Tag: Introduction

  • Monopoly; Introduction, Meaning, Concept, and Features

    Monopoly; Introduction, Meaning, Concept, and Features

    Understanding Monopoly: Explore the concept of monopoly and its impact on markets. Learn how a single seller dominates an industry and affects prices. Introduction; Monopoly is defined as a single seller or credit in the market. The monopoly refers to a market situation in which there is only one seller of a particular product. This means that the firm itself is the industry and the firm’s product has no close substitute. The monopolist is not bothered about the reaction of rival firms since it has no rival. So the demand curve faced by the monopoly firm is the same as the industry demand curve.

    Here are economics explain Monopoly; Introduction, Meaning, Concept, and Features.

    Three features characterize a monopoly — a market in which there is only one supplier. First, the firm is in it’s in motivated by profits. Secondly, it stands alone and barriers prevent new firms from entering the industry; and thirdly, the actions of the monopolist itself affect the market price of its output—it is not a price-taker.

    Can there be a complete monopoly in the real commercial world? Some economists feel that by maintaining some barriers to entry a firm can act as the single seller of a product in a particular industry. Others feel that all products compete for the limited budget of the consumer. Therefore, no firm, even if it is the only seller of a particular product, is free from competition from the sellers of other products. Thus complete monopoly does not exist in reality.

    The monopolist is the sole seller of a particular product. Therefore, if the monopolist is to enjoy excess profit in the long run that must exist certain barriers to the entry of new firms into the industry. Such barriers may refer to any force which prevents rival firms (competing producers) from enter­ing the industry.

    What is the Meaning of the term Monopoly?

    Monopoly is said to exist when one firm is the sole producer or seller of a product which has no close substitutes. Three points are worth noting in this definition. First, there must be a single producer or seller of a product if there is to be a monopoly. This single producer may be in the form of an individual owner or a single partnership or a joint-stock company.

    If many producers are producing a product, either perfect competition or monopolistic competition will prevail depending upon whether the product is homogeneous or differential. On the other hand, when there are few producers or sellers of a product, oligopoly is said to exist. If then there is to be a monopoly, there must be one firm in the industry. Even literally monopoly means one seller.

    “Mono” means one and “Poly” means the seller. Thus monopoly means one seller or one producer. But to say that monopoly means one seller or producer is not enough. A second condition which is essential for a firm to be called monopolistic is that no close substitutes for the product of that monopolistic firm should be available in the market.

    Meaning of Monopoly:

    The word monopoly has been deriving from the combination of two words i.e., “Mono” and “Poly”. Mono refers to a single and poly to control. In this way, the monopoly refers to a market situation in which there is only one seller of a commodity. There are no close substitutes for the commodity it produces and there are barriers to entry. The single producer may be in the form of an individual owner or a single partnership or a joint-stock company.

    In other words, under a monopoly, there is no difference between firm and industry. The monopolist has full control over the supply of the commodity. Having control over the supply of the commodity he possesses the market power to set the price. Thus, as a single seller, the monopolist may be a king without a crown. If there is to be a monopoly, the cross elasticity of demand between the product of the monopolist and the product of any other seller must be very small.

    Definition of Monopoly:

    The following definitions are below;

    1. According to Bilas as;

    “Pure monopoly is represented by a market situation in which there is a single seller of a product for which there are no substitutes; this single seller is unaffected by and does not affect the prices and outputs of other products sold in the economy.”

    2. According to Koutsoyiannis as;

    “Monopoly is a market situation in which there is a single seller. There are no close substitutes of the commodity it produces, there are barriers to entry.”

    3. According to A. J. Braff as;

    “Under pure monopoly, there is a single seller in the market. The monopolist demand is market demand. The monopolist is a price-maker. Pure monopoly suggests no substitute situation.”

    Concept of Monopoly:

    Analysis of the working of a competitive system was the main task done by classical economists such as Adam Smith, David Ricardo, and J.S. Mill. Considering the earlier views, later economists of the 19th century developed the “ideal” system of perfect competition. Many economists, since the time of Adam Smith, were more interested in theoretical perfections than in the actual development of the capitalist system. They tried to explain the meaning of an economic system based on the model of perfect competition.

    According to them, perfect competition would mean;

    • Production at the minimum possible cost, and.
    • Consumer satisfaction at its maximum.

    But in real words, we hardly come across such a system of perfect competition. The exception to perfect competition which attracted serious attention during the 19th century was the concept of monopoly. This is in fact, the antithesis of perfect competition.

    Monopoly market is one in which there is only one seller of the product having no close substitutes. The cross elasticity of demand for a monopolized product is either zero or negative. There being only one firm, producing that product, there is no difference between the firm and industry in case of monopoly. Monopoly is a price maker, not the price taker.

    In the words of Koutsoyiannis, “Monopoly is a market situation in which there is a single seller, there are no close substitutes for the commodity it produced there are barriers to entry of other firms”.

    Features of Monopoly:

    The following are the features of a monopoly;

    One seller of the product.

    In the case of a monopoly, there is only one seller of the product. He may be a sole proprietor or a partnership firm or a joint stock company or a state enterprise. There is no difference between firm and industry. The firm is a price maker and not a price taker.

    No close substitute.

    The commodity which the monopolist produces has no close substitutes. Lack of substitutes means no other firm in the market is producing the same type of commodity.

    Restriction no entry of the new firm.

    There are powerful restrictions to the entry of new firms in the industry, under the Monopoly. There are either natural or artificial restrictions on the entry of firms into the industry, even when the firm is making abnormal profits.

    Monopoly is also an Industry.

    Under monopoly, there is only one firm which constitutes the industry. Difference between firm and industry comes to an end.

    Price Maker.

    Under monopoly, the monopolist has full control over the supply of the commodity. But due to a large number of buyers, the demand of any one buyer constitutes an infinitely small part of the total demand. Therefore, buyers have to pay the price fixed by the monopolist.

    Monopoly explain – For instance;

    There is one firm in India which produces “Binaca” toothpaste but this firm cannot be called monopolist since there are many other firms which produce close substitutes of Binaca toothpaste such as Colgate, Promise, Forhans, Meclean, etc. These various brands of toothpaste compete with each other in the market and the producer of any one of them cannot say to have a monopoly.

    Prof. Bober rightly remarks,

    “The privilege of being the only seller of a prod­uct does not by itself make one a monopolist in the sense of possessing the power to set the price. As one seller, he may be a king without a crown.”

