain and analyze media reports, customers' voices, and statistical information, review the future forecasts, as well as grasp the internal situation and decide on countermeasures and continue practicing not. It is necessary to predict the future situation from various information and extract the tasks the company must deal with. Analysis is possible if excellent staff are near, but the final judgment of management change will depend on management.
Management is constantly required to monitor and optimize the business. It requires a means to monitor the business. It is important to always listen and listen carefully, such as sales performance, report on production results, cost statement and on-site opinion. If you keep doing what you are doing every day, you do not need to monitor the situation or plan for the future. The reason why business management is necessary is that it is always questioned whether it can be done in practice if it is actually decided by the plan or if it can be done in fact and it is reasonable in the changing external environment. Business management can be thought of as Plan-Do-see-Action. Whether you are a manufacturing enterprise, a sales business or a service industry, when making things, it is important to prepare a plan beforehand when offering. If you decide how much, how to make it, sell it or provide it, you can understand the quantity and combination of resources (people, goods, money) necessary for it, and can do it efficiently. This is Plan. And do, run.
From here it is even more important. Next is See. If planned and executed, it is necessary to examine whether it was carried out as planned. It is good if the method is as planned, including production and sales volume, but when the result is different from the plan, cause analysis is necessary. Was it difficult for the plan, whether the production / sales method had no problems, whether the demand forecast was inaccurate, etc. Analyze the cause, and deal with it so that similar things do not occur in the future. This is Action. We will improve production and sales methods by Action. Reflect the plan, review the Plan, review again Do-See-Action, then review the Plan again and repeat Do-See-Action. In the iterative process, the possibility of achieving the plan increases. By repeating the cycle of Plan-Do-See-Action, we can respond to changing business environment and improve business efficiency. Continue this Plan-Do-see-Action constantly, this is the basis of business management. First make a goal, plan, implement, examine, improve, re-plan and execute as a path to achieve the goal --- Repeat this and eventually achieve the initial management goal It is management to do this.
When organizing, management's work is (1) do not neglect external environmental analysis on a daily basis, (2) recognize management issues caused by changes in the external environment through internal environmental analysis, carry out business improvement, and continue to respond to changes in the external environment It is that. Even small things will improve greatly if we repeat improvement.
It is 5W1H that what kind of project is to be done, it becomes a clue. When - the business environment changes from moment to moment. Depending on the timing, it may become tailwind or reverse wind. Consumer preference trends, entry and exit of competitors, revision of laws and institutions and deregulation can be timing. Where - is the selection of business location. It is the selection of a place where it can produce at the lowest cost if it is a production base, or can provide the cheapest physical distribution cost to a consuming area. If it is a sales base, it is a place where you can offer products to the target consumers most effectively. What is - the range of products and services to offer. The range is the type of goods and price range. When doing multiple projects, the scope is determined by synergy effect and economic efficiency. To whom - target customers. How - how to do business. By choice of method, reduction of production cost and effective product appeal will be decided.
Thinking about manufacturing and providing hardware if it is a manufacturing industry, providing services if it is a service industry, but from the viewpoint of providing value to customers, think about it as three pillars of hardware, software, and services And good. (1) Hard - In the manufacturing industry, it is exactly the product itself. We will appeal to customers by performance, function, design etc. Even in the service industry, if you are a restaurant / retailer, you can provide value for meals and shopping in a good atmosphere with shops, interior decoration, product display and so on. (2) Soft - If it is a product, software and contents are exactly true if it is a digital product such as ease of use, supply goods, extensibility and so on. If it is a restaurant business, it is a provision menu, and if it is a retail business, it will bring out the appeal of the product. (3) Services - Information provision functions related to product purchase, customer service, after-sales service, digital products are information acquisition and renewal. Thinking about what value you can offer customers from three of hardware, software, and services, rather than one, we can create comprehensive customer value.
What is created in the project? In the manufacturing industry it is easy to think that offering things to customers. The customer certainly receives the item, but it is not the purpose of receiving it, but purchasing the item for the purpose of the benefit obtained from using the thing. Benefits received from products include not only the function / performance of products but also design, after-sales service, supply supplies, peripheral equipment, customer service, information and so on. Companies offer value to customers through goods and services. Let's see how values are added by corporate activities in the flow of manufacturing and sales.
Think about the manufacturing industry that produces industrial products from raw materials through processing and assembly and provides them to customers. In the process, value to customers will build up. This is called a value-added chain (value chain). Values = product function / performance + designability + price + advertisement publicity image + retail channel + product warranty when expressing the value accumulated at the stage when the product arrives at the customer. What consumers demand for industrial products is basically the function and performance that can be acquired with products. However, the appeal of the product is not limited to that alone. Purchasing is to own, so designs create the charm of ownership. Price is also a factor of purchasing decision. If the consumer does not know the product, the appeal of the product will not be transmitted. You can raise the value with an advertisement image. Even if you want to purchase, if you can not easily purchase, purchase may be abandoned. Having many dealers in close proximity to residential areas and office towns is more likely to be purchased. Consumers do not have all the information about goods. It may be bought on product reliability, manufacturer's reliability. Product warranty and after-sales service will also be valuation points at the time of purchase, which will be valuable to customers.
Ingredients + added value = final product, final product + sales function + after-sales service = business value. Rather than paying attention to the value of the final product, consider the sustainable value (value from the consumer's perspective) the consumer receives from the product.
Provided service content + sales function + after-sales service = customer value. Rather than paying attention to the value of the service provided, consider the sustainable value (value by consumer) that the consumer receives from the service.
In addition to product capabilities, product display, sales area design, building interior / exterior are also appealing points to customers. If it is a retail store, it becomes product + display + store + customer + after-sales service = value, or function / performance + knowledge + price + reliability = customer value. All these add together to add value, and the total value added determines the consumer's purchase decision and satisfaction.
In recent years, with the advent and development of digital consumer electronics, the value that consumers think is changing. In addition to the traditional value chain "product function / performance + designability + price + advertisement publicity image + retail channel + product warranty" in the digital home appliances, the initial digital home appliances are " Hardware main body + peripheral + software + application + content + (compatibility) + (penetration rate) + due to the development of digital home appliances "hardware main body + peripheral device + software + (compatibility) + (Extensibility) "as it is changing. In addition to digital consumer electronics, "after-sales service + value offered" is becoming important.
As we step through "What is a company," we get to the question of what the company is for. The company performs various business. Manufacture and sell goods, provide services to customers. However, manufacturing, sales, and service provisioning itself will only repeat the current business mechanically. Therefore, it is important to think back to the question of what is doing business on a daily basis for what purpose. What we would like to achieve ultimately through sustainable company activities, if clarified, we can understand the significance of our daily business, and planning our business and future direction will be visible depending on target setting. What I want to achieve ultimately through business activities, this is the management philosophy. The management philosophy makes it easier to establish the motivation of business, target setting, business plan. Sharing the management philosophy leads to motivation for employees' labor.
Depending on our management philosophy, we can set what kind of project to do and achievement goal. The management philosophy is the ultimate goal, but the immediate goal as an intermediate stage along the path is the management objective. By sharing management targets with employees, the goals of employees are determined. The basis of business management is to establish this management philosophy and management goal, to make it permeate to employees and to integrate the organization. By having an ideal figure and goal, we can recognize the difference from actual business situation and improve management. This is exactly management. To do business activities in anything, a goal is necessary. The goal setting not only clarifies the purpose of the project but also enables to concretize the plan, maintain motivation, and evaluate whether the goal has been achieved. Depending on the goal set somewhat higher, the company will grow to try to achieve it. It will be easier to plan if there are goals. Because it is a plan to show the path of achieving the goal. If you have a target, you can analyze why the target could not be achieved by comparing with the actual value, it will lead to more realistic goal reconfiguration, management task extraction and management improvement activities.
Management targets are consistently maintained from the time of company establishment, whereas management goals can change in different corporate conditions and external environments from time to time. While the medium term targets are set to 3 to 5 years, short term targets are set every year, the management philosophy indicates the long - term existence reasons and existence value of the company. In general, expressions that pursue abstracted ideals rather than management goals are chosen. It is not directly related to the company's business activities like the management goal, but the management philosophy is a goal of the management goal. By setting our management philosophy and spreading it to our employees, we can share the meaning of our company and the ultimate goal. Inside the company, it will lead to the company's sense of unity and motivation, which will lead to appeal of the significance of social existence, recognition of the company, improvement of company image outside the company.
The purpose of management is what is expressed in the management philosophy, but this is the ultimate thing, there is another thing that has been materialized. In management theory, maximization of corporate value, in other words, maximization of stock price is positioned as management objective. If one goal is taken into consideration, managers only have to consider one thing, making management decisions easier. But managers need to think more. For example, if you aim to maximize stock prices, you can increase the stock price by attracting the attractiveness of investors by increasing the amount of dividends you make out of your earnings. One step, increasing the dividend will reduce the amount of investment, which will affect future competitiveness. To attract investors' attractiveness, we tend to be interested in short-term performance, but if we view the company as sustainable, it is important to set goals from a long-term perspective.
If it is a company, except for those that were established as a timely organization from the beginning. It is an implicit premise to continue the business forever. It is so until at least the management philosophy is achieved. Stopping business activities is often when management gets stalemated and goes bankrupt. Companies have many stakeholders such as customers, business partners, employees and shareholders. Bankruptcy affects many stakeholders. To be able to continue business activities almost permanently, activities for that purpose are management. The conditions for becoming a going concern are (1) securing appropriate profits, (2) corporate growth, (3) awareness of corporate citizens (social responsibility, social contribution), (4) not losing entrepreneurial spirit It is four. If we do not keep securing profits, we will go bankrupt. Even if the environment surrounding the company changes slightly, such as economic trends, it is important to have a structure that keeps raising profits. One way to continue to secure profits is to constantly grow the company. Even if it can not grow as a result, efforts for that will lead to continuous profit securing. Awareness of being a corporate citizen will motivate business continuity. An entrepreneurial spirit is often lost when it is a mature company, although it is vigorous at the beginning of its founding. Having an entrepreneurial spirit, pursuing creativity, challenging innovation, and continuing to challenge risks is a driving force for corporate growth.
Management is an idea and not an action. Based on a sufficient amount of objective observation results, it is required to rationally solve the problem. To accurately grasp the realities of management, it is to take accurate daily data. Sales figures, quantity sold by goods, working hours, stocking, inventory etc. Next is observation. Observe and analyze the operation of work and lead to improvement of work. We visualize the work flow of office work and improve it to efficient work flow. Scientific management is important, not going for management. Formulation of management plan is the premise of scientific management.
