The Shotgun Approach - a shotgun covers a wide range in a haphazard or ineffective manner with the hope that something

will hit the target. Examples of shotgun marketing include cold calling, bulk mailings, banner advertising on big with random visitors and e-mail spam. The Rifle shot Approach- a rifle brings things into focus so that you can take aim before pulling the trigger. Taking the time at a trade show to ask a few questions of the person you are speaking with to see if they have any interest in what you're selling is rifle shot marketing. Other examples would be use of targeted ad words, buying qualified lists for a direct mail, or conducting public relations to a small group of publications who share the same audience as you.

Reactionary Marketing Strategy A defensive marketing strategy is largely reactive to the competition or perceived occurrences in the market, according to the website for the Massachusetts Institute of Technology. A defensive strategy seeks to counter product claims made by the competition or to stem the tide of a perceived competitor advantage. For example, a company that highlights the effectiveness of its products in the wake of competitor claims of product inferiority is using a defensive marketing strategy. A company may also seek to introduce products into the market that are better than its existing offerings as part of a defensive marketing strategy.

Defensive Marketing Advantages For an established company with a wide customer base, defensive marketing is a useful strategy. The company doesn't have to actively work to generate customer interest in its products and can simply reinforce its product messages with consumers. A well-built reputation through quality products makes it difficult for a new competitor to enter the market and attack the established company's customer base. The established company simply uses its defensive marketing to reinforce customer confidence in its products and swat the newcomer away.

Offensive Marketing Definition An offensive marketing strategy seeks to attack the market by targeting the weaknesses of the competition and emphasizing the company's strengths in comparison. Offensive marketing does not seek to challenge an industry leader's strengths since that would only play to the leader's defensive marketing capabilities. This strategy attacks the industry leader where the company is at its most vulnerable. For example, a company using an offensive marketing strategy may seek to target an established industry leader's shaky product safety record by emphasizing the safety of its own products. Carpet Bombing The advertising is reactive, disjointed, and anything-but-strategic. The logic of carpet bombing is that if you throw enough explosives in the vicinity of the target, you might just get the target. The problem is that there is tremendous waste and a lot of collateral damage. The damage from this year's political carpet bombing is likely to be a loss of consumer interest in advertising messages. The advertising for candidates could have been so much more effective - and palatable - if the campaign managers had followed the proven and effective tenets of marketing:

Develop a cohesive strategy that builds over time and presents the consumer with a clear and understandable benefit. Marketing vs Sales:
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Marketing
determine future needs and has a strategy in place to meet those needs for the long term relationship. One to many fulfill customer's wants and needs thru products and/or services the company can offer. Longer term Identifying customer needs (research), creating products to meet those needs, promotions to advertise said products. pull Marketing is a wider concept Marketing shows how to reach to the Customers and build long lasting relationship

Sales
makes customer demand match the products the company currently offers. Usually one to one fulfill sales volume objectives

Approach:

Process: Focus:

Horizon: Scope:

Short term Once a product has been created for a customer need, persuade the customer to purchase the product to fulfill her needs push Sales is a narrower concept Selling is the ultimate result of marketing.

Strategy: Concept: Priority:

1. Sales is very track-able. Marketing is not. If a sales guy makes a sale, he knows. Marketers dont get that instant gratification. If a person comes in because she saw an ad, she might not even know it herself. She may think she was just walking down the street and was thirsty. Ive heard it said that you have to be in front of a person 3 times before she buys. Does she remember the first time? Did she consciously notice it?

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Advertising
Long term Expensive in most cases Medium to large companies

Promotion
Short term Not very expensive in most cases. Small to large companies

Time: Price: Suitable for:

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Advertising
Assumption that it will lead to sales Giving an advertisement in the newspaper about the major products of a company A type of marketing tool Advertising is a one-way communication whose purpose is to inform potential customers about products and services and how to obtain them.

Promotion
Directly related to sales. Giving free products, coupons etc.

Sales: Example:

About: Definition:

A type of marketing tool A Promotion usually involves an immediate incentive for a buyer (intermediate distributor or end consumer). It can also involve disseminating information about a product, product line, brand, or company. Increase sales. very Soon

Purpose: Result:

Increase sales, brand building. Slowly

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Cover Letter
Less than one page Brief information about the person, work experience, Job profile looking for, career goal.

Curriculum Vitae
Two pages or a little more Name, contact information, education, work experience and relevant work-related skills. Includes a summary of academic background as well as teaching and research experience, publications, presentations, awards, honors, affiliations and other details CV

Length: Contents:

Commonly written as: Purpose:

Cover letter

To complement the CV or resume, briefly introduce yourself and explain your interest and fit for the job.

In Europe, the Middle East, Africa and Asia, employers expect a CV. In the U.S., a CV is used primarily when applying for academic, education, scientific or research positions.

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Curriculum Vitae
Two pages or a little more Name, contact information, education, work experience and relevant work-related skills. Includes a summary of academic background as well as teaching and research experience, publications, presentations, awards, honors, affiliations and other details CV

Rsum
One page, sometimes two pages Name, contact information, education, work experience and relevant work-related skills. Focus is on work experience, listed in reverse chronological order.

Length: Contents:

Commonly written as: Purpose:

Resume

In Europe, the Middle East, Africa and Asia, employers expect a CV. In the U.S., a CV is used primarily when applying for academic, education, scientific or research positions. personal use

Job applications.

other purpose:

Official use

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Quality Assurance
QA is a set of activities for ensuring quality in the processes by which products are developed.