    We can express the second condition of monopoly in terms of cross elasticity of demand also. Cross elasticity of demand shows a change in the demand for a good as a result of the change in the price of another good. Therefore, if there is to be monopoly the cross elasticity of demand between the product of the monopolist and the product of any other producer must be very small. The fact that there is one firm under monopoly means that other firms for one reason or other are prohibiting to enter the monopolistic industry.

    In other words, strong barriers to the entry of firms exist wherever there is one firm having sole control over the production of a commodity. The barriers which prevent the firms to enter the industry may be economic in nature or else of institu­tional and artificial nature. In the case of monopoly, barriers are so strong that prevent the entry of all firms except the one which is already in the field.

  • What does Materials? Meaning, Control and Objectives

    What does Materials? Meaning, Control and Objectives

    Introduction; The term “Materials” refers to the raw materials used for production, subassemblies and fabricated parts. Also, define as “anything that can store stock or stockpiled”. The terms “materials” and “stores” are sometimes used interchangeably. However, both terms differ. The term “stores” has a wider meaning and includes not only the raw materials used in production but also other items held in stock in the storeroom, such as components, tools, patterns, maintenance material, consumable stores, etc.

    Here are explain; What does Materials? Introduction, Meaning, Control and Objectives.

    It also includes stock of finished goods and partly finished goods. “Consumable” stores are items used in, production but do not become a part of the finished product, such as oil, grease, sandpaper, soap, and other cleaning materials, etc. Material is a chemical substance or mixture of substances that constitute an object. The material can be pure or impure, living or non-living matter. They can classify based on their physical and chemical properties, or their geological origin or biological function.

    Materials science is the study of materials and their applications. Raw material can process in different ways to influence their properties, by purification, shaping or the introduction of other materials. New material can produce from raw material by synthesis.

    Dressmaker making the dress by Materials
    Dressmaker making the dress by Materials. #Pixabay.

    Meaning of Materials:

    The term “Material” refers to the raw material used for production, subassemblies and fabricated parts. Material control is the main component of the process of material management. Control over material is of utmost importance for the smooth and uninterrupted functioning of an organization.

    A few definitions of the term is given as under:

    “Material control is a systematic control over purchasing, storing and consumption of materials, to maintain a regular and timely supply of materials, at the same time, avoiding overstocking.”

    Another definition;

    “Material control refers to the management function concerned with the acquisition, storage, handling and use of materials to minimize wastage and losses, derive maximum economy and establish responsibility for various operations through physical checks, record keeping, accounting, and other devices.”

    In simple words, material control refers to the various measures adopted to reduce the amount of loss of material at the time of receiving, storing and issuing the raw material. Material control in practice is exercised through periodical records and reports relating to purchase, receipt, inspection, storage and issuing direct and indirect material. Proper control over material can contribute substantially to the efficiency of a business.

    What does Materials Introduction Meaning Control and Objectives
    What does Materials? Introduction, Meaning, Control and Objectives. Wool Materials #Pixabay.

    Concept and Objectives of Materials Control:

    Material form an important part of the cost of a product and, therefore, proper control over material is necessary. No cost accounting system can become effective without proper and efficient control of the material. As well as, Materials control aims at efficient purchasing of material, efficient storing and efficient use or consumption.

    Material or inventory control may define as,

    “Systematic control and regulation of the purchase, storage and usage of materials in such a way that maintains a smooth flow of production and at the same time avoids excessive investments in inventories. Efficient material control cuts out losses and wastes of materials that otherwise pass unnoticed”.

    The broad objectives of material control are below:

    • It eliminates the problem of understocking and, therefore, the material of the desired quality will available when the need for efficient and interrupt production.
    • The material will purchase only when the need exists. Hence, it avoids the chances of over-stocking.
    • By purchasing material at the most favorable prices, the purchase can make a valuable contribution to the reduction in cost.
    • Material is protecting against loss by fire, theft; handling with the help of proper physical controls.
    • Issues of material are properly authorizing and accounting for.
    • Vouchers will approve for payment only if the material has been receiving and is available for the issue.
    • Material is, at all times, charge as the responsibility of some individual.

    Knitting product makes by Dressmaker
    Knitting product makes by Dressmaker. #Pixabay.

    Objectives of Materials Control:

    The following are the main objectives of materials control:

    To the availability of Materials:

    There should be a continuous availability of all types of materials in the factory so that the production may not be held up for want of any material. Also, the minimum quantity of each material is fixing to permit production to move on schedule.

    To reasonable Price:

    While purchasing materials, it is seen that it is purchasing at a reasonably low price. Quality is not to sacrifice at the cost of the lower price. The material purchase should be of that quality alone which is a need.

    To enable uninterrupted production:

    The main object of material control is to ensure smooth and unrestricted production. Production stoppages and production delays cause substantial loss to a concern.

    To ensure the requisite quality of materials:

    The quality of finished products depends mainly on the quality of the raw material used. If the quality of the raw material is not up to desired standards, the end product will not be of the quality of the desires which affects the sale of the product in the market resulting in loss of profits as well as the goodwill of the concern. It is of vital importance to exercise strict control and supervision over the purchases, storage, and handling of material.

    To minimize wastage:

    The loss of material may occur on account of rust, dust, dirt or moisture, bad and careless handling of material, poor packing and many other reasons. The causes responsible for such losses must be brought to light and utmost efforts should make to minimize the wastage of raw material. This is possible only by introducing an efficient materials control system. There should be minimum possible wastage of materials while these are being stored in the go-downs by storekeepers or used in the factory by the workers.

    Wastage should allow up to a certain level known as the normal level of wastage and it should not exceed that level. Leakage or theft of material must avoid keeping the cost of production under control. Storekeepers and workers should train to handle the material in a scientific way to avoid wastage. Also, the storekeeper is to keep the stores neat and tidy to avoid the wastage due to rust, dust or dirt.

    To fix responsibility:

    A proper system of materials control also aims at fixing the responsibility of operating units; and, also individuals connected with the purchase, storage, and handling of material.

    To provide information:

    Another objective of materials control is to provide accurate information regarding material cost; and, inventory whenever needed by management.

  • What does Labor cost? Introduction, Meaning, and Control

    What does Labor cost? Introduction, Meaning, and Control

    Labor costs represent human contribution. Labor cost is sensitive. The second Major element of cost in most of the manufacturing undertakings is labor cost. Proper accounting and control of labor costs, therefore, constitutes one of the most important problems of management. In controlling labor costs, the problem is complicated by the human element.

    Here are explain; What does Labor cost? Introduction, Meaning, and Control.