Once the management goal is determined, the path to achieving that goal, that is the management plan. If you do not plan anything, you can not proceed smoothly. It can not be managed without a plan. Let's plan both the short-term plan (about one year) and the mid- to long-term plan (3-5 years). There is a mid- to long-term plan, and there is a short-term plan as an intermediate goal to achieve it. I do not know what will happen in the future. The external environment will continue to change. Even now, let's think about both the normal case and the worst case, not planning with optimistic outlook. About the case that can be assumed, what is planned on that assumption is called a contingency plan. Even with a plan once set up, if the external environment changes dramatically, we will adapt to environmental change by constant review of the plan. For short-term plans, let's add numerical targets (sales, profits, etc.) for performance as annual goals.
Management tasks are the gap between goals / plans and the current situation. The task extraction is done at the management level, the management level, and the business level respectively. Analysis of the settlement statement is common for extracting management issues, but the information on the documents is not enough. Living information is also necessary. At the management level, we get information from management interview. It would be even better if you can interview from middle managers and regular employees. Information is papers, interviews, and observations. Observe frequently, go to the scene and observe carefully. Problems may not be visible in materials, interviews, observations. Sometimes it is easier to establish a hypothesis, so to speak, a temporary task, to verify that it applies to the facts. Starting from a simple clear hypothesis, it is conditional that it is observable, refutable hypothesis, and can be verified in a simple way.
No matter what business you are doing, there are competing companies unless you are a monopolist. If only our company exists, we only have to think about ourselves, but we must also consider the behavior and impact of competing companies for the existence of competing companies. Taking all of the market, competitors and customers into account and deciding the action is a strategy. Formulation of strategy is a core part of management. Strategy is to properly and quickly respond to the changing external environment while taking into consideration the competition with competitors, and to acquire new business opportunities. The strategy can be a management goal as it is.
What the company is going to do, this is also an important question to consider. The business domain is called a domain. Regarding the current business domain, it is necessary to constantly evaluate and review it, but in addition to that, we must also plan for future directions. We will promote selection and concentration by reducing the number of contracts by reorganizing our business and expanding to new businesses to ensure sustainable earnings. There are three main methods of selection and concentration. First of all, it is confirmation of the current domain's position. It maps to two-dimensional coordinates. Write a value-added column as a value chain on the vertical axis. Beginning from the raw material in the direction from the top to the bottom, the materials, devices, parts, productization by assembly processing, software creation, sales, service, etc. are positioned. It is also called upstream process, downstream process, upstream, downstream. Positioning where our company is positioned in vertical position within it. The horizontal axis shows the product group handled by the company. Place the core business on the left and order products closer to it. From left to right we will line up from core business to peripheral business. On the right side of the line, we will arrange products that our company does not currently deal with, but technically could use our own technology. Then you can recognize the business area, the position on 2 dimensions and the size (the product group's scratching). Position and size will be examined from the viewpoint of the management resources of the company and the environment surrounding the company and appropriate strategy will be established. There are two ways to review the business area, narrowing down by selection and concentration, and expanding the area by diversifying.
It is important to constantly review the domain (business domain). The external business environment and internal management resources will change. The business domain that adapts to the external environment, commensurate with the company's management resources, will also continue to change. Selection and concentration is aimed at improving competitiveness by concentrated investment of management resources in areas with high resource input efficiency, diversification is an expectation for synergy effects by diversification of business, pursuit of scope of economy, reduction of business risk Is a merit. Analysis of the current business area is the first step in formulating the strategy. We write out all our business and evaluate each one from the viewpoint of sales scale, competitiveness, profit margin, future potential and life cycle, and select or investigate new business.
I want to aim also that, any effort is needed to grow a company among competitors. However, due to limited time and management resources, it can end up being incomplete. It is the secret to succeed by analyzing your company's characteristics and future direction and concentrating on one of the strategies. In order to continue and develop the business on the basis of limited management resources and the existence of competitors, it is practically necessary method to concentrate focusing on one method. As a result, what do you emphasize on sales, profits, share, etc? As the direction of the company, which one places importance on growth potential and stability of the company? In addition, it is a luxury goods with brand power as offering goods, mass sales by inexpensive goods, which is more important. As a result, product lineup, pricing, advertisement, shop design will also be decided. Among various market approach approaches, which one places emphasis on strategy is meant. Since the business resources (human, goods, money, information) that a company can use are limited, and the execution time of a strategy is finite, choosing which strategy to select and what strategy to not execute is required for management It is to be done.
When a company makes a goal, ideally it is normal to think that you want to raise both sales and profits. However, if it is assumed that multiple companies are competing in the market, you may not be able to extend the other unless sacrificing either sales or profits. For example, it is a case that prices are lowered in order to increase sales, that profits are sacrificed by that amount, and conversely if we focus on only profitable businesses that pursue profits, we can reduce the scale of our business. For the sales and share expansion strategy, it is not the ultimate goal to simply increase sales. By increasing sales, if consumer awareness increases and brand power is added, high profitability will be possible with time lag. Also, as sales increase, the "economic effect of scale" will lower production costs and increase revenues.
On the other hand, the profit expansion strategy aims for stable high profitability rather than making the expansion of business scale the top priority. In order to expand the company's survival, it is a condition to keep profits steadily rising. In the profit expansion strategy, it is necessary to continuously review efforts to review the scope of business, maintain prices, and reduce production costs. We prioritize profit maximization, and we will judge business domain, sales, share, price etc.
In the new product development strategy, we aim to introduce new products to existing markets, replace customers and develop new customers. Simply thinking and introducing new products is likely to increase sales, but do not consider carefully considering that it takes a lot of development cost, that existing products will not sell and uncertain whether new products can be sold or not I will fail. The new market development strategy is an attempt to expand the customer base by introducing products that can be commercialized by existing products or proprietary technology rather than new products to a market different from the past. It is to arrange products for young people into products for middle-aged and elderly people to improve products that were for men and to be introduced as products for women. The new market development strategy is a way to make use of existing in-house technology, and it can be said that it is an easy-to-work strategy. By analyzing existing products and technologies and adding some new ideas, we can acquire new customers.
These are the defense strategies that aim to secure a certain share by conscious of competitors and other potential companies. Even if your business succeeds and your sales and profits are secured by your own ideas and efforts, there is a possibility that other companies imitate it and enter. If so, sales and profits may not be maintained. To make businesses that other companies can not imitate easily, this is a barrier formation strategy for entry. Pricing that other companies can not set is one of entry barriers. If the quality of goods are similar, the consumer will choose the cheaper one, but companies that are planning to enter will hesitate to enter if they are not confident that you can set cheaper prices than existing companies. In this case, existing firms are confident that they will win with price competition (price cut competition), even if they try to enter at a cheaper price, if enterprises thinking about to win will enter I hesitate. Even if a competitor already exists in the market, in a market competing with similar products, the strategy of taking leadership at price, that is, low pricing is sufficiently competitive. However, it is inevitable that cost reduction efforts within the company are necessary, resulting in a decline in profit. On the other hand, in markets competing with diversified products, it is not a simple price competition, it is possible to divide living with goods of low price constant quality and high price and high quality.
In markets competing with similar products, it tends to be simple price competition. Differentiation from other companies is a way to prevent profit decline due to simple price competition. Differentiation will narrow down the target customer base, which will increase appeal to target customers, but the customer base itself will be smaller. It is a strategy aimed at profit rather than sales. There is a possibility that sales of general-purpose goods will increase greatly if you take a share, but there is also the possibility that the profits are not profitable due to competition. Differentiation strategy can be said to be a strategy that emphasizes stability and profit rather than sales possibility.
It is a strategy to further differentiate, further narrow down the customer target, and strongly appeal to a small number of customers. The niche market means a gap market, which targets an undeveloped market that other companies are not working on, usually a very small market. The advantage of subdividing the market is that it is strongly appealing to a small number of customers, that it targets customers who place high value, so that it is easy to set high prices, and in a segmented market there will be no competitors. On the other hand, the market size itself is small as a problem, so sales can not be hoped for. In general, large enterprises have facilities of mass production, and there is superiority in business utilizing scale economy. Therefore, niche strategies and market segmentation are strategies that SMEs choose not to handle big companies. Since there is competition among small and medium enterprises, it is necessary to fully consider subdivision and market size (number of potential customers).
Horizontal diversification is a strategy to expand the product group and expand business without changing the position of the value chain. Expansion of product groups does not necessarily increase sales and profits. Expansion of the product group benefits when the range economy can be utilized. In the case that the technology already owned by the company can be easily transferred to other products, if products that are appealing to other customers than their existing products can be created by their own existing technology, existing products and existing products Synergy effect is born, and it is when you can expect a positive effect on existing products. On the contrary, when such a thing can not be expected sufficiently, it is better to concentrate management resources by selecting and concentrating rather than merely dispersing energy of limited management resources even if the number of products is increased In many cases it can be said.
Vertical diversification is a strategy of expanding the scope of our company to upstream and downstream in the value chain. For example, if the assembly process is an existing area of the company, it will be expanded to the production of parts, consistently from parts to final product, or not only manufacturing but also sales and after-sales service. It is also called vertical integration. The advantage of vertical diversification is that by incorporating many parts of the value chain into our company it is no longer necessary to negotiate price and quality with parts companies and sales companies that have occurred. Vertical integration that consistently undertakes contracts from material and parts production to manufacturing and sales services can broaden the scope of the company and can achieve overall optimization within a wide range. However, it is also a prerequisite that production cost, attractive product development etc. can be expected sufficiently through overall optimization. Those who purchase from other companies than manufacturing parts themselves may be superior in terms of cost and adaptability to changes in demand. If you leave it to a professional dealer with know-how, sales will be commissioned to other companies, and in cases where specialization in product planning development can expect profits, there are many.
Unlike diversification, focusing strategies, shrinking strategies, and strategy withdrawal strategies are narrowing down the business areas by selection and concentration. By concentrating on our business, we concentrate our limited management resources on our specialty areas. If the business area expands, there will be disparities between businesses among those among them, those that are not good at their company, those that will benefit, others that are not. By forecasting future trends through business analysis, we will select businesses to be continued, expanding businesses, businesses to be reduced, and review business areas. Shrinking down, organizing If we say withdrawal, we tend to think that it is a movement opposite to the company's growth, but rather as a process for future growth. If the company grows, it will come with the meat. Sometimes shaping up and making the company muscular is necessary for further growth.