Quality Control
QC is a set of activities for ensuring quality in products. The activities focus on identifying defects in the actual products produced. QC aims to identify (and correct) defects in the finished product. Quality control, therefore, is a reactive process. The goal of QC is to identify defects after a product is developed and before it's released.

Definition:

Focus on:

QA aims to prevent defects with a focus on the process used to make the product. It is a proactive quality process. The goal of QA is to improve development and test processes so that defects do not arise when the product is being developed. Establish a good quality management system and the assessment of its adequacy. Periodic conformance audits of the operations of the system.

Goal:

How:

Finding & eliminating sources of quality problems through tools & equipment so that customer's requirements are continually met.

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Quality Assurance
Prevention of quality problems through planned and systematic activities including documentation. Everyone on the team involved in developing the product is responsible for quality assurance. Verification is an example of QA

Quality Control
The activities or techniques used to achieve and maintain the product quality, process and service. Quality control is usually the responsibility of a specific team that tests the product for defects. Validation/Software Testing is an example of QC When statistical tools & techniques are applied to finished products (process outputs), they are called as Statistical Quality Control (SQC) & comes under QC.

What:

Responsibility:

Example:

Statistical Techniques:

Statistical Tools & Techniques can be applied in both QA & QC. When they are applied to processes (process inputs & operational parameters), they are called Statistical Process Control (SPC); & it becomes the part of QA. QA is a managerial tool

As a tool:

QC is a corrective tool

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Mission Statement
A Mission statement talks about HOW you will get to where you want to be. Defines the purpose and primary objectives related to your customer needs and team values. It answers the question, What do we do? What makes us different? A mission statement talks about the present leading to its future. It lists the broad goals for which the organization is formed. Its prime function is internal, to define the key measure or measures of the organization's success and its prime audience is the leadership team and stockholders.

Vision Statement
A Vision statement outlines WHERE you want to be. Communicates both the purpose and values of your business.

About:

Answer:

It answers the question, Where do we aim to be? A vision statement talks about your future. It lists where you see yourself some years from now. It inspires you to give your best. It shapes your understanding of why you are working here.

Time:

Function:

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Mission Statement
Your mission statement may change, but it should still tie back to your core values, customer needs and vision.

Vision Statement
As your organization evolves, you might feel tempted to change your vision. However, mission or vision statements explain your organization's foundation, so change should be kept to a minimum. Where do we want to be going forward? When do we want to reach that stage? How do we want to do it?

Change:

Developing a statement:

What do we do today? For whom do we do it? What is the benefit? In other words, Why we do what we do? What, For Whom and Why? Purpose and values of the organization: Who are the organization's primary "clients" (stakeholders)? What are the responsibilities of the organization towards the clients?

Features of an effective statement:

Clarity and lack of ambiguity: Describing a bright future (hope); Memorable and engaging expression; realistic aspirations, achievable; alignment with organizational values and culture.

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Cartel
An explicit, formal agreement between firms in an industry to fix price and production quantity.

Oligopoly
An economic market condition where numerous sellers have their presence in one single market. A small number of large firms that dominate the industry. Moderate/fair pricing due to competition in market. But much higher than perfect competition (where there is a large number of buyers and sellers) A small number of firms dominate the industry. These firms compete with each other based on product differentiation, price, customer service etc. Barriers to entry are very high as it is difficult to enter the industry because of economies of scale.

Meaning:

Prices:

Unusually high. Prices are fixed by cartel members.

Characteristics:

A small number of firms dominate the industry. Prices and production quantities are fixed. Product is undifferentiated.

Barriers to entry:

Barriers to entry are very high as it is difficult to enter the industry because of economies of scale.

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Cartel
Market making ability by an explicit agreement between the dominant players in the industry.

Oligopoly
Market making ability because of very few firms in the industry. Each firm can therefore significantly influence the market by setting price or production quantity. Health insurers, wireless carriers, beer (Anheuser-Busch and MillerCoors), media (TV broadcasting, book publishing, movies) etc.

Sources of Power:

Examples:

OPEC, lysine cartel, Federal Reserve

'Barter'
An example of a barter arrangement would be if someone built a fence for a cattle farmer in exchange for food. Rather than the farmer paying the builder, say, $1,000 for the fence, he would give the builder a similar value in beef. Virtually any good or service can be bartered. For individuals, bartering not only has an obvious financial benefit - it lets you keep more money in your pocket - it may also have a psychological benefit in that it can create a deeper personal relationship than a purchase and sale transaction. When thinking about what you can barter to obtain a good or service you want, consider not only any possessions you might be willing to part with, but also any skills you have to offer. These skills might include what you do professionally, but they can also include any activity youre proficient at, from cleaning to babysitting to yard work to baking. You could even offer the use of your truck to someone who needs to move furniture in exchange for their help with, say, proofreading your new marketing newsletter. One limitation of bartering is that you can only exchange goods and services with people you know. So if you dont know anyone who is offering what you want, you wont be able to get it through bartering. To overcome this limitation, bartering groups and bartering websites have been created to help barterers find more people to trade with.

Advertising bartering comes in all shapes and sizes. Some top-tier sites negotiate large-scale barter deals directly, effectively putting millions of unsold impressions to good use. Many small sites use banner exchanges as a way to increase their reach. Ezines often swap sponsorships in an effort to boost subscriptions.