    Introduction: Under the present political conditions with restive labor in an organized industry, it is very difficult to reduce labor costs. Therefore, proper control and accounting for labor costs are one of the most important problems of a business enterprise. But control of labor costs presents certain practical difficulties unlike the control of material cost. The human element in labor makes difficult the control of labor costs whereas materials, being inanimate, could subject to rigid control.

    Labor is the most perishable commodity and as such should effectively utilize immediately. Labour, once lost, cannot recoup and is bound to increase the cost of production. On the other hand, materials, being durable, can use as and when required and can store without having to incur an immediate loss.

    Meaning of Labor Cost:

    Payment of remuneration to the workers for their service to the firm knows as labor payment. This is the second element of the total cost. It may be direct or indirect. If it treats as a direct expense, it will include prime cost and if it relates to the factory, it will treat as an item of factory cost. Direct labor costs or Direct wages represent the cost that is incurred directly to change the composition, form or condition of a product.

    Its primary nature is that it can easily identify and allocated to specific cost units. It also varies directly with the volume of production/output. Indirect labor costs, on the other hand, are the number of wages paid to workers who are not related to change the form, composition of a product but they engage themselves to complete the product, e.g. Supervisor’s Salary works office staff salaries, etc.

    Bakers Labor!
    Bakers Labor! #Pixabay.

    It is interesting to note that the difference between direct labor costs/direct wages and indirect labor costs/indirect wages depends on the types of work/job done and at the same time, the conditions in which cost of labor incurred. Under the circumstances, some labor costs treated as direct whereas the same treats as indirect in some other cases.

    So, they will treat as a direct one when; 1) the payment makes to the workers to change the composition of a product, and 2) identification of the job is possible. Similarly, labor costs will treat as indirect when; 1) the same is not directly related to change or form of a product, 2) identification is not possible.

    Control of Labour Cost:

    To control the cost of labor (both direct and indirect), it becomes necessary to study the behavior of labor, to control the attendance and departure of workers, measurement of performances, assessing the results, time and motion study, etc. It is the function of the management to control the cost of labor in every step whether the same is direct or indirect. Individual columns of timesheet and job cards should maintain direct and indirect labor costs for proper ascertaining and controlling the cost of labor.

    We know that direct labor costs/direct wages an element of prime cost whereas indirect labor costs/indirect wages an element of factory cost. Direct labor cost can control easily as it relates to variable cost which varies with the quantity produced, i.e. if more quantity produces with the same rate of remuneration, a post per unit must reduce. But it is not so easy to control the indirect labor cost.

    What does Labor cost Introduction Meaning and Control
    What does Labor cost? Introduction, Meaning, and Control. #Pixabay.

    Control over Labor cost:

    This is so because labor consists of a lot of different individuals, each with a different mental and physical capacity and each with a different personality.

    Proper control over it involves the following:

    • Appropriate systems for recruitment and selection, training and placement of workers.
    • Satisfactory methods of labor remuneration.
    • Healthy working conditions consistent with legal requirements and competitive undertaking.
    • Method of assuring efficient labor performance.

    Direct and Indirect Labor Costs:

    For accounting, they are classified into;

    1. Direct, and.
    2. Indirect.
    Direct Labor Cost:

    This cost incurs on the employees who engage directly in making the product. Their work can identify clearly in the process of converting. The raw materials into the finished product called direct labor costs. For example, wages paid to the workers engaged in the machining department, fabrication department, assembling department, etc.

    Construction Labor!
    Construction Labor; Direct and Indirect work! #Pixabay.

    Indirect Labor Cost:

    Indirect employees not directly associated with the conversion process. But assist in the process by way of supervision, maintenance, transportation of materials, material handling, etc. Their work benefits all the items being produced and cannot specifically identify with the individual products. Hence, the indirect labor cost should treat as production overhead. These costs will accumulate and apportion to different cost centers on an equitable basis and absorbed into product cost by applying the overhead absorption rates.

    Items of Labour Cost:

    They can analyze into the following:

    • Monetary benefits are payable immediately; Salaries and Wages, Dearness and other allowances, production incentive or bonus.
    • Monetary benefits after some time in the future; Employer’s contribution to P.F., E.S.I., Pension, Gratuity, Profit linked bonus, etc.
    • Non-monetary benefits (Fringe benefits); Free or subsidized food, free medical or hospital facilities, free or subsidized education to the employee’s children, free or subsidized housing, etc.
  • What is HRM (Human Resource Management)? Introduction, Meaning, and Definition

    What is HRM (Human Resource Management)? Introduction, Meaning, and Definition

    What is HRM? Human Resource Management is concerned with the “people” dimension in management. Introduction, Meaning, and Definition of HRM; Since every organization is made up of people, acquiring their services, developing their skills, motivating them to a high level of performance, and ensuring that they continue to maintain their commitment to the Organisation are essential to achieving organizational objectives.

    Here is the article to explain, HRM What is Human Resource Management? Introduction, Meaning, and Definition.

    This is true regardless of the type of Organisation Government, business, education, health, recreation, or social action. Those organization that is able to acquire, develop, stimulate and keep outstanding workers will be both effective, able to achieve their goals, and efficient (expanding the least amount of resources necessary). Those organization that is inefficient and ineffective risk the hazards of stagnating or going out of business.

    Definition of HRM:

    The following definitions below are;

    According to Thomas G. Spates,

    “HRM is a code of the ways of organizing and treating individuals at work so that they will get the greatest possible realization of their intrinsic abilities, thus attaining maximum efficiency for themselves and their group and thereby giving to the enterprise of which they are a part its determining competitive advantage and its optimum results.”

    George Terry has succinctly stated that HRM is concerned with the obtaining and maintaining of a satisfied workforce. He further clarified that HRM is concerned with maximizing the effectiveness of the workforce through the application of sound and proved personnel policies and practices.

    According to Dale Yoder,

    “HRM is the function or activity aiding and directing working men and women in maximizing their contributions and satisfaction in employment. It helps ‘workers’ including all those who work, from unskilled common laborers to corporation presidents or public administrators, – combine their efforts with those of others in providing the administrators – combine their efforts with those of others in providing the services and products we all want.”

    In the words of Flippo, HRM is the planning organizing, directing, and controlling of the procurement, developments, compensation, integration and maintenance and separation of human resources to the end that individual, organizational and societal objective are accomplished.

    According to the process system view, human resources management is the systematic planning, development, and control of a network of the interrelated process affecting and involving all members of the organization.

    HRM Processes;

    These processes include:

    • Human resources planning.
    • Job and work design.
    • Staffing.
    • Training and development.
    • Performance appraisal and review.
    • Compensation and reward.
    • Employee protection & representation, and.
    • Organization improvement.