To do business, you must first know yourself. Human resources, physical assets, financial strength, etc. of our company are called human, goods and money, and are the basic elements of management resources. Human beings tend to pay attention to the number of workers and amount of fixed assets, but the important one is quality. Effective manpower will differ depending on the expertise, skills and sales know-how of human resources. We must constantly grasp the level of skills of our employees and improve their skills through education and training. It is a good idea to measure labor productivity (added value / number of workers) for each business.
Mono (fixed asset) is not the acquisition price, but we will pay attention to the value produced by the asset how much the asset is being used in the company's business. Production capacity of the latest equipment is higher than that of the old equipment, and there is the case that the production capacity is not available for the aged equipment as it requires maintenance cost. We measure capital productivity (added value / fixed asset amount) for each business and grasp the true power of the equipment.
With regard to money, we can calculate the soundness, efficiency, profitability etc of management by financial analysis. The financial indicators can be evaluated relative to the past by comparison with the past, comparison with other companies, and comparison with management indicators. We also pay attention to equity capital and debt, retained earnings and cash on hand. These regulate the money that companies can freely use, and they will be funds necessary for implementation and review of management strategies, such as implementation of new business and capital investment. Funding margins are directly linked to the possibility of utilizing funds. Though these are shapes (they can be confirmed by the eyes), in recent years the importance of intangible assets (technical strength, information power, sales force, recognition, reputation, management know-how, etc.) is getting higher. Intangible assets can not be recognized visually, so it may be underestimated, overestimated, compared with people, goods and money, although the usage law may not be clear, it is an important management resource that determines performance.
The management resources mainly target internal resources, but we also need to grasp the external resources. If the partner company has high technical capabilities, high sales force, it can be utilized as it is. The same is true for the parent company and subsidiaries. Once you can grasp the management resources, consider the direction of your company and strategy, think about the optimal resource composition. Humans, goods, money, etc. There is nothing more than to have sufficient resources, but there are usually limited. In order to increase the resources it will cost accordingly. Therefore, rather than increasing the absolute amount of resources, by optimally allocating it, improving the comprehensive power of people, goods, money and so on. Once you grasp the company's management resources, it analyzes whether it is a company's strength or weakness compared with other companies and organizes it into a table like the following.
| Strengths | technical strength, quality control, manufacturing know-how |
| Weakness | sales channels, new customer development, funds |
External management resource analysis is to analyze and grasp the external environment surrounding enterprises. Companies use management resources such as people, goods, money and information, purchase them from outside the company and sell them to the outside. We also procure management resources from the outside. Management resources are affected by labor market, interest rate trends, trends in capital goods market, purchasing is affected by raw material market and sales are influenced by economic trend. If competitors are in their markets, pricing of other competitors' products and technical level will affect their sales. Although these are direct impacts, the trend of the industry as a whole, technological innovation, strengthening and mitigating regulations of the administration, demographic changes and others will also be affected.
The important thing is the accurate grasp of the changes that are currently occurring and the accurate prediction of the direction of change in the future. It takes time to formulate a management plan, invest in it, sell products and collect funds. Meanwhile, the external environment changes. Regarding internal management resources, although it can be controlled by ourselves to some extent, it is difficult to control the external environment. It only has to adapt to future changes in the external environment. For this reason, accurate prediction is required. Items to be checked as external environments are demographics, macroeconomic indicators (economy, corporate performance, prices, interest rates, economic policies), industry trends (industry trends, technology levels, regulations), consumer trends, society, trends, etc. is. Once you understand the external environment, organize it as shown in the table below to see if it is an opportunity for your company or a threat.
| Opportunity | Threat |
| Expansion of overseas market, deregulation | Inflow of overseas products, entry of other companies |
SWOT analysis analyzes our company's position from four perspectives: Strongness, Weakness, Opportunity, Threat. We will clarify our company's strength (Strongness) and weakness (Weakness) from internal management resources analysis, further strengthening the strengths and weaknesses, we will consider strategies to reinforce weak points. To compare the competitiveness with other companies, it is easy to grasp the relative positional relationship by extracting strengths and weaknesses. Whether to further strengthen the strength or to reinforce weaknesses as the top priority depends on each way of thinking. In addition, as external environmental analysis, we will also grasp the external environment to be an opportunity (Opportunity) and the external environment to become a threat. By combining internal resource analysis (company's strengths and weaknesses) with external environmental analysis (opportunity, threat) results, we grasp the position of our company and extract management issues.
| Opportunity | Threat | |
| Strength | We take opportunities as opportunities and make the most of our strengths. | Minimize the threat by strength. |
| Weakness | Overcome the weakness to take advantage of opportunities. | Overcome the weakness to endure the threat. |
In the manufacturing industry, you can capture the business in time series of purchase - processing - shipping - sales - after-sales service. Processing raw materials as finished goods and selling them to consumers and profit is because the final product has higher value (added value) for consumers than raw materials. This added value improvement process has been gradually accumulated in each process of purchase - processing - shipping - sales - after-sales service. Besides the manufacturing industry, added value is created in the process of purchasing and selling goods in the case of retailing, in the service industry, in the process of procuring people and goods and providing services using their management resources. In each case, the added value is the value obtained by subtracting the cost used for the production of goods and services from the value sold, and it becomes the company's share. The greater the difference between the value sold and the production cost, the more profit the company will have. It is the valu - chain that focuses on sales, selling value to customers. The greater the value you provide to customers, the more sales and profit your company will have.
Let's take the manufacturing industry as an example. In the manufacturing industry, we procure parts and materials first. If you resell it as it is, the resale price is almost the same as the procurement amount. However, if the company goes through a manufacturing process and becomes a product, the sales amount will be larger than the procurement amount. It is because the value of the product is higher than the value of raw materials. Product enhancement will further enhance value. Even if the products are the same, you can further increase the value with the product selling method, by product after-sales service, by the brand image of the product's advertisement and promotion, with the accessory to be combined with the product. Valu - Chain is based on the idea of linking with a chain, not only one aspect but also all of our corporate activities, we will build up the value improvement way of raising the value of the product.
In modeling business, we express the relationship between our company and external environment as five strengths working from outside to our company. The five forces are: (1) competitiveness with competitors, (2) bargaining power with the seller (supplier), (3) negotiation power with the buyer (seller), (4) the threat of potential entry (height of entry barriers), Competitiveness with alternative markets is five. Due to the strength of these five forces between our company and the external environment, we have the power to be unaffected by the external environment, or it will be influenced by the external environment and become disadvantageous. By analyzing the five power relationships, we are required to identify and strengthen our weak parts.
If competitors are producing similar products, it is easier to understand where they are similar and where they are different by drawing a positioning map. Plot the in-house products and other company's products on the vertical and horizontal axes with the two characteristics of the product in (x, y) coordinates from the two product characteristics. The closer the plotted position of the product is, the stronger the degree of competition is. Since the degree of competition is low if the plotted position is far, it can be judged that there is little influence from other companies' products.
This is to grasp the position of products in the market environment and make it easy to distribute business resources to which products. The product is positioned on two scales of market growth and market share. The table is as follows. In this figure, we can see the competitiveness and future prospects of our products in the market, and we can read which product areas we will allocate management resources in the future.
| High competitiveness (high share) | Low competitiveness (low share) | |
| High growth | A product | B product |
| Low growth | C product | D item |
It is one method for strategy formulation. In order to expand sales to boost sales and profits, we focused on products and markets and expressed them in a two-dimensional matrix and visually organized them. To expand the business, we think about broadening the range of products and expanding the scope of our customers from two major viewpoints. With regard to products, customers' decision to strengthen sales of existing products or to develop and introduce new products, customers will further appeal to existing customers and lead to sales, develop new customers, increase the number of customers and lead to sales There is a judgment. If there is a judgment as to whether the product and customer are existing products, existing customers, new products, new customers, there are four combinations. For these four patterns, the Anzov model is a matrix of possible strategies for each case. By thinking in four combinations, it is a tool to think about a more optimized strategy rather than thinking about expanding strategies from only the product or customer's point of view.
| Existing market / Existing customer | New market / New customer | |
| Existing product | ||
| New product |
For company analysis, you can visually understand by graphing the numerical figures (figures such as sales, profits, share, growth rate etc.) in management. Intuition is also easy to work. Extract two keywords, graph one on the horizontal axis and the other on the vertical axis. For example, mapping its own products by plotting profitability on the horizontal axis and market growth rate on the vertical axis. At this time, if you just compare and compare the comparison data as well as just graph the data, the analysis becomes easy to understand. By comparison, you can intuitively understand that it got larger or smaller. Comparisons are comparison with the past, comparison with competitors, comparison with industry standards, etc.
Utilizing external resources can compensate for the shortage of internal management resources. Advantages of outsourcing a part of the business are as follows: (1) In the event that there is a change in the scale or content of the project, it is possible to make the amount and content of outsourcing depending on the change, (2) outsourcing accounting Cost reduction can be made according to the scale of the business even if there is unexpected business shrinkage, (3) In the case of conducting a new business, cost of launch (new investment etc.) will be required but outsourcing It is advantageous in terms of speed, cost and technical power. On the other hand, disadvantages include (1) the business is affected by the circumstances of outsourcing parties, (2) management resources (human resources, equipment, technology) do not accumulate in the company, (3) In some cases, there are options to outsource the company's own business (in-house production).
Extract management issues through various management analysis and formulate strategies to solve problems. The process of formulating the strategy is organized as follows.
In the PDCA cycle, plan, execute, evaluate, and review the plan again. By repeating these four steps, we can adapt to the changing external environment and optimally utilize internal management resources. The first step "Planning" is as follows. Business plan - It is a plan of steady business activities. Plan the transition of management resources and working capital necessary for daily business. Investment plan - Plan investment based on management strategy. Investment fund procurement plan, investment effect, investment recovery method, analysis of investment risk factors and formulation of countermeasures. Profit plan - It is a plan of profit by regular operation, investment. We estimate the profit from sales forecast, fixed cost, variable cost etc etc or estimate the sales scale and business scale necessary for raising certain profit. Funding plan - We will plan working capital, investment funds and collection funds in terms of financing, expenditure, and cash collection. New business plan - We plan new business based on management strategy. New product development plan - We will plan new product development based on management strategy. Existing Business Improvement Plan - Although planning tends to focus on "new things" such as investment, new business, and new product development, analyze existing businesses, extract problems and tasks, and make improvements on a steady basis It is important. It is a plan to extract items to be improved and to conduct improvement activities gradually at a stroke and sometimes in a certain plan for each. Production planning, personnel planning, sales planning - business requires resources. For the optimal placement and introduction of management resources, a plan that forecasts a certain period is necessary.