The terms of a barter agreement are often limited only to the creativity of the participants. They can involve trading standard, rotating impressions. They can also involve trading beyond-the-banner site sponsorships featuring numerous fixed placements of varying formats.
Consumer vs Customer

Consumer and customer are people who buy goods and merchandise. They are people who are constantly looking for good deals and discounts in order to save money and make the economy better. Despite their similarities, they also have their own differences. Consumer This is a broad term for individuals that use products and services that are generated in the economy. They are the ones who consume the products or services they have bought or were bought for them. They use these products based on what they have heard or seen and apply all the information where deciding whether they need the product or not. Customer Came from the term, custom, meaning habit. These are people or organizations who frequently visit your store, they purchase from you and no one else. The owner or store keeper also makes sure that his/her customers are satisfied. In this way, owner and customer maintain their relationship, which means expected buys in the future. With this term, another slogan for customers was revealed the customer is always right. Difference Between Consumer and Customer Consumers either buy or dont buy the products that they necessarily use while customers are people who buy goods and services but may not use the merchandise themselves. Consumers have goals and purpose while buying items while customers buy these products and may not use them personally, they either buy them to resell or buy for those who want them. Consumers pertain mostly to an individual or family while customers can be an individual, organization or another seller. Consumers play a role in the demand of products in the economy while customers can simply decide if this will go or not.

Credit Practices:
Develop a credit policy This is the boring but important phase of credit management, but dont be tempted to skip it, as it will make the rest of the credit management process a lot easier. What should be in your credit policy? Objectives: What is the purpose of this policy? Generally, to provide a reference on the businesses you will extend credit to, under what circumstances, how much, and under which terms. Credit approval process: Set out the steps for how you will deal with new debtors, including assessing creditworthiness. Credit limits: Define the factors that contribute to each customers credit limit. You may decide that allnew customers will be held to a certain limit until they have paid a set number of invoices on time, or you may choose to set limits according to the customers risk rating. Credit terms: Terms should include the length, for example 30 days, and any disincentives for late payment, such as interest charges. The debtor must declare in writing that s/he understands and agrees to these terms to make them enforceable. Monitoring and reporting: Using CreditorWatch you can monitor your debtors for adverse information (court judgements, defaults and ASIC changes). Evaluate your debtors regularly, for example every quarter. Response to bad debt: Set out the actions you will take if a debtors account falls in arrears. This may include a warning process, possible consequences such as lowering credit limits or withholding credit, or shortening termsand a collections process, for example refinancing the debt, mediation/arbitration, using a debt collection agency or litigation.

Manage risk A proactive approach to risk management is the key to keeping your cashflow cycle in check as well as maintaining a good credit relationship with your customers. Be sure your credit manager and

accounts receivable department are familiar with your business credit policy and refer to it regularly. Their role is to monitor changes against the debtors initial credit assessment and act accordingly i f there are signs of trouble. In many cases, timely communication with the debtor is all it takes to keep the payments on track and the relationship in check. Risk management is about allowing for contingencies that benefit you in the long term, so a good credit policy should allow for financial mishaps and offer solutions that help you avoid expensive, time consuming consequences like litigation while keeping the customer relationship intact. These three practices should provide the backbone to any credit management process in any industry. Youll find by remaining vigilant about credit you can keep both your suppliers and clients happy and maintain a healthy cashflow. Customer analytics is a process by which data from customer behavior is used to help make key business decisions via market segmentation and predictive analytics. This information is used by businesses for direct marketing, site selection, and customer relationship management. Marketing provides services in order to satisfy customers. With that in mind, the productive system is considered from its beginning at the production level, to the end of the cycle at the consumer. Customer analytics plays a very important role in the prediction of customer behavior today. Retail Although until recently over 90% of retailers had limited visibility on their customers, with increasing investments in loyalty programs, customer tracking solutions and market research, this industry started increasing use of customer analytics in decisions ranging from product, promotion, price and distribution management. Finance Banks, insurance companies and pension funds make use of customer analytics in understanding customer lifetime value, identifying below-zero customers which are estimated to be around 30% of customer base, increasing cross-sales, managing customer attrition as well as migrating customers to lower cost channels in a targeted manner. Community Municipalities utilize customer analytics in an effort to lure retailers to their cities. Using psychographic variables, communities can be segmented based on attributes like personality, values, interests, and lifestyle. Using this information, communities can approach retailers that match their communitys profile. Customer relationship management Analytical Customer Relationship Management, commonly abbreviated as CRM, enables measurement of and prediction from customer data to provide a 360 view of the client.