    According to another view, human resource management refers to the practices and policies; Also, you need to carry out the people aspects of your management job.

    These includes:

    • Conducting a job analysis.
    • Planning labor needs and recruiting candidates.
    • Also, Selecting job candidates.
    • Orienting and training new employees.
    • Managing wage and salaries.
    • Providing incentives and benefits.
    • Appraising performance.
    • Also, Communicating.
    • Training & development, and.
    • Building employee commitment.

    To effectively manage these process, human resources systems are planned, developed and implemented through the combined efforts of all managers and human resources specialists – and frequently all employees – in an organization. Overall, the systems are intended to achieve organization-wide goals and contribute to organizational effectiveness and productivity.

    From the foregoing definitions it may be concluded that there is no standard definition of the term ‘HRM’, some authorities have defined it in terms of its functions, some others in terms of its objects and some in terms of human relationships.

    What is HRM (Human Resource Management) Introduction Meaning and Definition
    What is HRM (Human Resource Management)? Introduction, Meaning, and Definition. #Pixabay.

    The elements of HRM:

    However, there are certain elements which are common to most of these hrm definitions:

    First elements:

    HRM aims at getting the best results out of the employees. In other words, it has the overall goal of securing the optimum contribution from the human factor in business.

    Second elements:

    It does not, however, follow from above that this modem branch of business management is geared to the exploitation of the employees. Also, Good HRM helps the employees develop their capacities to the full and derive the greatest satisfaction from their work. It, thus, looks to their needs, comforts, and grievances, As Scott, Clothier and Sprieged put it, four different angles or elements of the employee-in his-work unit must be given due consideration.

    There are:

    • Capacities; referring to those abilities, to those attainments, inherited or acquired, that a worker has, is capable of exercising, and must, to a certain degree at least, an exercise in his work.
    • Interest; not only an individual’s desires, and ambitions, but also his instinctive, impulsive tendencies, vague, bearing, and ill-defined carvings that may or may not stir him to his fullest action in performing his duties.
    • Opportunities; not only opportunities for advancement, although, that is including, opportunities to exercise his capacities and satisfy his interests also.
    • Personality; the total of a worker’s reaction to his experiences and environment. Personality is manifest by an individual’s reception by others. Also, Management has only a minor role in influencing personality; but the worker’s personality has a great influence on his opportunities.
    Third elements:

    Good HRM aims at promoting group satisfaction, building up what is known as team spirit, because it is the joint effort that is more important.

    Forth elements:

    The work-related to human resources is of a continuous nature. In George Terry’s words, it cannot turn on and off like water from a faucet; it cannot practice only one hour each day or one day a week. Also, It requires constant alertness and awareness of human relations and their importance in everyday operations it is, thus, a way of approach, a technique of thinking, a philosophy of management which has to be kept in view at all times and at different levels of the organization.

    Thus, human resource management refers to the set of programs, functions, and activities designed and carried out to maximize both employees and organizational effectiveness.

  • Market Segmentation; Introduction, Definition, Benefits, and Criteria

    Market Segmentation; Introduction, Definition, Benefits, and Criteria

    What is Market Segmentation? Introduction; The economists while describing pure competition assume that all buyers are alike and consumer behavior is unidimensional based on the concept of the economic man model. Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on some type of shared characteristics. However, the psychologists recognize all buyers are different.

    Know and learn about the topic of Market Segmentation; Introduction, Definition, Benefits, and Criteria.

    Marketers recognize the importance of heterogeneous demand. Hence, they are keenly interested in subdividing or segmenting the market. A segment can be a group of people with similar or homogeneous demand and the enterprise can offer tailor-made marketing mix for each market segment or subdivision. A marketing segment is a meaningful buyer group having similar wants. Segmentation is a customer-oriented marketing strategy.

    Market segmentation gives formal recognition to the fact that the wants and desires of consumers are diverse and we can formulate a specific market offering to specific categories or segments of the market so that supply will have the best correlation with demand. Varied and complex buyer behavior is the root cause of market segmentation.

    Most companies operating on all India basis have divided the national markets into various zones of regions e.g. Northern India, Southern India, Eastern India, Western India, Central India, etc. These zones may further subdivide according to segments of markets. Segmentation or subdivision of the market is one of the basic strategies based upon the modern marketing concept.

    Meaning of Market Segmentation:

    Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on some type of shared characteristics.

    Segmentation gives special emphasis on the demand side of the market. The marketing effort is to tune with consumer or user needs and requirements. Segmentation implies the bending of supply to the will of demand as far as feasible and desirable. It recognizes that there are several demand schedules and not necessarily a single demand schedule or curve.

    For each demand schedule representing a group of buyers with similar needs and characteristics, marketers need to prepare separate and precise market offering or marketing mix. Market segmentation is a method for achieving a maximum market response from limited marketing resources by recognizing differences in the response characteristics of various parts of the market.

    In a sense, market segmentation is the strategy of “divide and Conquer”, i.e. dividing markets. Marketing strategy is adjusted to inherent differences in buyer behavior. For different groups of customers, i.e. market segments different sets of marketing strategies are developed.

    Definition of Market Segmentation:

    As the define Market segmentation is a process of dividing the entire market population into multiple meaningful segments based on marketing variables like demographics (age, gender, etc), geographic, psychographics (lifestyle, behavior), etc. Market segmentation in marketing is identifying a set of homogenous segments having similar needs, properties & demands which can use by a company to sell their product/service more effectively.

    Importance of Market Segmentation:

    Market segmentation is an important aspect for any business as it helps them slice the market into smaller groups or segments. Which can then identify base on their needs and can cater to? Market segmentation reduces the population in the market and gives a much more addressable audience rather than giving random groups of people.

    Having similar groups would enable companies to more focused in terms of their product offerings, product differentiation strategies, marketing strategies, pricing strategies, etc. This would help companies mitigate unnecessary risks, reduce costs, target customers better, have better retention and generate more profits. Hence, segmenting the entire population of the market is essentially critical for any business to prosper.

    Benefits of Market Segmentation:

    Market segmentation reflects reality in a marketing situation. Consumers have different needs and preferences. Hence, in reality, market demand is heterogeneous and not homogeneous. When differences in customer needs are analyzed, marketers can exploit the marketing opportunities and fulfills the needs.

    This can yield profits and prospects for growth. Segmentation ensures higher customer satisfaction and improves the effectiveness of the marketing program and enables the managers to charge a better price for their offer.

