Английский язык. Перевод, межкультурная коммуникация и интерпретация языка СМИ. Учебное пособие

In the analytic process, a raw material is broken down or separated to form a variety of outputs. Examples of this type are the processes in which coal is separated into coke, chemicals, and gases; or crude oil is transformed into gasoline, diesel fuel, and other products. Both of the processes are often combined into one overall production process. In other words, both analytic and synthetic processes can be used in the same plant.

FINANCIAL MANAGEMENT

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Financial management, also called managerial finance, corporate finance and business finance, is a decision-making process concerned with planning, acquiring, and utilizing funds in a way that makes it possible for the company to achieve its desired goals. This process involves evaluating assets, liabilities, and equity and making decisions based on that evaluation.

The individual charged with financial management is called financial manager.

Financial analysis and planning are a prerequisite for making sound financial decisions. This function includes monitoring and modifying the firm’s current actions to ensure that its goals are met. Financial managers use numerous techniques to perform financial analysis and planning.

The financial function is concerned with managing the firm’s financial structure which consists of liabilities and owners’ equity. The term funds in financial management refers to the financial capital a firm needs in order to operate. Funds are provided by a firm’s creditors and owners in the form of short-term (less than one year) and longterm (one year or more) funds. These funds may be obtained externally, by borrowing from financial institutions or by issuing securities, or internally, by having profits reinvested from the firm. Because all funds are not quite equally desirable, the financial manager must use an appropriate combination of short-term and long-term financing at a given moment. This involves analyzing the available alternatives, their costs, and their implications.

The investing function deals with managing the firm’s assets. Because the firm has numerous alternative uses of funds, the financial manager is to determine which specific assets, such as plants or equipment, the company has to hold.

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The large scale and complexity of most business organizations has forced a division of the managerial functions. Decision-making areas are often marked out according to the functional nature of the decision – for example, production, personnel, marketing or sales, and finance.

Many firms and organizations give the title «Vice-president – Finance» to their chief financial officers. The financial vice-president is responsible for financial planning and reports directly to the firm’s chief executive officer (CEO).

Reporting to the financial vice-president are the treasurer and controller (sometimes called the comptroller). In general, the controller is the chief accounting officer, and is responsible for carrying out the general accounting, or record-keeping activities, which include the preparation of accounting and financial statements. The controller is also responsible for budgeting and the analysis of actual performance relative to budgeted performance.

The treasurer is responsible for managing the firm’s cash and marketable securities and for acquiring the funds necessary to meet the firm’s financial needs. This entail planning the financial structure, obtaining funds through borrowing, and selling stocks and bonds. In smaller firms, of course, the chief financial officer performs all of the above tasks.

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In recent years financial managers have achieved increasing recognition in business firms. Businesses tend to grow, and the growing concentration of assets in the hands of larger corporations means that the financial managers have larger responsibilities. Business expenditures for new plants and equipment usually involve evaluation by financial managers. Mergers, acquisitions, tax problems also accompany the growth in the size of business firms and call upon the skill of financial managers. What should be the goal of a business firm? Since the owners of a firm are the individuals who have provided the basic capital for its creation, and who bear the risks associated with its performance, the firm logically should be run for their benefit. The firm contributes to the owners’ wealth simply by maximizing the market value of the owner’s equity, that is, their claim on the assets of the firm (common stock of a corporation, a share in a partnership, ownership

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interest in a sole proprietorship). In seeking to attain the goal of maximizing the market value of the owner’s equity, the financial manager must compromise between two basic factors. The trade-off may be expressed as return versus risk.

Consider that we are the owners of a firm. What determines its value to us and to the market? Obviously, the amount of money that it returns is important. The greater the flow of cash produced, the higher our return, that is, the more we have to spend on consumption or to reinvest in the business.

Naturally, cash outflows or expenses are also incurred during the course of operation. It is common practice to measure returns as the difference between cash inflows and cash outflows during a given time period. Furthermore, we can express such net cash flow returns by relating return to the investment and obtain rate of return (in percent).

Risk is involved in any business transaction. Keeping money in a checking account bears no risk and is entirely liquid, but this does not bring us any return. As soon as we transfer some of the cash into other assets – say a machine – we have a chance to generate some cash flows, but we assume some risks and sacrifice some liquidity. This is the basic dilemma of the financial manager.

In order to maximize the market price of the owners’ equity by properly balancing risk and return, the financial manager is involved in three main functions: financial planning, managing assets, and raising funds.

The planning function is one of the most challenging and interesting of all the functions of the financial manager. Participating in the long-term planning for the business, the financial manager must have a broad, overall view of the operations of the company. First of all, he or she is concerned with major plant expansion, replacement of machinery, and other expenditures which will cause unusually large cash outflows. On the basis of the knowledge of these plans and estimates of sales for the near future, the financial manager must also estimate short-term cash flows.

As the financial manager plans the flows of cash, he or she must also ensure that funds are invested wisely or «economically» within the business, or else returned to the owners. Every dollar invested in the firm’s assets has alternative uses. It could be invested in a government bond. It could be committed to a research and development program for new products. Or the dollar might be returned to the owners if they could earn a better return at the same risk, or the same

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return at less risk. This is the tradeoff of risk and profitability that the financial manager must accomplish in planning the firm’s future. If the financial manager’s planned cash outflow exceeds cash inflow, it will be necessary to obtain funds from outside the business. A firm can seek money in various money or capital markets. Within these markets, funds are available from many sources, under different types of agreement, and for different periods of time. The financial manager’s problem is to obtain the combination that most closely suits the needs of the business.