Predicting customer behavior[edit]

Forecasting buying habits and lifestyle preferences is a process of data mining and analysis. This information consists of many aspects like credit card purchases, magazine subscriptions, loyalty card membership, surveys, and voter registration. Using these categories, profiles can be created for any organizations most profitable customers. When many of these potential customers are aggregated in a single area it indicates a fertile location for the business to situate. Using a drive time analysis, it is also possible to predict how far a given customer will drive to a particular location. Combining these sources of information, a dollar value can be placed on each household within a trade area detailing

the likelihood that household will be worth to a company. Through customer analytics, companies can make decisions with confidence because every decision is based on facts and objective Data. Predictive analytics encompasses a variety of techniques from statistics, modeling, machine learning, and data mining that analyze current and historical facts to make predictions about future, or [1][2] otherwise unknown, events. In business, predictive models exploit patterns found in historical and transactional data to identify risks and opportunities. Models capture relationships among many factors to allow assessment of risk or potential associated with a particular set of conditions, guiding decision making for candidate transactions. Predictive analytics is used in actuarial science, marketing, financial [5] [6] [7] [8] [9] [10] services, insurance, telecommunications, retail, travel, healthcare, pharmaceuticals and other fields.
[3] [4]

Predictive models[edit]
Predictive models analyze past performance to assess how likely a customer is to exhibit a specific behavior in order to improve marketing effectiveness. This category also encompasses models that seek out subtle data patterns to answer questions about customer performance, such as fraud detection models. Predictive models often perform calculations during live transactions, for example, to evaluate the risk or opportunity of a given customer or transaction, in order to guide a decision. With advancements in computing speed, individual agent modeling systems have become capable of simulating human behaviors or reactions to given stimuli or scenarios. The new term for animating data specifically linked to an individual in a simulated environment is avatar analytics.

Analytical customer relationship management (CRM)[edit]

Analytical Customer Relationship Management is a frequent commercial application of Predictive Analysis. Methods of predictive analysis are applied to customer data to pursue CRM objectives, which involve constructing a holistic view of the customer no matter where their information resides in the company or the department involved. CRM uses predictive analysis in applications for marketing campaigns, sales, and customer services to name a few. These tools are required in order for a company to posture and focus their efforts effectively across the breadth of their customer base. They must analyze and understand the products in demand or have the potential for high demand, predict customers' buying habits in order to promote relevant products at multiple touch points, and proactively identify and mitigate issues that have the potential to lose customers or reduce their ability to gain new ones. Analytical Customer Relationship Management can be applied throughout the customers lifecycle (acquisition, relationship growth, retention, and win-back). Several of the application areas described below (direct marketing, cross-sell, customer retention) are part of Customer Relationship Management.

Cross-sell[edit]
Often corporate organizations collect and maintain abundant data (e.g. customer records, sale transactions) as exploiting hidden relationships in the data can provide a competitive advantage. For an organization that offers multiple products, predictive analytics can help analyze customers' spending, usage and other behavior, leading to efficient cross sales, or selling additional products to [2] current customers. This directly leads to higher profitability per customer and stronger customer relationships.

Customer retention[edit]
With the number of competing services available, businesses need to focus efforts on maintaining continuous consumer satisfaction, rewarding consumer loyalty and minimizing customer attrition. Businesses tend to respond to customer attrition on a reactive basis, acting only after the customer has initiated the process to terminate service. At this stage, the chance of changing the customer's decision is almost impossible. Proper application of predictive analytics can lead to a more proactive retention strategy. By a frequent examination of a customers past service usage, service performance, spending and other behavior patterns, predictive models can determine the likelihood of [6] a customer terminating service sometime soon. An intervention with lucrative offers can increase the chance of retaining the customer. Silent attrition, the behavior of a customer to slowly but steadily reduce usage, is another problem that many companies face. Predictive analytics can also predict this behavior, so that the company can take proper actions to increase customer activity. Business analytics (BA) refers to the skills, technologies, applications and practices for continuous iterative exploration and investigation of past business performance to gain insight and drive business [1] planning. Business analytics focuses on developing new insights and understanding of business performance based on data and statistical methods. In contrast, business intelligencetraditionally focuses on using a consistent set of metrics to both measure past performance and guide business planning, which is also based on data and statistical methods. Business analytics makes extensive use of data, statistical and quantitative analysis, explanatory [2] and predictive modeling, and fact-based management to drive decision making. It is therefore closely related to management science. Analytics may be used as input for human decisions or may drive fully automated decisions. Business intelligence is querying, reporting, OLAP, and "alerts."

TYPES OF MARKETING
Stage 1 : Domestic Marketing : Companies manufacturing products and selling those within the country itself. So, no international phenomenon at all. Stage 2 : Export Marketing : Company starts exporting products to another countries also. This is the very basic stage of global marketing. Approach of marketer in this stage is said to be ethnocentric because although he is selling goods to foreign countries, product development is totally based upon the taste of local customer. So, focus is still on domestic market Stage 3 : International Marketing : Now, company starts selling products to various countries and the approach is Polycentric i.e. making different products for different countries. Stage 4 : Multinational Marketing : Now, in this stage, the number of countries in which the company is doing business gets bigger than that in earlier stage. And so, instead of producing different goods for different countries, company tries to identify different regions for which it can deliver same product. So, same product for countries lying in one region but different from product offered in countries of another region. e.g. a company may decide to offer same product to India, Sri lanka and Pakistan if it thinks the taste of people of these countries is same but at the same time offering different product for American countries. This approach is called Regiocentric approach. Stage 5 : Global Marketing : This is the final stage of evolution. In this stage company really operates in a very large number of countries and for the purpose of achieving cost efficiencies it analyses the requirement and taste of customers of all the countries and come out with a single product which can satisfy the needs of all. This approach is called Geocentric approach. So, one main difference between International and the Global marketing is the approach of marketer. A truly global company instead of offering different products to different countries (as in International

Marketing), develops and offers a single product to the world. You should note one more very interesting fact that in the early stage of Export marketing also, the company was offering a single product to each of the countries as in the final stage of Global marketing. But it was entirely different because in export marketing you produce according to taste of your country and force that on other countries but in Global approach, you take care of entire countries and develop a product which can satisfy the need of all.