    Market segmentation offers the following specific benefits;

    • Marketers are in a better position to locate and compare marketing opportunities. The market can define more precisely in terms of customer needs.
    • When customer needs are fully understood, marketers can effectively formulate and implement marketing programs that will tune with the demands of the market.
    • Marketers can design their products and marketing communications as per the market segments and ensure more response.
    • Competitive strengths and weaknesses can assess effectively and marketers can avoid fierce competition and use resources more profitably by catering to customer demand which is not being met by rivals.
    • Since the customer is the focus of marketing effort segmentation leads to the more effective utilization of marketing resources. We can have precise marketing objectives. The marketing program is tailored exactly following the needs of a specific market segment, and product, price, and promotion can have the best coordination.

    Market Segmentation Introduction Definition Benefits and Criteria
    Market Segmentation; Introduction, Definition, Benefits, and Criteria. #Pixabay.

    Criteria for Segmentation:

    The following criteria below are;

    Measurability:

    The attributes selected for segmentation must be measurable demographic and socio-economic characteristics are objective and measurable. But personality, lifestyle and psychological factors governing buyer behavior such as motivation, perception, attitude are subjective and non-measurable attributes.

    In such situations, these non-measurable characteristics should link with tangible characteristics to achieve a meaningful segmentation. We can approximately identify members of the segment based on some common characteristics or behavior patterns. Obtaining data is not easy when the segment is defining in terms of benefit or behavioral characteristics.

    Accessibility:

    The segment identified should be within the reach marketers through suitable means of communication and distribution.

    Market Responsiveness:

    The identified segment must respond favorably to the marketing effort. To know whether correct segmentation has been achieving or not has paramount importance.

    Effective Demand:

    The segment must have a family big size of demand to make any marketing effort viable.

    Bases of Market Segmentations:

    There are many ways to group customers in segmenting the market. Broadly speaking, we have two main approaches to identify market segments.

    1. People-Oriented Approach (Also called customer personal characteristic approach): The customer can claim by various customer dimensions such as geographic location, demography, socio-economic characteristics, and psychographic characteristics.
    2. Product-Oriented Approach (also customer response approach): Customer response or buyer behavior may consider about product benefits, product usage, store patronage, and brand loyalty. This approach identifies the differences in buyer behavior to know why consumers buy a certain product. Also, buyer behavior involves psychological factors such as buying motives, attitudes, perceptions, preferences.
  • Production Management; Introduction, Meaning, and Function

    Production Management; Introduction, Meaning, and Function

    Production management (POM) is the management of an organization’s production systems, which converts inputs into the desired product and services. As they define; “It is the process of effective planning and regulating the operations of that section of an enterprise which is responsible for the actual transformation of materials into finished products.”

    Discuss each one of Production Management; Introduction, Meaning, and Function.

    They are a process of planning, organizing, directing, and controlling the activities of the production function in an organization to achieve the goals of an organization. A production system takes given inputs which include raw material, people, machines, tools, building, technology, cash, information, and other resources whereas the outputs include the product and services.

    Introduction to Production management:

    They are a branch of management that is related to the production function. Production may refer to as the process concerned with the conversion inputs (raw materials, machinery, information, manpower, and other factors of production) into output (semi-finished and finished goods and services) with the help of certain processes (planning, scheduling, and controlling, etc.) while management is the process of exploitation of these factors of production to achieve the desired results.

    Thus, they are the management which by scientific planning and regulation sets into motion the part of an enterprise to which it has been entrusted the task of actual transformation of inputs into output. They also deal with decision-making regarding the quality, quantity, cost, etc., of production.

    It applies management principles to production. They are part of business management. They also call it “Production Function.” It is slowly being replaced by operations management.

    Meaning of Production Management (POM):

    They refer to the application of management principles to the production function in a factory. In other words, POM involves the application of planning, organizing, directing, and controlling the production process.

    The application of management to the field of production has been the result of at least three developments:

    1. First is the development of the factory system of production. Until the emergence of the concept of manufacturing, there was no such thing as management as we know it. People indeed operated the business of one type or another, but for the most part, these people were owners of the business and did not regard themselves as managers as well,
    2. Essentially stems from the first, namely, the development of the large corporation with many owners and the necessity to hire people to operate the business,
    3. Stems from the work of many of the pioneers of scientific management who were able to demonstrate the value, from a performance and profit point of view, of some of the techniques they were developing.

    Definition of Production Management:

    It is observed that one cannot demarcate the beginning and endpoints of POM in an establishment. The reason is that it is interrelated with many other functional areas of business, viz., marketing, finance, industrial relation policies, etc. Alternately, Production Management is not independent of marketing, financial, and personnel management due to which it is very difficult to formulate some single appropriate definition of Production Management.

    A few definitions of production management are being reproduced hereunder to understand the meaning of the term clearly;

    “Production management then becomes the process of effectively planning and regulating the operations of that part of an enterprise which is responsible for the actual transformation of materials into finished products.”

    The definition seems to be quite incomplete. As it ignores the human factors involved in a production process and lays stress only on the materialistic features.

    Elwood S. Buffa has defined the term in a broader sense as;

    “Production management deals with decision making related to the production process so that the resulting goods or services are produced according to specifications in amounts and by the schedules demanded, and at a minimum cost.”

    Thus, POM concern with the decision-making regarding the production of goods and services at a minimum cost according to the demands of the customers through the management process of planning, organizing and controlling. To attain these objectives, effective planning and control of production activities are very essential. Otherwise, the customers shall remain unsatisfied, and ultimately certain activities may have to be closed.

    Tasks of Production:

    POM, thus, is assigned with the following tasks;

    • Specifying and accumulating the input resources, i.e., management, men, information, materials, machine, and capital.
    • Designing and installing the assembly or conversion process to transform the inputs into output, and.
    • Coordinating and operating the production process. So, the desired goods and services may produce efficiently and at a minimum cost.
    Production Management Introduction Meaning and Function
    Production Management; Introduction, Meaning, and Function. #Pixabay.

    Functions of Production Management:

    The definitions discussed above clearly shows that the concept of production management is related mainly to the organizations engaged in the production of goods and services. Earlier these organizations were mostly in the form of one-man shops having insignificant problems of managing the productions.

    But with development and expansion of production organizations in the shape of factories more complicated problems like location and layout, inventory control, quality control, routing and scheduling of the production process, etc. came into existence which required more detailed analysis and study of the whole phenomenon. This resulted in the development of POM in the area of factory management.

    In the beginning, the main function of production management was to control labor costs. Which at that time constituted the major proportion of costs associated with production. But with the development of the factory system towards mechanization and automation. The indirect labor costs increased tremendously in comparison to direct labor costs, e.g., designing and packing of the products, production and inventory control, plant layout and location, transportation of raw materials and finished products, etc. The planning and control of all these activities required more expertise and special techniques.

