348 349 how business works Index design 306–07 environmental responsibility 122 evolution 300–11 extension 46 franchise 22 levels 180–81 life cycle 184–85 positioning 182–83 product-process matrix 310–11 promotion 190–91 samples 201 professional corporation (PC) 16 profit, corporate failure signs 151 profit-and-loss statement 114–15 profit margin 143 profit maximization 60 profitability ratios 148 profits, retained 157, 168 project accounting 101 project management 94–95 professional (PMP) 73 time-based management 294–95 tools 94, 295 promotion of product 190–91 property management 17 prospective costs 141 psychological pricing 187 public companies 18–19 public issue shares 165 public limited company (plc) 16 public relations 191 push/pull strategy 189, 220, 222 PwC 18, 145 Q quality control 318–19 quality management 308–09 total quality management 292–93 quality product positioning 182 questionable costs 141 r radio marketing 201, 210, 213 raising money see funding raw data 251 raw materials costs 140 raw materials inventory 139 Recency Bias theory 156 recession, employment turnover 82 recruitment and selection 82–83 red flags indicating fraud 152 referral markets 209 relationship marketing 208–09 remuneration 107 reporting line, altering 67 reporting structure 18, 19, 69 research and development costs 115 residual value 124 retail space optimization 221 retailers, selling through 188–89 retained earnings 150 retained profits 157 return on equity (ROE) ratio 148 return on marketing investment (ROMI) 242–43 revenue recognition principle 113 reverse merger 45 reverse supply chain 330–31 rewards and motivation 86–87 rights issue shares 165 Ritz-Carlton hotel group 279 robot.txt 231 ROI (return on investment) 242 Rolex 18 RSS (rich site summary) 226 s salaries and wages 115, 132, 152 sales and fraud 152, 153 KPIs 146 pipeline 238 pitch 239 promotion 191, 205 revenue 132 tracking 249 sales tax 106 salvage/scrap/residual value 124 search algorithm 231 search engine optimization (SEO) 230–31 Sears 330 secondary market 171 secondary stock offering 19 securities and capital markets 170–73 Securities Exchange Co 153 selling and buying businesses 40–41 selling price 143 sensory marketing 206–07 sensory testing 207 service costing 143 service jobs 272 share capital, raising 165 share split 166–67 share of voice (advertising) 213 shareholders 60–63 divestitures 45 and financial statements 108 funds 117 liability 16, 17 and management 18, 19 shares and dividends corporate failure signs 151 dividends 168–69 share capital, raising 165 share flotation 160–63 share value 62, 71, 120, 121, 159 share value, establishing 166–67 types 164–65 short-term financing 156–59 shortage management 135 silo mentality 68, 69 single-member company (SMC) 17 Six Sigma control 320–21 skimming pricing 186 slice and dice data 248 small cap listed company 163 small and medium-sized enterprises (SMEs) 38 social economic scale 261 social enterprise 25 social graph 229 social lead targeting 211 social media marketing 228–29 and benchmarking 327 big data 262 and branding 234 see also blogging social media monitoring 229 sole proprietors 14–15 solvency ratios 149
spam use regulation 266–67 span of control 58 special offers regulation 266–67 spinoffs 44, 45 splog 225 spreadsheets 249 staff evaluation 84–85 performance–management cycle 64 staff position 58 stakeholders 60–63 and corporate social responsibility (CSR) 335 and financial statements 108–09 and share value 62 Standard Oil 15 star schema data 248 Starbucks 72, 208, 335 start-up pivot 28 start-ups 26–39 concept development 28–29 funding 34–37 incubators see business accelerators and incubators types 30–31 statistics 109, 251 “sticky” customers 204 stock exchange listing 160–61, 162 stock exchanges, world’s top 162 stock-keeping unit (SKU) 317 straight-line method of depreciation 124–25 strategic capital 244 structural capital 245 subsidiary company 105 Subway 23 success metrics (marketing) 242 sunk costs 141 super angels 35 supplier markets 208 suppliers’ payments 133 supply chain 322–35 surplus management 135 sustainability, KPIs 147 sustainable investment 106 swap ratio 43 sweepstakes and contests regulation 266–67 SWOT analysis 33 synergy 47 T tangible/fixed assets 117–19, 124, 125, 133, 138–39, 153 task culture 65 tax accounting 114–15, 120 tax payments 106, 109, 115, 119, 120, 133, 169 team-based structure 76–77 team-building leadership 90–91 technology, mass customization 278–79 telemarketing 218–19 regulation 266–67 terabyte 263 TERM (technology-enabled relationship management) 264 term loan 34, 158 ticker symbols 19 time-based management 294–95 TOFU (top of funnel marketing) 220 total quality management 292–93 quality management 308–09 Toyota 288–89, 290, 298, 308 tracking stock 45 trade event marketing 200, 205, 210 traditional marketing 200–02 traditional offline advertising 212–13 transaction marketing 209 transnational corporation 21 transparent customization 279 trending product claims 302 trial balance 103 tunneling 152 turnover 114–15 TV marketing 200, 210, 213 TVR (television rating point) 213 U undertrading 151 underwriters 162 unquoted/unlisted company 19 useful/economic life 124 USP (unique selling point) 33 utility company, debt affordability 120 V valuation of company 18, 19 value 186 Value Added Tax (VAT) 106 value chain 324–25 value product positioning 182 value-stream mapping 288 vanity metrics 253 venture capitalists (VCs) 35, 37 vidcasting 226–27 Virgin 15 virtual business incubator 39 Visa 161 W wages and salaries 107, 132 Walt Disney 292–93 warehousing 331 warrant 172 waste elimination 288–89 Watson Wyatt index 245 Wessex Water 107, 109, 114–15, 117–19, 122–23 wholesalers, selling through 188–89 who’s who 50–65 Wikispeed 287 windfalls 133 WIP (work in progress) 317 WOM (word-of-mouth) marketing 204 working capital/total assets 150 WorldCom 153 Wyndham Hotel Group 23 X Xerox 70, 71 Z Z-score models, forecasting with 150 Zappos 77 zero-based budget 137 Zeta analysis 151 IndeX
350 351 Dorling Kindersley would like to thank Douglas Bell and Debra Wolter for editorial assistance; Margaret McCormack for the index; and Nicola Gary, Vaibhav Rastogi, and Riti Sodhi for design assistance. Credits DK would like to thank Wessex Water for their kind permission to reproduce sections of their 2013 annual report and accounts on pp.100–123; the Radio Advertising Bureau for permission to reproduce the graph on p.212; and Upstream/YouGov for permission to reproduce the graph on p.214. 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