BCG MATRIX
The BCG Matrix was developed by the Boston Consulting Group in 1986 in order to evaluate and analyze the business units and product offerings of corporations. Companies can use this simple 2 x 2 matrix as an analytical tool in portfolio analysis, strategic management, product management, and brand marketing.

The BCG Matrix plots business units or product offerings along two axis; the first is market growth, the second is market share.

Market growth describes the maturity of a market. New markets continue to growth and expand over time, presenting additional opportunities for revenue that can be shared among market participants. Eventually, all markets mature and as they new

revenues sources diminish.

Market share describes the percentage of the overall market that a companys business unit or product offerings enjoy. A business unit or product line is categorized based on the quadrant of the matrix in which it resides. These categories are Cash Cows, Stars, Question Marks, and Dogs.

Cash Cows represent business units or product lines (businesses more generically) that enjoy a large market share within a market which is experiencing low market growth. This means that the market has already matured, and that the business is well established and positioned within the market. Cash Cows typically generate cash in excess of the amount needed to maintain the business. These steady businesses are like having your own money mint. Its ever companys goal to have as many of these as possible. Little capital investment is turned into the businesses since it would be wasted on such a mature market (nothing more could be gained).

Stars (or Rising Stars) are businesses that enjoy a large market share in a fast growing market. Like Cash Cows they boast a prominent market position for the time, but they required investment of resources to maintain or increase their market share is the market continues to grow. They goal of any business is to manage and nurture their Stars through the market growth maintaining their market position. As the market matures, those businesses that maintain their market position with turn from Stars into Cash Cows requiring little to no capital investment while continuing to throw off large sums of money.

Question Marks are businesses that have a low market share in a fast growing market. If Stars have a goal of becoming Cash Cows, Question Marks have a goal of first becoming starts. Since the market growth is strong, there is potential for Question Marks. But their current market share is low. They often require large amounts of capital to gain in market share, yet there are no guarantees that they will succeed. Questions Marks ultimately have a fate of becoming Stars if they successfully gain market share, or they will never gain market share and become Dogs. All the while, they are taking large amounts of capital to sustain. Question marks must be analyzed carefully in order to determine whether they are worth the

investment required to grow market share.

Dogs are businesses that have a low market share in a slow growing, mature market. Sometimes they are pet projects with small amounts of capital allocated to support them. In the best circumstances they barely make enough to sustain themselves. Clearly Dogs are the bleakest of situations. Of course, there may be times when a Dog makes sense to keep around. Maybe the breakeven business creates synergies with other lines of business thus providing an intangible benefit. Other times, there may be other social benefits to such business due to the people they employ and the opportunities they create within the environment in which they operate. Porters Five Forces
Porter's Five Forces Analysis is an important tool for assessing the potential for profitability in an industry. With a little adaptation, it is also useful as a way of assessing the balance of power in more general situations. It works by looking at the strength of five important forces that affect competition:

Supplier Power: The power of suppliers to drive up the prices of your inputs. Buyer Power: The power of your customers to drive down your prices. Competitive Rivalry: The strength of competition in the industry. The Threat of Substitution: The extent to which different products and services can be used in place of your own. The Threat of New Entry: The ease with which new competitors can enter the market if they see that you are making good profits (and then drive your prices down). By thinking about how each force affects you, and by identifying the strength and direction of each force, you can quickly assess the strength of your position and your ability to make a sustained profit in the industry.

The Importance of Porter's Diamond & Porter's Five Forces in Business

by Chirantan Basu, Demand Media
Harvard Business School professor Michael E. Porter has developed several theoretical models on competitiveness based on decades of teaching and research. Porter's "five forces" model shows the five forces that affect the competitive environment of a small business. Porter's "diamond" model shows the four factors that affect the competitiveness of a nation and its industries.

Basics
The five forces in Porter's model are the bargaining power of buyers and suppliers, threat of new competitors, threat of substitute products and industry rivalry. Porter's diamond model has four determinants of competitive advantage: demand conditions, factor conditions, presence of supporting industries and company strategies. Factor conditions refer to a country's resources, such as labor and natural resources, while demand conditions refer to local demand for a company's products and services.

Importance: Five Forces Model

Porter's five forces determine a company's competitive environment, which affects profitability. The bargaining power of buyers and suppliers affect a small company's ability to increase prices and manage costs, respectively. For example, if the same product is available from several suppliers, then buyers have bargaining power over each supplier. However, if there is only one supplier for a particular component, then that supplier has bargaining power over its customers. Low-entry barriers attract new competition, while high-entry barriers discourage it. For example, opening a home-cleaning business is simple, but starting a manufacturing company

is considerably more difficult. Industry rivalry is likely to be higher when several companies are vying for the same customers, and intense rivalry leads to lower prices and profits. Related Reading: Porter's Developing Starting Point for Developing Strategy

Importance: Diamond Model

Government policies can influence the components of the diamond model. For example, some economists suggest that lower income taxes stimulate consumer demand, which leads to higher sales and profits. Countries that invest in education have a skilled workforce, which helps companies engage in research and development. The presence of supporting industries in close proximity to manufacturing companies can reduce input costs and increase profits. Supporting industries include raw materials suppliers and component manufacturers. A competitive industry structure is also important because companies that can survive tough competition at home are usually able to withstand even tougher competition in a global business environment.