    What to do production functions?

    In modern times POM has to perform a variety of functions, namely:

    • Design and development of the production process.
    • Production planning and control.
    • Implementation of the plan and related activities to produce the desired output, and.
    • Administration and coordination of the activities of various components and departments responsible for producing the necessary goods and services.

    However, the responsibility of determining the output characteristics and the distribution strategy followed by an organization. Including pricing and selling policies are normally outside the scope of POM.

  • Communication; Introduction, Meaning, and Definition

    Communication; Introduction, Meaning, and Definition

    Introduction; Communication is important from the point of view of understanding it in terms of a process, system, interactional base, and structuring. There are various objectives of communication in business organizations. We are living in a world which is totally networked with communication. With the advent of fast technology, the world has become a global village.

    Discussion the topic Communication essay; Introduction, Meaning, and Definition.

    The information sharing among various groups in society at national and international levels has become very smooth, effective and efficient. With the click of the small button on a computer, you can easily get any information according to your needs and choice. You cannot just think of a world or situation where there is no exchange of ideas, feelings, emotions, reactions, propositions, facts and figures.

    From time immemorial, they have been the most important activities of human lives. The integration of the world economy has been made possible with a strong and efficient channel of communication. The nature of communication has gone a significant change during the last dealers. Now the economic power lies in the hands of the countries having very sound information technology network.

    Meaning and Definition of Communication:

    There are various definitions and meaning interpreted by different scholars. T.S. Matthews says that Communication is something so difficult that we can never put it in simple words. But we do need a definition to understand the concept. In his book Communication in Business, Peter Little defines communication as the process by which information is transmitted between individuals and/ or organizations so that an understandable response results. W.H. Newman and C.F. Summer Jr. define communication as, “Communication is an exchange of facts, ideas, opinions, or emotions by two or more persons”.

    “Administrative communication is a process which involves the transmission and accurate replication of ideas ensured by feedback for the purpose of eliciting actions which will accomplish organizational goals.”

    Obviously, “information” is the keyword in the first definition. But this definition does not indicate the objects about which information is to transmit. This is precisely what is provided in the second definition. They transmit information not only about tangible facts and determinable ideas and opinions but also about emotions. When a communicator passes on or transmits some information, he may also, either intentionally or unconsciously, be communicating his attitude or the frame of his mind. And sometimes the latter may be more relevant to the reality that is communicating.

    Communication Definition:

    The following definition offered by William Scott in his book “Organisation Theory” should appear comprehensive and especially satisfying to the students of “business communication” since it touches all aspects of the communication process:

    According to McFarland communication is,

    “a process of meaningful interaction among human beings. More specifically, it is the process by which meanings are perceived and understandings are reached among human beings.”

    Newman and summer defined as,

    “an exchange of facts, ideas, opinions or emotions by two or more persons.”

    This definition emphasizes four important points:

    1. The process of communication involves the communication of ideas.
    2. The ideas should accurately replicate (reproduce) in the receiver’s mind, i.e., the receiver should get exactly the same ideas as were transmitted. If the process of communications perfect, there will be no dilution, exaggeration or distortion of the ideas.
    3. The transmitter is assured of the accurate replication of the ideas by feedback, i.e., by the receiver’s response which communicated back to the transmitter. Here it suggested that communications a two-way process including the transmission of feedback.
    4. The purpose of all communications to elicit action.

    It is a quite comprehensive definition and covers almost all aspects of communication. But two comments can make on it:

    1. The concept of ideas should adequately enlarge to include emotions also.
    2. Even in administrative communication, the purpose may not always be to elicit action. Seeking information or persuading others to a certain point of view can be equally important objectives of communication.

    Nature of communi­cation:

    The exchange of information or passing of information, ideas or thought from one person to the other or from one end to the other is communication. Communication is the process of passing information from one person to another. The purpose of communication understands information. Whatever one wants to say to someone should clearly understand by him else the very purpose of the communication would defeat. In an organization, communication facilitates the flow of information and understanding between different people and departments through different media using all the channels and networks.

    This flow of information is vital for managerial effectiveness and decision making in general and for human resource manager in particular as he has to be in contact with the managers of various departments, employees and workers and trade union leaders. Communication thus helps understand people better removing misunderstanding and creating clarity of thoughts and expression. It also educates people.

    They may written or oral, formal, informal, and upward, downward, horizontal, diagonal, interpersonal, intrapersonal, interdepartmental, intra-organisational. Communication brings people together, closer to each other. Communications an important management function closely associated with all other managerial functions.

    It bridges the gap between individuals and groups through the flow of information and understanding between them. Information is the most vital aspect of communication. It is the information which is transmitted, studied, analyzed and interpreted and stored. The manager, therefore, has to spare time to collect, analyze and store the information for decision-making and routine day to day business.

    Communication Introduction Meaning and Definition
    Communication; Introduction, Meaning, and Definition. #Pixabay.

    Principles of Communication:

    In order to be effective and meaningful, the managerial function of communication essay must be guided by the following principles:

    Understanding:

    It must be such, as transmits the understanding of their message to the recipient as per the intentions of the sender. A practical application of this principle requires that the message must clearly express whether made orally or in writing. Further, the message must be complete – leaving no scope for any doubts likely to confuse the recipient and compel him towards a misinterpretation of the message.

    Attention:

    They must make in such a manner, that it invites the attention of the recipient to it. For a practical application of this principle, it is imperative that not only must the message expressed in a pleasant and sound manner; but also the purpose of the sender in making communication, must be absolutely clarified.

    Brevity:

    The message to communicated must be brief; as usually the recipient, especially an executive, would not have much time to devote to a single piece of communication. However, the brevity of the message must not be sought at the cost of clarity or completeness of the message. The sender must strike a balance among these three factors -brevity, clarity, and completeness.

    The Timeliness:

    They must be timely i.e. it must make at the high time when needed to communicate to the recipient. An advanced communication carries with it the danger of “forgetting”, on the part of the recipient; while a delayed communication loses its purpose and charm, and becomes meaningless when the right time for action on it has expired.

    The Appropriateness or Rationality:

    It must be appropriate or rational, in the context of the realization of organizational objectives. They must be neither impracticable to act upon; nor irrational, making no contribution to common objectives.

    Feedback:

    They must be a two-way process. The feedback (or reaction or response) of the recipient to the message, must be as easily transferable to the sender, as the original communication made by the sender. The idea behind emphasizing on the feedback aspect of communications that it helps the sender to modify his subsequent communications in view of the reactions of the recipient – making for better and improved human relations.