After planning and running, it will be evaluated. In the evaluation of the project, we look at the profitability, sales, and financial strength of each business, and we measure the contribution of each company to the company. The point of evaluation is grasping and analyzing the difference between plan and actual. If it is less than planned or could not be planned, we must find out the cause. The next step is to explore the cause and to solve the problem by solving the problem if there is a problem. Meanwhile, the plan was too much, there is a possibility that it was inaccurate. We will verify that the plan was valid and if not, we will revise the plan. In the project evaluation, it is easy to see the results of financial figures, but re-recognition of the positioning of the business is one of the evaluations. Reaffirming the product position of its products, reaffirming its customer base, and reconfirming distribution channels. It is one of the evaluations to reconfirm / modify the future forecast from the current project evaluation. It is awareness of growth potential (market size, competitiveness) and future growth factors.
Business involves risks. Risks include (1) sharp decrease in sales due to sudden change in economic environment, (2) accident at business, (3) natural disaster, (4) sudden change in foreign political economy / safety. Risk management is to prevent the occurrence of risk (preventive management) and to minimize its impact on the risks that have occurred (risk countermeasure management). List possible risk factors, organize their frequency of occurrence, the degree of impact when it occurs, and how to cope after occurrence in the risk analysis table.
| Risk factors | Occurrence probability | Influence on occurrence | Preventive measure for occurrence |
| A | |||
| B |
When introducing a computer system to a company and making information into information, there are various merits. Information processing targets are accounting processing, personnel management (organization, duty, salary), purchasing / purchasing, sales management (sales, profit) and so on. By informationization, the tasks that had been conventionally done by hands are automated, labor costs can be reduced, labor force which has afforded can be converted to another work and relocation of labor input can be done. By automating the manufacturing process, the same effect can be obtained. The first effect is cost reduction. In addition, because it can process a large amount of data accurately, business speed will also increase by expanding business, reducing customer complaints, and reducing processing again. Since information is stored electronically, it is easy to store and access business data. By statistical calculation and graphing of accumulated primary data, we can automatically grasp the performance, formulate management strategy and prepare financial statements. By linking with external systems, we can improve the efficiency of purchasing and sales operations, and speed up. Although it can be said that the effect of informationization is great like this, it is the result when we try to make appropriate information suitable for each company. Otherwise, it is not always possible to obtain an effect commensurate with the investment. There is something necessary for informationalization that is useful for management, commensurate with investment.
The work of the company is generally composed of purchasing, manufacturing, sales, accounting, personnel, etc. For each business,
etc. are conceivable. What makes it easy to inform the information is routine tasks, aiming to optimize routine tasks with the introduction of information. The point is how far we will incorporate non-routine tasks into the information system. Instead of systematizing on the premise of the current work, it is to systemize after formulating what the business should be based on the business model, and to reform and improve the operations and organization accordingly.
We will analyze the current situation of work. The check points are as follows.
There are qualitative and quantitative effects in the effect of informationization. As a qualitative effect, it is when informationization itself is establishing a competitive advantage. Daily sales, purchasing data, financial data, etc. are useful for decision making. Data collection and analysis will improve management planning and management prediction accuracy. With the collection of management information, management control abilities are improved. Sharing data in the company, utilizing e-mail, announcement will improve communication within the organization. Meanwhile, as a quantitative effect, by mechanizing work, processing time is shortened and productivity is improved. At the same time, we can reduce personnel and reduce costs.
For informationalization, creating a framework to promote it is the first step. The point is a combination of top down by top management involvement and bottom up of informationization through business improvement. As a planning system, appoint a director in charge of information (CIO) and make it a core unit of responsible implementation of reflection of management intention, consistency with management plan, responsible execution of plan by project system with CIO as the top. It is necessary to redefine the work which is the prerequisite for the informationization and improve the business. To do so, we will proceed with the cooperation and participation of internal divisions under company-wide approval.
To proceed with informationization, it will not function unless it is consistent with the company's strategy, organization and culture. It shows the procedure of informationization. Based on the preliminary survey, we will formulate an informationization plan and steadily advance information informa- tion based on the plan.
Here is a configuration example of an information plan.
The points of information planning are as follows.
We will confirm by the system audit whether the information system is functioning normally. Audit items are accuracy, effectiveness, productivity, flexibility, safety, reliability, confidentiality.
Introduction of information systems is capital investment, and it is necessary to verify the investment effect. Evaluation is a material for modifying, reviewing, and expanding the system, and planning future informationization plans. The evaluation items are (1) contribution to the management strategy, (2) conformity with the organization, (3) economic efficiency, (4) compatibility with information technology trends, and (5) utilization of information resources (information, hardware, software, human resources). Evaluation includes quantitative evaluation and qualitative evaluation. Quantitative evaluation is cost reduction, sales increase, number of people reduction, service increase amount, working time reduction amount, etc. Qualitative evaluation is the improvement of corporate image, improvement of service, improvement of morale of employees. Qualitative evaluation tends to be neglected because it is difficult to quantify, but it is an important item. We will carry out in a form that ensures objectivity. If we can measure the effect of introduction, we will do a cost-benefit analysis as to whether it is commensurate with the investment amount.
There are corporations, corporations, limited companies, joint-stock companies, partnership companies, etc. in the forms of companies. Co., Ltd. is characterized by limited liability, disclosure of financial statements, securitization of capital. Usually, the company is a corporation. Shareholders will be the owner of the company, but management practices may be carried out by a manager other than the shareholders. There are many smaller companies in general than smaller companies, but the limited part is the same. It is unnecessary to disclose financial statements and securitize capital. The joint-stock company is a limited organizational structure that is more limited than the limited company, although it is limited to the organization established by the investor. A joint company will have unlimited liability for investors.
Definition of small business is defined as capital less than 100 million yen or less than 300 employees (excluding retail and service business), capital less than 10 million yen or less than 50 employees (retail and service industry) I will. Small and medium-sized enterprises account for over 99% of all Japanese corporations and over 70% of all Japanese employers. In the company's name recognition, I am defeated by large companies, but small businesses support the Japanese economy.
What characteristics do SMEs have when comparing with large enterprises of SMEs? Small and medium-sized enterprises' strengths include exertion of identity, mobility, prompt decision making and implementation, and close contact with the community. Meanwhile, the weakness of small and medium-sized enterprises is personal color, dependence on family labor, low social credibility, subcontracting position, difficulty in securing human resources.
In order for small and medium-sized enterprises with such characteristics to further exploit their strengths and overcome weaknesses, through the alliance and exchange of different industries in the region, development and provision of new products and services different from the idea of a large company You will be asked. Quick decision making and identity, which is a merit of small and medium enterprises, will help. The weakness of SMEs is that there are restrictions on the management resources of people, goods and money. We will secure competitive advantage by market segmentation and centralization strategy. It is important to ensure that the price does not compete with competitive prices. In personal management, training of successors is also an issue.
Compared with Western companies, it is said that Japanese companies have characteristics. This is called Japanese management. Listing several specific corporate customs in Japan, (1) Employee recruitment at the time of school graduation and employee education, (2) lifetime employment, promotion / salary by seniority-based arrangement, (3) emphasis on employee welfare, such as company welfare expenses, (4) population Decision-making decision (bottom-up, approval system, unanimous) and unclear responsibility and authority, (5) enterprise union, (6) indirect financial center, main banking system, stockholdings etc. These are the strengths of Japanese companies on the international economy and at the same time become economic inefficiencies and weaknesses (growth limits), which are closely related to European and American companies that are trying to enter the Japanese market It may be interpreted. Climate that avoids risk, the rigidity of corporate culture, the top can not grasp the site, enlargement of management department, Japanese management can demonstrate its strengths and at the same time it may be a management problem itself.
In the definition by the management document, an organization is a group in which multiple people define roles and collaborate, in order to achieve a certain purpose. As conditions for establishing the organization, (1) there is a common purpose, (2) good communication, (3) willingness to contribute. In order for the organization to function, it is necessary to: (1) the principle of management, (2) principle of division of labor, (3) principle of integration of authority / responsibility, (4) principle of unity of command and command, (5) principle of recognition and sharing of targets, In principle, organizing in accordance with the scope of control and grouping principle is necessary.
If the internal management resources and the external environment of management change, the optimal organizational form will also change according to that change. Mechanical organization has advantages in a simple form but it does not match the change and it becomes an inefficient organization. Organic organization is an organization that can respond flexibly to change without being rigid organization. Organization will change if environment changes.
Companies have a long history from the past, unless they are venture businesses just before their birth. In this long period of time, values and behavior styles that penetrate the organization and are shared unconsciously are fostered. This is a corporate culture. As individuals have colors, companies also have color. Just because a company culture (organization culture) is unconscious and invisible, I can not disregard it. Unconsciously shared values and behavior styles are literally unconscious, unlike the rules and management policies that are clearly stated, so it tends to become a management barrier without knowing it. Normally, this is a fixed idea of common sense and it may not be able to adapt well to the changing external environment. It is important to grasp this invisible corporate climate and be aware of it from the usual day that it is not an impediment to management. The corporate culture tends to be formed by experience accumulation and successful experience. Accumulating experiences and successful experiences are confident in employees and organizations, while at the same time creating a rigid way of thinking.
An organization is a group of individuals, and the ability of individuals determines the ability of an organization, but by learning it can raise the individual's ability and enhance the organization's ability as an aggregate. First of all, it is education and training for employees. Education drills corresponding to their duties are required for each job type and level. Education and training for new employees is common in all companies, but education and training for employees with a certain number of years of work, mid-career employees in managerial positions, management positions, etc. are weak. Education and training at each stage is required from new employees to mid-level employees and management positions rather than just once for new recruits. As business resources and external environments continue to change, knowledge other than regular jobs will become necessary in the future.