Due Diligence 1. Due diligence is the process of systematically researching and verifying the accuracy of a statement. The term originated in the business world, where due diligence is required to validate financial statements. The goal of the process is to ensure that all stakeholders associated with a financial endeavour have the information they need to assess risk accurately. When due diligence involves the offering of securities for purchase, as in an IPO (initial public offering), specific corporate officers are responsible for the proper completion of the process, including the issuer, issuer's counsel, underwriters, CFO and the brokerage firm offering shares. Because of the delicate nature and importance of such judgments to the prospects for the performance of a company's equities in the public market, there is a strong emphasis on neutral, unbiased analysis of both the current financial state and future prospects of the firm in question. 2. In compliance, due diligence describes the degree of effort required by law or industry standard. 3. In real estate, due diligence is the time period between the acceptance of an offer and the close of escrow. 4. In civil law, due diligence is synonymous with "reasonable care." 5. When a patent is issued, due diligence is the requirement that the patent holder should develop a product around the patent, and not just prevent others from doing so.
Generally, due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party. IMPACT ANALYSIS
The Challenge of Impact Analysis The challenge in conducting an Impact Analysis is firstly to capture and structure all the likely consequences of a decision; and then, importantly, to ensure that these are managed appropriately.

For smaller decisions, it can be conducted as a desk exercise. For larger or more risky decisions, it is best conducted with an experienced team, ideally with people from different functional backgrounds within the organization: With a team like this, you're much more likely to spot all of the consequences of a decision than if you conduct the analysis on your own. How to use Impact Analysis To conduct an effective Impact Analysis, use the following steps: 1. Prepare for Impact Analysis The first step is to gather a good team, with access to the right information sources. Make sure that the project or solution proposed is clearly defined, and that everyone involved in the assessment is clearly briefed as to what is proposed and the problems that it is intended to address. 2. Brainstorm Major Areas Affected Now brainstorm the major areas affected by the decision or project, and think about whom or what it might affect. Different organizations will have different areas this is why it's worth spending a little time getting this top level brainstorming correct. Figure 1 below shows a number of different approaches that may be useful as starting points for identifying the areas that apply to you. Figure 1: Impact Analysis Major Areas Affected This figure gives a number of different frameworks that you can use as a starting point for Impact Analysis brainstorming. Pick the framework that's most relevant for you, "mix and match" them appropriately, and include other areas where they're more relevant. And remember as far as you can to involve the people most likely to be affected by the decision: They'll most-likely have more insight into the consequences of the decision than you have.

A. Organizational Approach: Impacts on different departments. Impacts on different business processes. Impacts on different customer groups. Impacts on different groups of people. B. McKinsey 7Ss Approach: Using the popular McKinsey 7Ss approach to thinking about the things that are important to an organization: Strategy. Structure. Systems. Shared Values. Skills. Styles. Staff. C. Tools-Based Approach: There's a lot of overlap here between Impact Analysis and some of the other tools we explain on Mind Tools, particularly Risk Analysis , Risk/Impact Probability Charts and Stakeholder Analysis . You can use the headings given within the Risk Analysis article as one set of starting points for brainstorming, and use Stakeholder Analysis for thinking about the people who might be affected by the decision. 3. Identify All Areas Now, for each of the major areas identified, brainstorm all of the different elements that could be affected. For example, if you're looking at departments, list all of the departments in your organization. If you're looking at processes, map out the business processes you operate, starting with the process the customer experiences, then moving on to the business processes that support this. The extent to which you're able to do this depends on the scale of the decision and the time available. Just make sure you go far enough, without getting bogged down in micro-detail. 4. Evaluate Impacts Having listed all of the groups of people and everything that will be affected in an appropriate level of detail, the next step is to work through these lists identifying and listing the possible negative and positive impacts of the decision, and making an estimate of the size of the impact and the consequences of the decision. 5. Manage the Consequences Now's the time to turn this information into action.

If you're using Impact Analysis as part of the decision making process, you need to weigh whether you want to go ahead with the project or decision proposed. You'll need to ask yourself whether it's worth going ahead with the project given the negative consequences it will cause and given the cost of managing those negative consequences. If you're managing a project which has already been given the go-ahead, you'll need to think about things like:

The actions you'll need to take to manage or mitigate these consequences. How you'll prepare the people affected so that they'll understand and (ideally) support change rather than fighting against it. The contingency strategy needed to manage the situation should the negative consequences arise. Tip: Remember that few changes happen in isolation. The effects they cause can be diminished or amplified by other things that are going on. When you are thinking about impacts, think about the context you're operating in, and also think about how people might react to the change and work with it or against it. - See more at: http://www.mindtools.com/pages/article/newTED_96.htm#sthash.9vakC7Os.dpuf

COST OVERRUN
A cost overrun, also known as a cost increase or budget overrun, is an unexpected cost incurred in excess of a budgeted amount due to an underestimation of the actual cost during budgeting. Cost overrun should be distinguished from cost escalation, which is used to express an anticipated growth in a budgeted cost due to factors such as inflation. Cost overrun is common in infrastructure, building, and technology projects. For IT projects, an industry study by the Standish Group found that the average cost overrun was 43 percent; 71 percent of projects were over budget, exceeded time estimates, and had estimated too narrow a scope; and [1] total waste was estimated at $55 billion per year in the US alone. Many major construction projects have incurred cost overruns. The Suez Canal cost 20 times as much as the earliest estimates; even the cost estimate produced the year before construction began underestimated the project's actual costs by a factor of three. The Sydney Opera House cost 15 times more than was originally projected, and the Concorde supersonic aeroplane cost 12 times more than predicted. The Channel Tunnel between the UK and France had a construction cost overrun of 80 percent, and a 140-percent financing cost overrun. Three types of explanation for cost overrun exist: technical, psychological, and political-economic. Technical explanations account for cost overrun in terms of imperfect forecasting techniques, inadequate data, etc. Psychological explanations account for overrun in terms of optimism bias with forecasters. Scope creep, where the requirements or targets rises during the project, is common. Finally, political-economic explanations see overrun as the result of strategic misrepresentation of [2] scope or budgets.