    The Constructive and Strategic Use of Informal Groups:

    The management must not hesitate in making constructive and strategic use of informal groups, for ensuring and facilitating speedier communication in emergency situations. Such use of informal groups would also help develop good human relations by upgrading the status of informal groups and their leaders. However, management must assure itself that rumors not spread by informal groups, and for this, a guard over the manner of functioning of informal groups, while transmitting a formal exchange, is but imperative.

  • Introduction to Wages: Meaning, Definition, Types, and Methods

    Introduction to Wages: Meaning, Definition, Types, and Methods

    What does it mean by Wages? A fixed regular payment earned for their services typically paid on an hourly, daily or weekly basis. Wage compensation pays to employees for work for a company during a period. Wages or labor charges always pay based on a certain amount of time, the article explains below along with their topics Meaning, definition, types, and methods. For example; Employees who receive labor charges cannot also receive a salary, but they can receive a commission. A commission is a payment for a specific action. Commissions are most commonly found in the sales industry. Salesmen and women often pay a base wage and then paid a commission based on how many sales they make during a period.

    Know and Understand the Wages and their Introduction, Meaning, Definition, Types, and Methods.

    Lower-level employees pay based on the amount of time worked. These employees usually have a timesheet or time card to keep track of the hours worked per week. Most modern employers have computerized systems to keep track of hourly employee hours. Employees must log into the system and log out to record their hours worked. Depending on the state, these employees then pay once a week or once every other week. Hourly employees must receive overtime benefits if they work more than 40 hours each week.

    Meaning of Wages:

    Wages are the reward paid to the worker for his labor. The term “labor”, as used in Economics, has a broad meaning. It includes the work of all who work for a living, whether this work is physical or mental.

    It also includes the exertions of independent professional men and women like doctors, lawyers, musicians and painters who render service for money. In fact, “labor” in Economics means all kinds of work for which a reward is paid. Any type of reward for human exertion whether paid by the hour, day, month or year and paid in cash, kind, or both call labor charges.

    Definition of Wages:

    Here are below the definition of wages defines by different authors.

    According to Benham;

    “A wage may be defined as the sum of money paid under contract by an employer to the worker for services rendered.”

    According to A.H. Hansen;

    “Wages is the payment to labor for its assistance to production.”

    According to Mc Connell;

    ‘Wage rate is the price paid for the use of labor.”

    According to J.R. Turner;

    “A wage is a price, it is the price paid by the employer to the worker on account of labor performed.”

    Types of Wages:

    Labor charges typically paid on an hourly, daily or weekly basis. In real practice, wages are of many types as follows, and also you’ll understand their methods below are:

    1] Piece Wages:

    Piece wages are the wage paid according to the work done by the worker. To calculate the piece wages, the number of units produced by the worker takes into consideration.

    2] Time Wages:

    If the laborer pays for his services according to time, it calls a time wage. For example, if the labor pays a dollar $5 per day, it will term as a time wage.

    3] Cash Wages:

    Cash wage refers to the labor charges paid to labor in terms of money. The salary paid to a worker is an instance of cash wages.

    4] Wages in Kind:

    When the laborer pays in terms of goods rather than cash, it calls the wage in kind. These types of wages are popular in rural areas.

    5] Contract Wages:

    Under this type, the wage fixes at the beginning of complete work. For instance, if a contractor tells that he will pay a dollar $5,000 for the construction of the building, it will term as contract wage.

    Understand the Nominal and Real Wages.

    The money paid to a worker as a reward for his work knows as a nominal wage. But what money wants for? Obviously for the goods and services it can buy. By ‘real wage’, we understand the satisfaction that a laborer gets from spending his money wage in the form of necessaries, comforts, and luxuries. It means the total benefits, whether in cash or kind, that a worker enjoys by working at a certain job.

    The following are the two main concepts of wage:

    • Nominal Wage.
    • Real Wage.

    Now explain;

    1] Money or Nominal Wages:

    The total amount of money received by the laborer in the process of production calls the money wage or nominal wage. The nominal or money value of labor charges express at current prices and is not adjusted for the effects of inflation. In contrast, the value of the wage or earning that someone earns each year expresses at constant prices and therefore have been adjusting to taking into account price changes.

    2] Real Wages:

    Real wages mean the translation of money wage’s into real terms or in terms of commodities and services that money can buy. They refer to the advantages of worker’s occupation, i.e. the amount of the necessaries, comforts, and luxuries of life which the worker can command in return for his services. An example will make things clear. Suppose “A” receives Dollar $100 p.m. as money wage’s during the year.

    Suppose also that midway through the year the prices of commodities and services, that the worker buys, go up, on average, by 50%. It means that though the money wage remains the same, the real wages (consumption basket in terms of commodities and services) reduce by 50%. Real wage’s also included extra supplementary benefits along with the money wage.

    Introduction to Wages Meaning Definition Types and Methods
    Introduction to Wages: Meaning, Definition, Types, and Methods, #Pixabay.

    Understand the Methods of Wage Payment.

    From the payment, wage’s can classify as:

    • Cash wages or wage’s in kind, according to as the payment makes in cash or kind.
    • Time wages, when the wage rate fixes per hour, per day or month.
    • Piece wages, when the worker pays according to the work done, and.
    • Task wages, which is a payment on a contract basis, i.e., payment for finishing a specified job.

    Wage’s give different names, e.g., salaries for the higher staff, pay to the lower staff like clerks and typists, wage’s for the workers, fees for persons in independent professions like lawyers and doctors, commission for middlemen, brokers, etc., and allowance for special work or special reasons, e.g., traveling allowance, dearness allowance, etc.

  • Introduction to Exit Value Accounting, Meaning, and Definition

    Introduction to Exit Value Accounting, Meaning, and Definition

    Introduction of Exit Value Accounting; Exit value accounting is a form of current cost accounting which is based on valuing assets at their net selling prices (exit prices) at the balance sheet date and on the basis of orderly sales. Exit value is a maximum price a currently held asset could be sold for in the market less the transactions costs of the sale (the net realizable value for the asset). What is Economic Value Added? Definition, Calculation, and Implementation.

    Know and understand the Exit Value Accounting.

    This normative accounting theory was developed by Raymond Chambers and labeled as Continuously Contemporary Accounting (CoCoA). The theory relies on assessments of the exit or selling price of an entity’s liabilities and assets. These values are usually calculated under the assumption that the entity which controls. The thing being valued would be going out of business and liquidating.