We will learn not only individuals but also organizations. Work is done in an organization. With daily work, the organization accumulates information, trial and error action (organization learning) is accumulated. Next, when doing similar tasks, you can make use of the knowledge gained from past experience and carry out it more efficiently. With the knowledge gained from experience, we review the work, review the work with the knowledge obtained as a result, and repeat this. With this, productivity can be continuously improved. The property that productivity also improves as the cumulative amount of work and the cumulative amount of production increase increases is called the experience curve effect. Conversely, in order to obtain the empirical curve effect, it is necessary to review the work without fail with knowledge obtained from experience. We clarify the problems of work and share it throughout the organization, analyze the problem solving, and review the work. It is to manage the organization to repeat this constantly. If the business is progressing well, analyze the success factor, if not, analyze the failure result to analyze the result of the analysis. The thing to watch out for is not only formal intelligence that is easy to explicitly state but also tacit knowledge that is not clearly documented so that you can extract knowledge and accumulate it in the organization. It is possible to have the ability (organizational capability) more than the aggregate of individuals in organization and management of the organization.
Functional departments Organizations are the most common form of organizations that divide themselves by job type like the general affairs department, accounting department, purchasing department, production department, sales department. Organization division organization creates organizations such as Semiconductor Business Division, Home Appliances Business Division, Communication Equipment Division, and within each division, functional department such as General Affairs Department, Accounting Department, Purchasing Department, Production Department, Sales Department Hanging it, so to speak, each division is a company organization. There are many patterns in large companies. The feature of the business division system is that the business department becomes a unit of profit responsibility, calculate sales and profits for each division, and evaluate performance. For large enterprises, it can be said to be an organizational structure to prevent large enterprise illness due to organizational enlargement. If the division organization system sees vertical division by product and organization by function division as horizontal division by job type, it is the matrix organization that combines so as to eliminate the hindrance of vertical division and horizontal division. Matrix organizations are vertically divided organizations for each product, but functional organization within vertical division (general affairs department, accounting department, etc.) is also connected by sideways connection. Although it has functions of both vertical and horizontal division, there are problems such as the organization becoming too complicated, command and command system being unclear. From the morphological view of the organizational structure, it is the strategy business unit's philosophy to stipulate the structure of the organization as a management unit of the management strategy. We have organized an organization that carries out it according to the planned strategy so that the implementation status of the strategy can be grasped by organizational unit.
When you look at organizations in finer units, you can classify them into three types. Line organization forms a line with a combination of superiors and subordinates. It is an advantage that the command and command system is unified, the authority and responsibility are clear. Although it is a traditional style, there are points to point out that flexibility to adapt to the environment is lacking in the environment of rapidly changing modern times. Functional organizations divide the functions of the company into several, each working as a specialized organization based on task sharing. Relationships between organizations are flat and closely related to work or relationships become thinner. The line and staff organization arranges staff who conduct professional duties to the traditional line structure and makes it correspond to both regular work and advanced professional work. In recent years, operations have become complicated and sophisticated. Compared to the era when stationary operations were central, strengthening of staff division responsible for specialized work has become required.
The basic principles of human resources management in designing management organizations are as follows.
Think of the company's work as a combination of several sub-tasks, building departments that specialize in each sub-task, which is common in organizational design.
It is a principle to correspond the magnitude of authority to the magnitude of responsibility. The department in charge of a certain task is granted the authority and responsibility of business execution. It is an implicit comprehension that the department in charge has authority and responsibility in the field of responsibility, but it is an implicit comprehension matter, but important things are to clarify the matter clearly and check it inside the company and, in practice, It is to be protected. In the case of traditional line type organization it is less likely to be a problem, but in recent years the organizational structure has become complicated as a matrix type organization, a line staff type organization, when confusion happens, etc. when irregular work occurs It is easy. It is necessary to clarify the location of command order system, authority and responsibility in response to unforeseen circumstances, such as unsteady tasks, sudden situations, sudden change of external environment, and internal sharing.
If instructions and instructions come down from two places, the site will be confused. When irregular work occurs, confusion is likely to occur. It is necessary to clarify the location of command order system, authority and responsibility in response to unforeseen circumstances, such as unsteady tasks, sudden situations, sudden change of external environment, and internal sharing.
There is a limit to the range that one person can watch. Human resource management etc will be around 10 ~ 20 people. This size is the size of one department. The organization has a hierarchical structure, such as the department to manage several of those departments, the department to manage some of those departments at once, and so on. On the other hand, if you look at the organization vertically in an expression command system, the less hierarchy, the faster the penetration and execution of decision making and policy becomes faster. Less hierarchies are more efficient. The range and hierarchy of management are in a trade-off relationship, but we have to design the optimum management width and hierarchy according to the company's business.
Management has business goals, and each organization has a goal to be achieved in order to achieve that goal. If you break down the goal, you will set personal goals to achieve management goals. Conversely, depending on the individual's appropriate goal setting, the goal of the company will be decided. Personal goal setting is important not only from a management perspective but also from labor management point of view. It is not too high, not too low, properly set goal is a motivation to duty. By evaluating the degree of accomplishment of the set goal, it is possible to evaluate personnel suitability and personal performance. You can monitor your progress and give advice on your work as you progress. If the target is not reached, it will lead to improvement by cause analysis.
When trying to improve efficiency and productivity by improving operations, management is not the only idea to issue ideas, but a scheme to have each employee propose business problems and improvement ideas widely to each employee. By having many people suggest it, not only can good ideas gather, but at the same time not only raising problems at the workplace level where improvement of management's eyes can reach and suggesting improvement, but if employee's proposal is utilized for management It will lead to the morale of employees.
Practice raising issues and improvement proposals at the field level on a small group of on-site employees. You can hone your ideas as a team by discussing ideas and discussing them. You can also run it at the field level immediately.
When thinking about solving or executing a certain problem, it may be better to create a new team and implement it for the purpose of solving and executing the task rather than adding it to the existing work of the existing organization.
The roles of organizations and individuals are systems that select their own jobs themselves rather than the consciousness of being given. In addition to raising personal motivation, it becomes a new application method of human resources who is the most appropriate management resource, from the company side to personnel at the right place. Job rotation is one of Japanese management, but when considering long-term human resource development within a company, it can be said to be one of the methods to learn continuously while working.
Marketing is a variety of activities to have more customers buy their products and services. Even if you make a product or devise a service, you can not sell anything unless you do anything. Sales will change depending on marketing activities. The purpose of marketing is to create consumer demand and connect it to purchase. The basis of marketing is to be customer oriented. On the corporate side, we tend to look at products and services from the company's point of view by all means but it is important to see from the customer's point of view. In marketing, "product" x "market" x "customer" is the key word.
Before consumers can purchase, there are several stages. (1) To have consumers know about their products and services, (2) to have them recognize that it is attractive, (3) that there is a means to provide to consumers, these three are necessary. The first is advertising. Effective advertisement is necessary to tell who message (attractiveness of product, added value) to who (target customer). Advertisement by mass media, use of websites, advertisement promotion activities at sales outlets such as stores. Second, it is the key to setting target customers and extracting product characteristics that can be appealed to target customers. Pricing is also important. We perform product positioning and product analysis. Third, as a means to provide to consumers, there is a study of distribution channels and sales methods.
With different competitors, product differentiation and non-price competition are key to growing their own products and services and profitable. There are sales, profits, market share, etc. as marketing objectives, but the marketing strategy will change depending on which target. Typical ones are push strategies and pull strategies. Push strategy focuses on individual sales to consumers, sales promotion activities, emphasis on retail support, individual market orientation. Pull strategy is to promote product power through advertisement. It is mass market oriented.
There are four P's in a representative marketing strategy. Production (product strategy) aims to differentiate consumer cognition (product positioning) with awareness of what products are to be marketed and products of competing companies. Price (pricing strategy) is not simply to add the profit to the manufacturing cost as a selling price, but rather pricing while looking at the price of the competing product and appealing the price itself to consumers. If you are competing with the same type of product, it will be advantageous to price it a bit cheaper than competing products. Reduce the function from competing products, instead doing drastic pricing. On the contrary, by introducing high-priced items, there is also a strategy to foster brands and respond to the demand of luxury-oriented consumers. Promotion (promotion strategy) is promotion, sales promotion activity. It is setting up customer targets and planning promotion and sales promotion activities that can appeal to the appeal of products with many points of contact to the set customer base. With this activity, we aim to differentiate it from competing products by recognizing to consumers. Place (channel strategy) is a strategy in the distribution process. Internet sales, agency sales, establishment of directly managed stores, strategy formulation by distribution business category, ingenuity of lead time and delivery cost reduction etc.
There are consumers and competitors in the market. Consumers are not vaguely captured by being an unspecified major, but segment the consumers by age, gender, income class, occupation, etc. and analyze which segments can be consumers. For example, if it is a fashion relationship, it is a woman in her twenties, if it is not a consumer good but a production property, which industry? By setting target customers, we can clarify the product planning and sales promotion strategy that suits the customer's behavioral characteristics and preferences.
By targeting customers to categories, customer targets will analyze to which layer their products are appealing and make use of it in marketing, focus on which tier and develop products that appeal to that tier I will do so. The methods of categorization are divided into three categories: (1) divide by region, (2) divide by sex and age group, (3) to divide by occupation, income class, If you can extract common patterns (psychology, behavior, purchasing habits) of categorized customer base, it will be a hint of product development and marketing. At the same time, it is important whether the customer base of attention is expanding year by year or shrinking. If you are expanding, targeting that customer base is a business opportunity. However, as competitors may be thinking in the same way, careful attention should be paid to other company trends.
We classify our products and competitive products according to the perception of consumers and explore market opportunities in the blank part. We will take one item concept on one horizontal axis and another product concept on vertical axis and map our product group. The point is to confirm whether each product is mapped well-balanced so that it does not overlap, or whether it is a mapping corresponding to the direction of the trend of consumers. If you map not only your own product group but also the competitor's product group, you will also be able to grasp the competitive relationships of products and the status of divestiture. By mapping to 2 dimensions, you can visually grasp the character of the product. If you set the market share on the horizontal axis and the market growth rate on the vertical axis, if you compare PPM analysis on the horizontal axis, profit on the horizontal axis, market growth rate on the vertical axis and the size of the circle to be plotted with sales, It can be used to formulate marketing strategy for each product.
When multiple products are introduced to the market, we try to differentiate functions, price ranges, target customers among the products, product lineups of basic products and optional items, peripheral equipments, various kinds of individual customers We can meet demand and demand for various customer base.