Scope creep
From Wikipedia, the free encyclopedia

This article is about project management. For the firearms term, see telescopic sight. Scope creep (also called requirement creep and feature creep) in project management refers to uncontrolled changes or continuous growth in a projects scope. This can occur when the scope of a project is not properly defined, documented, or controlled. It is generally considered harmful.

Typically, the scope increase consists of either new products or new features of already approved product designs, without corresponding increases in resources, schedule, or budget. As a result, the project team risks drifting away from its original purpose and scope into unplanned additions. As the scope of a project grows, more tasks must be completed within the budget and schedule originally designed for a smaller set of tasks. Accordingly, scope creep can result in a project team overrunning its original budget and schedule. If budget, resources, and schedule are increased along with the scope, the change is usually considered an acceptable addition to the project, and the term scope creep is not used. Scope creep can be a result of:

poor change control lack of proper initial identification of what is required to bring about the project objectives weak project manager or executive sponsor poor communication between parties

Scope Change is an official decision made by the project manager and the client to change a feature X to expand or reduce it's functionality. Generally, scope change involves making adjustments to the cost, budget, other features, or the timeline. On the other hand, Scope Creep is generally referred to as the phenomenon where the original project scope to build a product with feature X, Y, and Z slowly grows outside of the scope originally defined in the statement of work. Scope creep refers to scope change which happens slowly and unofficially, without changing due dates or otherwise making adjustments to the budget.

ORGANIC VS INORBANIC GROWTH

When you start a small business, you must focus on growing your customer base, reinvesting profits in new assets for greater income, and improving productivity to increase your bottom line. All of these efforts are examples of organic growth. You can grow your company through inorganic growth by merging with another company or buying another company. This can give you a larger customer base and new channels of distribution that can result in accelerated growth.

Advantages of Organic Growth

When you grow your business through strong management and effective planning, you know your business inside and out. You can move quickly to take advantage of changes in the marketplace, and you can experience the satisfaction of seeing your vision come to fruition. You also have the choice of growing your business at a rate that is comfortable for you. Instead of merging with another company or buying one, you can sell your business when it is mature. This can create profit for you.

Advantages of Inorganic Growth

Growing your business inorganically involves joining with another business through a merger or an acquisition. This immediately expands your assets, your income and your market presence. You will have a stronger line of credit because of the combined value of the two businesses. You will also benefit from the added expertise from personnel at the new business.

Related Reading: Business Growth Planning

Disadvantages of Organic Growth

You may have limited resources for growing your own business. You may also find that the marketplace will not allow you to grow beyond a certain point. In addition, your plans for your own growth can be thwarted by competition, causing you to cut back expectations and consider the possibility of having to close down due to limited opportunities. Growing a business from the start-up stage means constantly struggling to make sure you have positive cash flow in order to pay your bills and payroll, as well as finding ways to grow sales. While these concerns exist if you join with another company, the larger size of the combined organization provides better cash flow and sales growth because of a larger customer base.

Disadvantages of Inorganic Growth

You will have to expand your management capabilities dramatically when you join forces with another business. You will suddenly have many more employees and more assets to monitor, use and dispose of as your business needs change. In addition, you may grow in directions that you didnt anticipate. In effect, the focus of the second business can take over the vision you had when you started your business. You may enter areas of the marketplace where you have no expertise. You can also grow too fast. Most mergers and acquisitions require financing, and you will have to service your debt from the growth you experienced with the merger or acquisition. If your calculations about increased income are inaccurate, you may find yourself strapped with a debt you have difficulty repaying.

Granularity
From Wikipedia, the free encyclopedia

Granularity is the extent to which a system is broken down into small parts, either the system itself or its description or observation. It is the extent to which a larger entity is subdivided. For example, a yard broken into inches has finer granularity than a yard broken into feet. Coarse-grained systems consist of fewer, larger components than fine-grained systems; a coarsegrained description of a system regards large subcomponents while a fine-graineddescription regards smaller components of which the larger ones are composed. The terms granularity, coarse, and fine are relative, used when comparing systems or descriptions of systems. An example of increasingly fine granularity: a list of nations in the United Nations, a list of all states/provinces in those nations, a list of all cities in those states, etc. The terms fine and coarse are used consistently across fields, but the term granularity itself is not. For example, in investing, more granularity refers to more positions of smaller size, whilephotographic film that is more granular has fewer and larger chemical "grains".

hired gun (h rd)

n. Slang 1. One, especially a professional killer, who is hired to kill another person. 2. One hired to fight for or protect another. 3. One who is proficient at obtaining power for others. 4. One with special knowledge or expertise, as in business, law, or government, who is hired to resolve particularly difficult or complex problems.

band aid approach

Hasty solution that covers up the symptoms but does little or nothing to mitigate the underlying problem. See also quick fix.
The band-aid approach has been the most common solution to working with students at risk. The name for this approach comes from the purpose of a band-aid; to cover up a problem but not fix it. A problem with this resolution is only having half-day sessions focusing on one topic for these students. This is not helping in the end because for the other half of the day, when they are in their regular classroom settings, this type of attention and teaching is not practiced (Finn, 1998). Thus, this is considered a band-aid approach because it only temporarily conceals the problem without fixing it.

