Free Essay: Business Studies Essay
- Implications of taking a bank loan
Taking a loan from a bank would impact the books of accounts of a business in several ways including a balance sheet, the account balance will pile up since the business will have made a commitment to liability. If it is assumed that the borrowed finances are transferred into the bank account of the business, there will still be an increase in the bank account balance. Borrowing a loan is an implication that the business will be required to pay interest accrued from the borrowed. This will result in a higher figure of the interest expense. And, as a result, the Debt-Equity ratio will go up since the financing of the business will be more inclined to the debts, unlike equity. The interest expense figure on the income statement is expected to be higher.
- Private sale of stock
When the shares of a company are issued or placed on sale, the capital accounts of common stockholders are expected to rise. This will be reflected on the balance sheet. The money obtained from the sale when a company issues its shares or stock for sale, common stock will be deposited into the bank. With this, there will also be an increase in the bank account balance. Besides, the capital account balance will also register an increase. However, the returns that are expected by the common stockholders will be earned in the form of dividends. This will in return increase the balance in the income statement. Because of the expected sale of stock, the Debt/ Equity ratio will potentially go down.
- Extended payment terms from vendors
In an event that the business negotiates with its suppliers for an extended period of payments, the balance of creditors in the balance sheet will not change. It is expected that the turnover ratio of creditors which is the duration of the period that the business takes before making payments to creditors will shoot up. It is documented as trade payables or cost of sales multiplied by the number of days in one year.
My retail store of choice is Wal-Mart, a multinational chain of stores that stocks and offers a wide range of goods and services. The company fulfills all the elements of the marketing mix known as the 4Ps which include placement, pricing, product, and promotion. Wal-Mart has supermarkets in several places locally and across the globe. The stores are strategically positioned in places where they can be easily spotted by customers, thereby bringing the products much closer to the customers. In terms of promotion, the chain of stores constantly advertises its products over the internet where there is a high potential of clients. Besides, it also does promos and keeps updating customers on its new products and services. With regards to products, Wal-Mart stocks a wide range of products that are customized to the needs of customers.
The stores stock a variety of products such that customers always get whatever they need. Besides, the products are packaged in different sizes and offered at different prices to suit the economic strengths of different people. In terms of pricing, the chain of stores has been recognized for offering quality products and services at affordable rates. Initially, it operated under the slogan; ”Low Prices every day.” Today, the slogan has been changed to ”Save Money. Live Better.” It is still dedicated to offering products at reduced prices. With regards to price, Wal-Mart has excelled in providing quality goods and services at affordable prices.
The most attractive of these marketing elements is pricing. In times of harsh economic temperatures, customers are mindful of their spending. Saving is critical, thus, Wal-Mart has always remained the preferred retailer to most customers. The company has put in place a competitive pricing strategy that many retail stores have not been able to beat. For any other retailer to gain loyalty compared to Wal-Mart’s, it has to reduce its prices much lower. However, this must be conducted in a way such that it does not compromise the quality of products that are offered to customers.
The promotional mix entails advertisement, personal selling, sales promotion, direct marketing, and public relations. This section does an analysis on two online video adverts, ”Never Say No to Panda” which is a promotion for a cheese brand known as ‘Panda’ and ”Volvo Trucks-The Epic Split featuring Van damme” that is for the promotion of Volvo trucks. Panda is a cheese brand of Egyptian origin whose manufacturers are trying to promote it in foreign markets through an online video. The advert features a panda, an animal that unleashes terror on any person who proposes its cheese brand.
The promo is mainly reliant on humor to catch the attention of the customers to the product without revealing its unique features. The advert about Volvo trucks, however, reveals the distinct steering capabilities of the trucks to potential customers. The advert features Van Damme, a movie star being supported between two moving Volvo trucks. Based on the stability and precision of the dynamic steering of the trucks, the advertisers try to convince potential customers that the trucks cannot let them fall.
Since consumers are rational beings, they like products that offer them value for every dollar spent. They are even willing to part with extra money for added features and enhanced quality. This is what makes the Volvo trucks advert to appeal more than that of Panda. Because of the extra stability features revealed in the advert, more customers are likely to acquire the truck, thus, increased sales. However, no human would want to face the intimidation or be coerced to spend their money on something like what is shown in the Panda promotion. The advertisement does not provide any rational reason why someone should buy the Panda brand cheese instead of another. The advert strategy cannot effectively work even with several other products like bank services.
This business studies essay paper has highlighted ways of solving all the hitches outlined with regards to the impacts of various sources of financing on business accounts, the marketing mix of a favorite retail store, and an analysis of two advertisements.
“Never say no to Panda!’’ Online video clip. YouTube. YouTube, 18th Sept. 2010. Web. 3rd
“Volvo Trucks – The Epic Split feat. Van Damme (Live Test 6)” Online video clip. YouTube.
YouTube, 13th Nov 2013. Web. 3rd Dec 2013.
< http://www.youtube.com/watch?v=M7FIvfx5J10 >