This is a method of product management in companies offering various products and services. Products and services are not necessarily selling equally to the same extent. It is common that there are variations among products and services. ABC analysis is not to manage uniform products and services uniformly, but to divide products / services into A, B and C to define management methods with the concept of "divide and rule". For example, if you pay attention to sales, you rank products / services by sales amount, classify products with high sales as A, then product group with high sales as B, and product group with poor sales as C . For each class A, B, C, change the sales strategy. For example, C class products are cut off, or intensive advertising is introduced.
Demand will be the basis of marketing. Whether the market size will expand in the future, whether customer trends, potential trends of potential customers or not. In particular, the prospects of potential customers who are not manifested as customers are important. It is also to analyze products that are not handled as well as existing products. Although market size generally represents sales volume, analysis of profitability and future trend of profitability are also important.
Competition We will analyze and analyze the four P's of competitors' products, prices, sales promotion activities, distribution, so-called competitors, and clarify whether to select a competitive relationship with our company, such as competition or thinking about living. If it is a retailer, it is whether to select competition considering geographical factors as a trade area analysis or think about division.
To appeal to the customer the added value that it owns, it is good to sue with three keywords. For portable digital products, "thin" "light" "cheap" is the key word. Keywords must be verifiable from the perspective of consumers. For example, appeals such as "processing is fast" and "abundant function" require concrete target of comparison and can not be confirmed until actually purchased and used long. "Thin" "light" "cheap" can be easily verified at the point of sale (to actually pick it up, compare prices with competitors' products) is possible. If consumers can easily understand the meaning of keywords, differentiate them from other companies, and extract keywords that consumers can easily verify themselves, they can appeal added value. Also, devising a business model or product strategy that produces keywords will conversely create added value.
The product can be divided into three types, nearest article, purchase item, specialty item with its character. For the most extensive items, although the amount of money such as groceries and everyday goods is low, the purchase frequency is high, and the distance to the store affects the purchase decision. The purchase items are durable consumer goods such as electric appliances, but the purchase frequency is low although it is expensive. From the distance to the store, product selection and prices will affect purchasing decisions. Specialty items are those that are limited to sports goods such as golf and brand clothing where sales outlets are limited, and specialty shops such as medicines. Enrichment of product lineup of specific products and abundance of expertise on products affect purchasing selection.
Products have a lifecycle. There is a sales promotion strategy according to each product life cycle. We will combine product differentiation strategy and market segmentation strategy according to product life cycle.
There are mainly two pricing strategies in the introduction period. (1) Upper layer absorption strategy: It is a strategy to establish a brand image by targeting to customers with low price elasticity at high price setting. It is suitable for cases where mass production or new entry is difficult in a non-price competitive state due to product differentiation. (2) Market penetration strategy: It is a strategy to open up a customer base with low prices and high price elasticity, establish a large market share, and widely acknowledge the product to consumers. It is suitable for cases where it is possible to create a barrier to entry of competitors by high share and low price sales, and to reduce costs advantageously due to economies of scale and experience curve effect.
Growth period pricing strategy is a strategy towards market segmentation with expansion of product line and price range. Companies with upper absorption strategies will add products targeting the masses and orient themselves to a full line strategy. Companies with a market penetration strategy will add high-priced items aiming at upper classes and develop them to a full-line strategy. However, attention is required because sophistication may be difficult due to the establishment of popular images.
Development and sales of new products will proceed with the following process.
Building a brand is an effective way to differentiate products. If we can give consumers the image of luxury goods, high quality, high performance, we can maintain high prices with differentiation, even when we introduce new products, we get reliability because we are products of this company I can. The advantage of the brand is that once you gain the trust of consumers, it is highly sustainable, and the brand image is fostered for the entire product group. Establish corporate image and avoid price competition. Private brands are to be sold as retailers themselves to market products developed independently. It is possible to prevent the influence of competitors by having a degree of freedom in the retail store side in terms of price and product settings, and not being handled by competitors, this product of only this retail store.
To know a customer is to categorize the customer with its common nature and grasp the trend of the categorized customer base. Market segmentation (market segment) is classifying and structuring customers who can only be captured vaguely. There are methods in the following viewpoint as a method of segmentation.
Classify customer characteristics in downtown area and suburbs, regional urban area, rural area. There are classifications such as East Japan, West Japan, Chubu etc. If you are a retailer, you can set a trading area within walking distance or depending on transportation conditions.
Classified according to sex and age such as male and female, young people, middle-aged and elderly, elderly. I will grasp the palatability, the way of thinking, the economic situation of each hierarchy, the population change of each hierarchy. In recent years, aging has progressed, young people are decreasing, while elderly people are increasing.
It is a classification of psychological reaction patterns of customers.
Classified by occupation, income level, family composition, etc.
Products with overlapping customers are competing. For example, mobile phone communication charges and karaoke are the main customers of young people, and assuming that income and total expenditure are almost constant every month, expenditure to karaoke tends to decrease in the month when cellular phone communication charges increase.
There are the following options as strategies to be taken after market segmentation. Promiscuous marketing emphasizes commonality over market segment differences. It extracts commonality between segments and introduces a large quantity of products that can appeal that part to the market. As the market size is large, companies with confidence in competitiveness will choose. Discriminatory marketing is marketed by market segment. It is a strategy to introduce products tailored to each segment, respond to the diverse needs of the market, and appeal to every layer. Intensive marketing is a strategy that concentrates on specific market segments, aims to appeal to targeted customer base by concentrating and to secure competitiveness with other companies.
Knowing about consumers is essential for product development and marketing that matches consumer needs. Considering the purchasing decision process until consumers purchase goods, you can analyze what is linked to purchasing. The purchasing decision process is as follows. First of all, there is some desire for products. It is problem recognition. After that, there are exploratory behaviors to find products that match your desires. The item searched will be evaluated to satisfy the desire. It is evaluation behavior. The most valued ones are purchased. It is purchase decision. I can not check whether it was originally expected unless I purchase it and actually use it. After purchase evaluation, it is verified whether purchase behavior was correct. If purchasing was not what was expected, there are mainly two psychological patterns. One thing is to regret purchasing. The other is to justify buying behavior and self-consent while regretting purchasing. This is called cognitive dissonance. As a determinant of purchasing behavior, the psychological aspect of consumers as well as the characteristics (functions / performance, price, design) of products are greatly affected. They are three, personal characteristics (demographic), collective characteristics (family, congeneric group), cultural characteristics (social class, etc).
We will select the optimal marketing strategy from the market position of our products. (1) If our company is a market leader, we will try to maximize market share and profit through product lineup of product full lines. (2) If our company is a market challenger at the latter group, we will aim to achieve the top share in terms of market share by securing a certain market share by differentiating it from the leader. As another strategy, take a strategy to follow the leader as a market follower and secure a certain profit at low risk. Also, in later generations, there is a strategy to avoid unique markets in specific fields where the market size is small but there is no competitor as a market niche, avoiding competitive markets. Because it is a market with a small market size, it can be said to be suitable for small and medium enterprises.
The process that the new products and services penetrate and spread into the market is brought by four types of consumers. When new products and services are introduced to the market, innovator type consumers purchase. This type of consumer loves new things and can be said to buy more than others' reputation by their own thoughts. Advertisement promotes product innovation. As initial adopters continue to this, market penetration will proceed. Advertisement promotes the functionality and economics of products. As the number of initial hires increases and popularization advances, the product's name recognition increases and reputation information also increases. The increase in reputation information itself brings about advertisement propaganda effect and the purchase of follower type consumers increases. Ultimately, it will converge on the market scale excluding non-purchasers. This process can also be explained by a mathematical model of the diffusion curve.
There are the following methods of promotion. Depending on the marketing strategy you choose, choose the most effective method. Advertising is a one-way medium, but it is the most common one that can be repeatedly recognized. Publicity (public relations) brings about the image of the company itself and the reliability of the company rather than promoting products. Promotions include retail support (sales conference, sales training, POP advertisement), catalog making, demonstration sales, exhibition, privilege planning, human sales and so on. Through various means, we must strive to establish and maintain communication with customers.
The distribution channel strategy is as follows. (1) Open channel policy is a strategy to put products on any distribution route and to reach as many consumers as possible. It is a form which is most in the closest item (food, daily necessities etc). (2) Limited channel policy is to be sold through a series of distribution channels, which aims at securing sales and reducing transaction costs through distribution series. It is a form many for home appliances. (3) The monopoly channel policy is to sell with narrowing down sales channels, such as establishing one regional sales window. By establishing a monopoly store, we will maintain prices, secure brand image, and offer fine-grained services. It is a form useful for image differentiation.
If it is of the same quality, it is decided that the price should be cheaper. In order for only the ones with the lowest price to sell, it is conditional that (1) homogeneous ones are present, (2) they can compare prices, and (3) purchase at the lowest price can be purchased. The development of the Internet makes it easier to compare prices and purchase procedures, and for homogeneous items price competition intensifies making it less likely to make profits. On the other hand, products that do not have homogeneous ones will not be adversely affected by the development of the Internet. For products that only a specific consumer appeals, the awareness of the product will increase due to the net search and there is even the possibility that the demand will increase rather. Therefore, in order to avoid price competition, it is necessary to provide original products that other companies can not manage, create entry barriers that other companies can not enter, specialize in niche markets.
The company raises funds, invests in capital with the funds, conducts necessary input (raw materials, labor etc.) for production, produces products, sells, and collects funds. Continue this business by repeating this cycle and raise profit. In the process of doing business, we record acquisition of funds by sales, acquisition of funds by fund procurement, payment of funds, etc., grasp the actual condition of the business, evaluate the business performance, formulate and review the management plan, Financial management is to confirm the cash flow.
There are basic principles in corporate accounting. When listing it, it can be said that (1) the principle of truth (to report the truth), the principle of regular bookkeeping (to create accurately), (3) the capital transaction, the principle of the profit and loss transaction classification (both capital record and profit and loss record ), (4) Principles of clarity, (5) Principles of continuity (to continuously record in the same way over the long term).
The first step in finance management starts with attaching a record of money entry and exit. We record daily income and expenditure every time it occurs. In order to use it for business management, we prepare a cash-flow table summarized by month. As for the management of funds, it is important to grasp the current status of cash funds and working capital and plan. We will create a fund management table and check monthly cash entry and exit, the status of cash on hand, future prospects at all times.