    By contrast, real-world values for things sold by companies which remain in business can be very different. Because these companies can afford to hold out for a good price and they are not liquidating large amounts of goods. And, alerting buyers to the fact that bargains may be obtainable with a little bit of negotiation.

    In addition, the profit for a certain time should also be related to the alteration of the current exit-prices of the assets and hence. Profit should reflect changes in an organization’s capacity to adapt. The benefit of exit value accounting system is the relevance of the information it provides.

    With this approach, the balance sheet becomes a huge statement of the net liquidity available to the enterprise in the ordinary course of operations. It thus portrays the firm’s adaptability, or the ability to shift its presently existing resources into new opportunities.

    Meaning and Definition of Exit Value Accounting:

    The exit value accounting theory was developed under the following key assumptions. Firstly, firms exist to increase the owners’ wealth. Secondly, the organization’s ability to adapt to changing circumstances is the basis of successful operations and Finally, the capacity to adapt will be best reflected by the monetary value of the organization’s assets, liabilities, and equities at balance date. Where the monetary value is based on the current exit or selling prices of the organization’s resources.

    All assets in the exit-price accounting should be recorded at their current cash equivalents. Which represented by the amounts expected to be generated by selling the assets and an orderly sale determine the net-sales or exit-prices. Depreciation costs would not be realized within exit-price accounting as the model is based on the current cash equivalents.

    Liabilities would be similarly valued at the amounts it would take to pay them off as of the statement date. The income statement for the period would be equal to the change in the net realizable value of the firm’s net assets occurring during the period, excluding the effect of capital transactions.

    Expenses for such elements as depreciation represent the decline in net-realizable value of fixed assets during the period. The exit value accounting model is based on immediate sale. Which seems under the control of the entity although some estimation of the future may be included. As a result, the asset does not contribute to an entity’s capacity to adapt to changing circumstances if it is not ready to sell (as it does not have a sales price).

    What is Fair value?

    As know, Fair Value; In accounting and in most Schools of economic thought, fair value is a rational and unbiased estimate of the potential market price of a good, service, or asset.

    Introduction to Exit Value Accounting Meaning and Definition
    Introduction to Exit Value Accounting, Meaning, and Definition, #Pixabay.

    Explanation of Exit Value:

    Exit value is the estimated price which would be received for the sale of an asset or transfer of a liability on the open market. People determine exit values for accounting purposes and these values may be used in a variety of ways. Exit values are distinct from entry values, which reflect the price which would be paid to acquire something. Several different methods can be used to think about exit value. People can look at the present value of the asset, the current selling price, or the net realizable value.

    Because times are not always favorable for sales, one important thing to consider is what the current market conditions are. If the market is poor an exit value may be low because it is determined by acting. As though something needs to be sold immediately and thus a strategic wait for a better price is not possible. Exit values can be used in the assessment of a business by a valuator. A determination of a fair asking price, and a number of other settings.

    When calculating exit value, third-party evaluators are often used to avoid bias. The person who owns the asset or liability under consideration may be inclined to overvalue it or otherwise fail to estimate the value properly. While someone who has no interest in the value can make a more neutral estimate.

  • What does Competitive Intelligence (CI) mean? Introduction, Meaning, and Definition

    What does Competitive Intelligence (CI) mean? Introduction, Meaning, and Definition

    Competitive Intelligence (CI): CI means understanding and learning what is happening in the world outside the business to increase one’s competitivity. What does Competitive Intelligence (CI) mean? Introduction, Meaning, and Definition with PPT. It means learning as much as possible, as soon as possible, about one’s external environment including one’s industry in general and relevant competitors.

    Know and Understand the Concept of Competitive Intelligence (CI).

    Competitive intelligence (CI) is the coordinated and purposeful monitoring of competitors, products and customers in a specific marketplace or industry. This data is used by managers and executives to make better strategic decisions for an organization. Competitive intelligence includes the action of gathering data and defining the subsequent distribution of intelligence about services, products, customers and even competitors.

    CI is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors, and any aspect of the environment needed to support executives and managers in strategic decision making for an organization.

    Introduction to Competitive Intelligence (CI):

    According to the medical dictionary, Intelligence is the potential ability to acquire, retain, and apply experience, understanding, knowledge, reasoning, and judgment in coping with new experiences and in solving problems. Intelligent Quotient (IQ) is a measure of intelligence obtained by dividing the mental age by the chronological age and by multiplying the result by 100.

    IQ = Mental age x 100 Chronological ageGeneral Intelligence includes verbal aptitude, quantitative aptitude, perception, memory, reasoning, artistic talent such as proficiency in music or art, creativity and ability to use thought and imagination to produce original ideas. Also studying, Integrated Marketing Communications (IMC): Definition, Components, and Process.

    The basic presentation (PPT) of Competitive Intelligence (CI):

    Meaning and Definition of Competitive Intelligence (CI):

    The growing competition in the business industry has made it necessary for any company to stay in competition or have a competitive advantage over its competitors, adequate and relevant information about the competitors need to be received or known at the right time in other to make a good strategic business decision. Competitive intelligence is defined as a systematic process that transforms random bits and pieces of data into strategic knowledge.

    This information comprises about competitors, customers, technological, environmental, product and market in. other to make a good strategic decision. Competitive intelligence is described as those activities a company undertake in determining and understanding its industry as well as identifying and understanding the competitors, also determine and understand their weaknesses and strength and anticipate their next move(s).

    What does Competitive Intelligence (CI) mean Introduction Meaning and Definition
    What does Competitive Intelligence (CI) mean? Introduction, Meaning, and Definition with PPT. #Pixabay.

    This definition of competitive intelligence tends to identify/determine, understand and anticipate industry and competitors. Furthermore, competitive intelligence is a process of monitoring the competitive environment, with the aim of providing actionable intelligence that will enhance a company competitive advantage over its competitors. Competitive intelligence propels the decision makers to smarter more successful decisions, thereby minimizing risk, avoiding being blind-sided and getting it right the first time.

    Finally, CI is a “process” because it involves gathering, analyzing and applying information about the product, competitors and the entire environment which includes the supplier, regulatory body, partners and so on and it’s a “continuous activity” because the business environment changes as the world changes which usher in more competition. Also, it gathers adequate “relevant” information at an appropriate “time” because it is vital a company gets its decisions and moves correctly for the first time.

    CI has three defining characteristics:

    • It focuses on the external business environment rather than internal matters.
    • It involves gathering information and converting it into intelligence that can be used by the organization. If the intelligence is not usable or actionable, then it is not considered real intelligence, and.
    • As opposed to illegal industrial espionage, CI is considered an important and ethical business practice.