The Advantages of a Tightly Integrated Supply Chain

by Chirantan Basu, Demand Media
A tightly integrated supply chain for a small or large business is a network of businesses and contractors that provide raw materials, transportation, manufacturing, distribution, warehousing and retailing services. Businesses rely on efficient supply chains to provide a high level of customer service, while meeting sales and profit targets. Information technologies, including enterprise resource planning systems, are at the core of integrated supply chains.

Flexibility
Tight supply chain integration gives management operational flexibility to respond rapidly to external events, such as the actions of competitors and changes in customer demand. Companies can gather intelligence through their supply chains, which allows them to be generally aware of what their competitors are planning months in advance. For example, if a competitor launches a new product, an electronics manufacturer could leverage its integrated supply chain to source the parts, activate a marketing plan and rush a prototype from the design stage to the launch stage in a few weeks.

Inventory Management
Integrated supply chains improve inventory management, which means fewer overstocked and understocked conditions. Overstocking may result in higher storage costs and product obsolescence, while understocking could mean losing customers to competitors. Tight integration means that retailers can quickly adjust their inventory orders weeks or months in advance of anticipated changes in customer demand to ensure that the right amount of stock is on hand. Speed is essential in global supply chains because raw materials and finished goods are often transported over long distances. Tightly integrated supply chains also facilitate just-in-time manufacturing, in which companies assemble and manufacture products as the orders come in. Related Reading: What Are the Four Elements of Supply Chain Management?

Profit Margins
Operating flexibility and tight inventory management lead to a lower cost structure, which results in higher profit margins. By responding rapidly to changes in the competitive and customer environments, small businesses are able to remain competitive and maintain or grow their top and bottom lines. Tight integration provides companies with visibility not only into their own operations but also into their suppliers' operations, which allows for collaborations on reducing costs and driving margins.

Considerations

Tightly integrated supply chains can serve as early warning systems. For example, if a supplier is experiencing cash flow problems, customers will find out quickly and they can start making alternative arrangements. Some customers may step in and loan the supplier some working capital so that they can continue operating. Supply chain integration usually involves upfront costs and disruptions in operations as people are trained on new information systems.

Key Difference: Gantt charts and PERT charts are visualization tools that project and breakdown the tasks along with the time it takes to do the particular task. Gantt chart is represented as a bar graph, while PERT chart is represented as a flow chart.
Gantt charts and PERT charts are visualization tools that project and breakdown the tasks along with the time it takes to do the particular task. These are time management tools that are used by managers and administrators to display tasks that are required for project completion. The charts schedule, control and administer the tasks that are set by the manager.

A Gantt chart is a bar graph that was introduced by Henry Gantt and is used to illustrate a project schedule. Gantt developed the chart during the 1910-1915s. The chart shows the start dates, end dates and individually breaks down the project into smaller tasks. Select Gantt charts also show the dependency relationships between activities. This chart is also used in Information Technology to show data that has been collected. A tool similar to this chart was developed in 1896 by Karol Adamiecki and was named harmonogram; however Adamiecki didnt publish his chart until 1931 and even then only in Polish, limiting its adaptation in other countries. Gantt charts have become a popular tool in many companies around to world as a work breakdown structure (WBS) chart. The chart shows a horizontal bar which represents the task, while the length of the bar shows the time required to complete the task. On an x-y axis, the x axis represents the time for project completion. Independent tasks are connected using arrows, which show the relationship between two independent tasks. The relationship stems from the dependency of one task on another, where one task must be finished in order to being the other task. A limitation of the Gantt chart is that they do not efficiently represent the dependency of one task to another. Gantt charts are also limited to small projects and are not effective for projects with more than 30 activities.

The Program Evaluation and Review Technique (PERT) chart is statistical tool that is used in project management that is similar to the Gantt chart. This chart is a flow chart. PERT charts are also designed to analyze and represent the tasks involved in completing a given project. They were developed by the United States Navy in the 1950s and are commonly used with the critical path method (CPM). The PERT chart also analyzes the various different tasks involved in a project and the time it will take to complete each task and subsequently the whole project. PERT was initially developed to simplify the planning and scheduling of large and complex projects. It was designed for the US Navy's Polaris nuclear submarine project. PERT charts can manage large projects that have numerous complex tasks a very high inter-task dependency. The charts have an initiation node, which further stems into a network of individual tasks. PERT chart are popular for projects that require an assembly line and also represent the relationship between different tasks that are required to complete the project. The PERT chart has numerous interconnecting networks of independent tasks. The events in a PERT chart are in logical sequence so that no other task can begin until the previous task is completed. A PERT chart may have multiple pages with many sub-tasks. PERT chart is useful when trying to manage multiple tasks that will occur simultaneously. This chart is a bit complicated to use and are often used with Gantt charts in order to simplify the tasks better.