Example of monthly account book
Revenue section
Sales revenue
Borrowing
New own funds
Subsidy
Expenditure section
Purchase cost
Personnel expenses
Advertising expense
Office maintenance fee
Capital investment
Monthly balance
Last month's retained earnings
Monthly balance
Retained earnings next month
There are three main reasons for accounting records as below.
There are three basic documents that express corporate accounting: the balance sheet, income statement and cash flow statement. In the balance sheet, the situation of own funds, debts, assets at a certain point in time (for example, as of March 31, 2011), the income statement shows that the company's performance such as sales and profits over a certain period (eg 1 year) , Cash Flow Statement represents cash incoming and outgoing from companies such as deposits and withdrawals for a certain period (eg one year).
The balance sheet summarizes the financial status at a given time in a table that you can see how the company raises funds and uses it. On the left side, assets part, capital part on right side, assets = capital. The capital division consists of borrowing (other personnel capital) and equity capital. Capital is 3 million yen if own funds 1,000,000 yen, procurement by issuing shares 1 million yen, procurement by borrowing is 1 million yen, the capital is 3 million yen, it will look like the figure on the balance sheet. I will fill out the use of 3 million yen in the asset section. Assets are liquid assets that can be cashed within one year, and fixed assets over one year. For example, if you purchase machinery and equipment at 2 million yen, fixed assets are posted at 2 million yen. If you reduce cash by 2 million yen and deposit the remaining 1 million yen in a financial institution, current assets will be charged 1 million yen. Cash is reduced by 2 million yen at purchase, but instead of having mechanical equipment with a value of 2 million yen, the total value of the asset will not change. By comparing past and present balance sheets, you can grasp the change in debt, the change in assets, and the increase or decrease in own funds.
Structure of balance sheet: It consists of assets, liabilities, and capital, and it becomes assets = liabilities + capital. Department of assets Current assets (easy to convert, cash and deposits, stocks) Fixed assets (those not readily convertible, real estate, machinery facilities) Intangible assets (patent, software, fame · reputation) Debt section Current liabilities (those to be repaid within one year) Long-term liabilities (other than the above) Capital part Equity capital (investment) Capital reserve Internal retained earnings
By comparing the balance sheet between the previous year and this fiscal year, you can grasp changes in borrowings, capital, and assets. The point of interest is short-term borrowings (current liabilities) and assets easily convertible (current assets, current assets). It is necessary for stable management of the company to grasp the change of the amount of money that needs repayment, the money that can be used freely (cash on hand). The balance sheet shows the composition of the procured capital and the assets it owns, so you can see which part has changed.
| Subject | Previous term | current term | Next term plan | |
| Current asset | ||||
| Bills receivable | ||||
| Securities | ||||
| Inventory | ||||
| Fixed asset | ||||
| Building / construction | ||||
| Land | ||||
| Intangible asset | ||||
| Investment securities | ||||
| Asset total | ||||
| Subject | Previous term | current term | Next term plan | |
| Current liability | ||||
| Payables / Accounts Payable | ||||
| Fixed liability | ||||
| Accrued retirement allowance | ||||
| Subject | Previous term | Current term | Next term plan | |
| Capital | ||||
| Legal reserve | ||||
| Optional reserve fund | ||||
| Period undisclosed profit |
The income statement is a summary of the situation of the company's profit and loss for a certain period. Companies enter business and receive payment from customers. This is sales proceeds. Gross profit (gross margin) is the gross profit (gross margin) minus the direct expenses (raw material costs, R & D expenses, depreciation expenses and personnel expenses of the manufacturing department) from sales proceeds. Operating income is gross profit minus indirect expenses (sales and administration department personnel expenses). Ordinary income is derived from operating profit minus non-operating income (payment of debt, dividend of financial investment · receipt of interest, foreign exchange gains / losses). Ordinary income is usually called "profit", but the concept of ordinary profit is not found in accounting in Europe and the United States. Temporary profit / loss (acquisition / sale of assets) from ordinary profit is added to the profit before tax. The one that subtracted the tax from here is net profit. The remainder after subtracting executive remuneration and shareholders' dividend from net income is the share of the company (retained earnings). Retained earnings will be added to accumulated retained earnings (retained earnings) in the past, and retained earnings will increase. It can be said that the income statement describes a calculation process starting from sales and subtracting various profits and losses additionally. Looking at this, you can see at a glance sales, profit, tax payment and retained earnings, which are representative performance indicators in a certain period. By comparing the past and present income statement, you can grasp the change in sales, increase and decrease in expenses, change in profit, increase and decrease in retained earnings.
Structure of income statement
amount of sales
Cost (variable cost)
Gross profit
Operating expenses (fixed costs)
Operating income
Non-operating expenses (Interest payment etc.)
Ordinary income
Extraordinary loss (temporary gain or loss)
Pre-tax profit
tax
Net income
Retained earlier in the year
Executive remuneration
Shareholder dividend
Retained internal reserve
By comparing the income statement between the previous year and the current fiscal year, you can grasp changes in sales, profits, and expenses. The income statement shows the calculation process from sales to net income so you can see at what stage the difference occurred.
| Subject | Previous term | Current term | Next term plan | |
| Sales | ||||
| Cost of sales | ||||
| Gross profit | ||||
| Operating expenses / administrative expenses | ||||
| Operating profit | ||||
| Tax | ||||
| Net income |
The cash flow statement is a cash inflow from a company for a certain period of time (eg 1 year). If there is a sales payment, payment of raw material costs will be withdrawn. If you do capital investment, you can withdraw money, borrow it, you can repay the deposit, borrowing and calculate it as withdrawal. Sales and costs are also recorded in the profit and loss statement, but the difference is that the income statement records accounting deposits and withdrawals, whereas the cash flow statement shows the actual incurred deposits And that is to record the withdrawal. For example, in the income statement, accounts receivable and accounts payable are accounted for as accounting sales and payments, but in the cash flow statement, we do not account for payments and withdrawals actually. Depreciation expenses are accounting costs, but they are not actually paid, so they are not included in the cash flow statement. The advantage of the Cash Flow Statement is that you can grasp the actual real money in and out. Understanding how much cash a company has has is necessary information for securing working capital and making progress, investment planning and financial planning. When categorized in the cash flow statement, it consists of three categories: operating cash flow, investment cash flow, and finance cash flow. They represent the profit actually obtained by business activities, the actual expenditure of investment, and the actual withdrawal of funds from financial institutions.
| Subject | Previous term | Current term | Next term plan | |
| Sales activity CF | Depreciation cost | |||
| Accounts receivable | ||||
| Accounts payable | Tax | Investment activity CF | ||
| Fixed asset acquisition and sale | ||||
| Acquisition and sale of securities | Free CF | Finance activity CF | ||
| Decrease in long-term borrowing | ||||
| Decrease in short-term borrowing | Dividend | CF total |
When you create an account document, you can not only grasp the performance of the company with that number, but also can do various analyzes by calculation. However, you can not read the meaning of management simply by looking at the figures in the calculation result. As an analytical method, you can read the meaning by comparing the plan with the actual value, comparing the results of last year with this year's results, comparing with other companies in the same industry and industry standard values. Comparison of the target value and actual value set up by the management plan can improve management by evaluating the validity of the management plan and why the difference occurred by analyzing the cause. In the case of small and medium enterprises, the numerical value of the management index of SMEs is a reference.
Representative items in business analysis are breakeven point analysis. You can visually grasp how profit and loss changes according to sales. Various analysis can be done by taking sales volume on the horizontal axis and sales amount and expenses on the vertical axis and graphically showing the sales and expenses. The point is visualization of the total cost consisting of fixed costs and variable costs. Between sales line and cost line represents profit and loss. The point of intersection is called a breakeven point, which means that sales = expenses in this respect, so that at least this sales is necessary so that it does not become a deficit. Looking at the sales line and the cost line, you can see the sales that will give a certain profit. Break-even point analysis is an effective method for setting sales goals. When the precondition is changed, the positional relationship between the two graphs changes, and various simulations can be performed.
Increase / decrease fixed cost → Translate cost curve → Change break-even point Increase / decrease variable cost → Change in inclination of cost curve → Change in breakeven point Increase / decrease the selling price → Change of the slope of the income curve → Change of the breakeven point Increase or decrease profit targets → Change in sales targets by parallel movement of profit target curves
We analyze the power to generate profits using the profit and loss statement. We will focus on changes in sales and profits. The index of profitability is the operating income margin (sales operating income margin = operating income / sales). I will see this change. In order to improve profitability, in order to improve the operating income margin of sales, it is necessary to (1) reduce the cost of sales, (2) save on general administrative and selling expenses, (3) ④ We will restrain non-operating expenses (eg reduce borrowings and reduce interest payment). Furthermore, we will (1) compress sales receivables (increase payment collection rate), (2) compress inventory assets (thorough inventory control), and (3) compress fixed assets (organize idle assets).
We analyze the stability of management using the balance sheet. We will focus on changes in borrowings and capital. The indicators of soundness are the current ratio and the capital adequacy ratio. I will see this change.
Analyze the efficiency of the project. Efficiency is how efficiently used finite business resources are linked to profits. The return on total assets (ROA) represents how much profit was generated using assets raised by borrowing and own funds. Return on equity (ROE) represents the profit generated by shareholders and is the return on investment from the shareholders. If a certain percentage of profits are retained internally and incorporated into equity capital, the value of ROE is an indicator of the company's growth. The inventory turnover rate is sales / inventory, and the larger it means that the inventory turns better (there is no bad stock). Total capital turnover is sales / total capital, and the greater the capital / asset turnover (the more effective use of capital and assets).
By analyzing productivity, you can see whether you are maximizing the effective use of limited management resources. Indicators of productivity are as follows. Corporate activities are to create added value and provide it to customers. The added value depends on the following calculation formula. Value added = sales - (purchase + outsource cost).
Labor productivity = added value / number of employees Labor Equipment Ratio = Tangible Fixed Assets / Number of Employees Capital investment efficiency = value added / tangible fixed asset Capital productivity = added value / capital Value added rate = added value / sales Capital turnover = sales / capital
You can take a look at the management situation from the cash flow statement. From operating cash flow, we will evaluate the profitability and sustainability of our business by looking at changes in sales revenue and expenditure expenses (excluding capital investment). From the investment cash flow, look at the trend of investment and confirm whether investment is collected by operating cash flow. From the financial cash flow, we look at the trend of borrowing, repayment, interest payment and check the status of cash flow.
ABC analysis is to calculate sales composition ratio for each product (or customer), rank the products as A, B, C according to profit contribution degree, and decide management policy for each rank. As a management policy, for example, A further strengthens, and C treats handling again. The top 20% of products often occupy 80% of total sales, which is called Pareto's Law. There is also a method of evaluating and ranking each customer (or product) on the purchasing frequency, purchasing time, purchase amount scale and ranking management policy for each rank. This is called FRM analysis. . Existing customers can capture purchasing behavior by managing with information system. We will classify customers according to the analysis and encourage repeat purchase of existing customers with attentive service and sales promotion activities for each class to try to fix customers.
It is the financial accounting that shows the performance of the company as a whole and it reports to outside stakeholders, and management accounting is to analyze the performance of each business and apply it to the company management. If you are doing a lot of business, it is important to know which business profits are derived and which business is not profitable, but if business resources, variable costs and fixed costs are not divided for each business It is difficult to grasp. In evaluating the performance of each business, we will devise measures to divide management resources, sales, variable costs, fixed costs for each business, and to calculate profits (sales - expenses). This is costing. The point is to calculate direct expenses, indirect expenses, total general and administrative expenses, variable costs, and fixed costs.
In business administration, we are forced to make various decisions. Machine A and Machine B as means of production, Investment Plan A and Investment Proposal B as investment projects, and whether to select product A or product B to produce and sell are decided. If you have a high profit among multiple proposals, if the cost is the same, the one with the larger sales, the one with the smaller sales if the sales are the same, but the conclusion can be changed by the way of calculating the direct and indirect costs. By using management accounting method, we can make objective judgment more appropriately.
Costs can be categorized into some according to their nature. It classifies it as fixed or variable with respect to activity amount (production, sales, transportation, sales, purchase, labor input, capital injection, operation time). Direct costs are expenses that change according to the amount of activity, raw material costs, personnel expenses in production processes, utilities costs, etc. If the amount of activity increases, direct costs will increase, so it is also called variable cost. Overhead costs are indirectly expensive for production sales and there is little change depending on the amount of activity like direct expenses. Also called fixed cost. For example, operating expenses, administrative expenses (personnel expenses, utilities expenses, communication expenses) etc. If you do capital investment, purchase costs will occur regardless of the amount of activities that follow, which is also a fixed cost. The point is to distinguish by what amount of activity (or fixed) the activity amount is. In general, we consider production volume and sales as activity amount. You also need to pay attention to which period you think about cost management. Even if it can be interpreted as a fixed cost in the short term, there are also variable costs in the long term. In the variable cost calculation, the variable cost over time is the cost per unit time, the production quantity per hour (production time per unit), the variable cost to the production amount is the cost per unit, the average cost, the limit Depending on the cost, you will have to compare and select several plans.
First we need to grasp fixed costs. Fixed costs are incurred regardless of the size of the business, which is not a problem when the business performance is strong, but at the time of sluggish performance, fixed costs will not go down and fixed costs will increase as variable costs can be reduced. Cost is first divided into fixed cost and variable cost. We will select marginal profit (marginal profit = sales - variable cost = profit + fixed cost) for each business and choose the business in descending order. Calculate the following indicators for each business, classify the businesses in order from the one with the highest value in order, and set the management policy for each class, it will be easier to manage expenses. As indicators of classification, (1) gross profit ratio by product = gross margin / sales, (2) turnover rate by product = sales / average product inventory value, (3) Cross ratio = gross margin rate × product turnover rate, (4) product contribution degree = intersection ratio × sales composition ratio, etc.
There are standard costing and direct costing for costing. For all costs calculation, we allocate fixed costs to each business and calculate the total cost of the project. Activity-based cost accounting is to calculate the total cost of the project by allocating fixed costs according to the activity amount of each business. Direct cost accounting divides variable and fixed costs, and makes variable costs only cost. "Marginal profit" and "gross margin" that do not include variable expenses from sales will be evaluated. Fixed costs are not allocated. Fixed cost will be the period cost.
When thinking about the existence value of a company, there is a difference in value depending on the position. If you are a consumer, you will find it worthwhile if you provide the products or services you want. Employees are the salary level and work content. How about investors? Since it is the owner of the company, we must evaluate the value of the company itself. One is resale value. Now, how much will it cost to sell the company? Evaluation of real estate, financial assets, facility assets will be evaluated, but if it is evaluated as a physical thing, the evaluation of the facility will be low. If it is an investor, the evaluation of the company (stock) is a dividend and a gain in stock value.
Bank borrowing accounts for the largest proportion of various means of financing. Interest rates are determined by the relationship between supply and demand of loaned funds, and interest rates can be considered given from the perspective of individual companies. Given the interest rate, the decision on the investment case will be as follows.
Calculate the return on investment (the ratio of the investment amount to the income resulting from it). This is a function of the investment amount and has a positive slope, but it can be assumed that the investment efficiency gets worse and the slope becomes smaller as the investment amount increases. Evaluate investment opportunities by the following method. (1) Discounted present value method: Discounts the flow of future revenue to the current value and compares it with the investment amount to select the appropriateness of investment and the investment item. (2) Internal rate of return method: If you calculate the discount rate at which the present value becomes zero with the discounted present value method, that value becomes the discount rate giving the breakeven point, and comparing that value with the actually expected discount rate, We can verify the validity of investment. (3) Recovery Period Law: Considering the investment collection period for each project, select investment projects (usually select the projects that can be collected at the earliest).
Business needs capital. Methods of capital procurement include direct financing such as issuing stocks and bonds, indirect financing such as borrowing from financial institutions (short-term borrowing, long-term borrowing), retained earnings or depreciation (depreciation is expensed as accounting However, there is no actual payment and you can turn it into internal reserves) and there are self-finance. Choose the best procurement method (the method with the lowest capital cost) from several procurement methods. As a result, the capital structure is decided. It must be a means of procurement according to the nature of sound capital structure and necessary funds.
As a means to raise capital, there are methods using self funds in addition to stock issuance, corporate bond issue, bank borrowing and so on. As each of its features, (1) stock: shares become capital, which brings stability of management, but costs cost to maintain stock price which is an index to measure the company's performance. This means that procurement costs will be higher than other means, such as dividend costs and achievements that meet the expectations of shareholders. (2) Bonds: Since it is borrowing, unlike shares, it does not affect the management rights of the company. Interest rates set in corporate bonds are procurement costs. (3) Bank borrowing: It is most common as a capital raising. Interest rates are affected by the relationship between demand and supply of lending funds. Interest rates will be procurement costs. (4) Internal reserve: It is the company's own funds. The surplus remaining in the company was accumulated after the profits listed by the company were distributed to the stakeholders of the company. Since internal reserves are self-funded, procurement costs seem to be zero at first sight, but using this as funds deprives the opportunity to earn the profits gained by using this for other investment projects, Procurement cost is the profit rate obtained when used separately.
Calculate the total cost (capital cost) of capital procurement by classifying it by source of capital procurement (stock issue, bond issue, bank loan, self funds) and weighted average. Bank loans and corporate bonds are interest rates. The capital and shareholders' equity are the dividend yield and the price / earnings ratio cost. Although retained earnings are self-funded, it seems costless at first glance, but the opportunity cost is the return on investment and the interest rate that would have been obtained by utilizing retained earnings.
In disclosing information to investors, the recent attention is the disclosure of segment accounting information (by business unit, business activity) and utilization of website in consolidated financial statements. We will also make awareness of our management philosophy, company policy and management goals on websites and other sites.
Management improvement starts with grasping the current state of management, that is, management diagnosis. We will extract and clarify problems and tasks through management diagnosis. Once the problems / tasks are clarified, we propose a solution and propose management resources (people, goods, money, know-how) to be introduced on the time axis so that it can be executed by advancing the procedure It will be summarized as improvement plan. If business improvement alone is insufficient with internal management resources alone, we will utilize external resources (corporate alliance, financial support, management support measures of the national and local governments).
Companies must constantly review businesses and add new businesses according to changes in the external environment. In the beginning, the new business will be trial and error and the business will be carried out in an inefficient state in many cases. After that, we will continue learning through business continuity and accumulation of production experience, constantly reviewing business methods through learning, we will try to improve efficiency and reduce costs. Improvement activities are indispensable for new business.
The basis of management improvement is basically to increase sales, lower costs, and increase profits as a result. Sales, cost, and profit are all important, but which one you place emphasis on in the near future depends on the company's policy. If emphasis is placed on growth of a company, sales increase will be a priority. Generally, as small and medium enterprises increase sales, it will lead to solving many management problems. Sales has a large fluctuation, many also expected does not hit, so likely to be an immediate management risk and expected is out, sales improvement is important. In terms of cost reduction, which then is important, as is to be carried out preferential, fixed costs is the (labor costs, real estate costs, advertising expenses, and administrative expenses, such as equipment costs) compression. To do this, examine the item of fixed costs, to reduce find the unwanted ones, it is to reduce the variable costs instead of the outsourcing and short-term contracts.
In the retail industry, improvement points for raising sales are: (1) Increasing the number of customers; (2) Increasing the customer unit price. To raise the number of customers, you can decompose it into acquiring new customers and increasing the repeat of existing customers. In order to raise the unit price per customer, a mechanism to induce optimal price setting and purchase of multiple products is important. Looking at improvement points for raising sales in another section, it becomes as follows.
There are as many data as you can use for promotion other than sales data. One is called cosal data, and it is data that causes (indirect) change of sales, such as temperature, humidity, weather, existence of regional event, advertisement · leaflet effect, and so on. With the development of POS cash registers, it becomes easy to acquire data on who and when they purchased it, for example, from relationship analysis of customer information such as sex, age, repeat rate and product information (price, correlation between items) It is possible to extract factors leading to increase. The other one is word of mouth information. Word of mouth information can be taken in large quantities on the Internet. By analyzing the word-of-mouth, you can get information on consumer preferences and service evaluation. There may be times when the reputation of your shop is written in the net information.
There are various public support measures. The main ones are subsidies, low interest loans, expert dispatch, information provision. You can receive it under better conditions than receiving financial assistance from private financial institutions. However, there are lack of public knowledge, and it is the current situation that management of SMEs often does not know. By effectively utilizing public support measures, we can strengthen our management capability. Applications are required, and application forms are required to develop detailed management plans and management improvement plans. By applying this application, it will be a positive factor in management as it will provide detailed plans, clarify policies, and evaluate others from planned plans.