The financial manager must also deal with some special problems that may come to pass in the history of a business. In case of a proposal for merger, there are problems concerning the basis upon which the current owners shall exchange their securities for securities of the new firm. This requires a determination of the respective values of the securities involved. In some cases financial managers are deeply involved in the reorganization of the company’s finances, to protect the business from failure. If the reorganization proves inadequate, the financial manager will be there at the death, supervising the final disposition of the firm’s remains to the creditors and owners.

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The financial manager must be capable of planning, managing assets, and obtaining necessary funds in the existing macroeconomic and legal environment. The market economy has been historically characterized by cycles in business activity, and, in the recent past, rising prices have made the financial manager’s task even more difficult. It has become more important to control manufacturing and production costs and to manage cash.

The integration of various economic factors with policies related to management of the firm’s assets is accomplished by the preparation of budgets – formal, written plans in words and figures establishing the expected operations of the company during some specified period of time. In essence, it is a model representing the effects of varying levels of activity upon costs, revenues, and cash flows. By preparation of budgets, the financial manager plans the balancing of risk and return designed to maximize the value of the owners’ investment.

A large proportion of financial difficulties besetting small businesses could be avoided through planning.

There are relatively few planning failures, but innumerable unplanned ones. The most important reason for planning is that it forces

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people to think ahead. What was true for last year may not be true for the coming year.

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Long-term sales forecasting is usually based on extrapolation of past sales data or the use of econometric methods. In the preparation of cash budgets, a greater emphasis is put on short-term forecasting which needs accuracy and refinement. Two basic approaches are recommended for short-term forecasting, and both should be used whenever possible. Under the first approach, managers ask the sales department to develop from within the department an estimate of monthly sales for the next year. Each sales person is asked to determine how much he or she will be able to sell during the following period. On the basis of these reports, the sales manager prepares an estimate of sales for that period.

The second approach is a forecast of sales based upon an analysis of economic factors. The expected share of the market would be affected by anticipated changes in capacity, price, quality, sales efforts, and any new products to be added. The competitors’ probable reactions to any such innovation also will affect the share of the market. The final estimate of sales must represent a reasonable compromise between the two approaches.

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The preparation of a cash budget should allow the financial manager to answer a series of questions. Is there a need for additional financing or do we have excess funds? In the case of a need for funds, he or she should be able to answer: how much we need? When we need the funds? when we can repay the funds that are needed?

Determination of the «right» amount of inventory requires a balancing of the costs and risks of carrying (using) inventory against the benefits from having the inventory available. Why do we need inventory? What functions does it serve? What are the benefits of having inventory, and do these benefits increase in direct proportion to increases in the level of inventory? Finally, at what point do the benefits begin to cost more than they are worth? Some inventories are unavoidable. However, we can often minimize the available inventory by better production scheduling and by more efficient organization of the production line.

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MARKETING

Performing business activities that direct the flow of goods and services from producer to consumer or user is known as marketing.

The eight most important marketing activities are buying, selling, storing, transporting, financing, risk bearing, securing information, and standartization and grading. To consumers, buying is the most obvious on the retail level. Selling, the aim of virtually every business, is especially important in capitalist economies, where speculative production is common. Also, to increase sales, businesses may employ personal selling, advertising and or promotion. For customers to enjoy the yearround availability of certain merchandise, storing becomes important. The activities that make the product available when the consumer wants it increases its time utility, and transporting a product to whenever customers are to be found increases the goods’ value by adding place utility.

The total market for a product may be divided into two large segments: title consumer market and the business market. The consumer market consists of people buying products and services for personal use. A consumer is eager to spend more time in the selection of goods, and makes a purchase after comparing different brands. Typical shopping goods are jewelry, furniture, and shoes.

The business market consists of forms that purchase goods and services either for resale or in order to operate their businesses. Industrial goods are used in the production of other goods and include raw materials, machinery, and tools. Commercial goods are used by a company to administer its affairs. Items such as computers and stationery are classified as commercial goods.

MARKETING: GENERAL APPROACH

It’s common practice today that companies make and sell what consumers want. But this was not always so. Here is a historical background of the subject

The industrial revolution of the late 18th century brought about mass production. It was at this time that the production concept of marketing was born. In this concept the product was all-important. People would buy whatever was produced. Henry Ford summed up production orientation when he said: «Any customer can have a car painted any color that he wants so long as it is black».

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There came a time, though, when supply became greater than demand. With too many products and not enough consumers ready and willing to buy them, the attention shifted from production to sales. In the 1930–1940s the selling concept came to the fore. This concept held that producers had to persuade consumers to buy their products. Profits had to be made through bigger sales volume.

In the 1950s, producers started trying to understand what consumers wanted and what products would satisfy them. Marketing efforts were aimed at making the consumer happy. Thus, the marketing concept, which stressed consumer wants and needs, arose. It should be added that nowadays businesses make efforts to recognize their social responsibility in addition to their profit-making and customersatisfaction objectives.

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Marketing is the determination of the customers’ needs and wants, the development of goods and services to satisfy those needs and wants, and the delivery of those goods and services to the customer at a convenient time and place. Marketing activities really begin with understanding the customer. For a firm to prepare an effective marketing strategy, it must first define its markets. In a broad sense we can speak of consumer markets, industrial markets, and international markets. Consumer markets consist of individuals and households that purchase goods and services for their own use. Industrial markets are composed of firms that buy goods for resale and firms or institutions that buy goods and services to use in performing their operations. These goods include raw materials, fabricated materials, equipment, tools, office supplies, etc. International markets are buyers of goods and services from other countries. The available natural resources and the status of economic development in a particular country or geographical region determine the dimension of the market for international products.

To be most effective, marketing managers need to understand the characteristics of the markets they are trying to serve. Market characteristics include population, age, income, and regional patterns that affect marketing strategies. The major factor determining consumer demand is the number and type of people with purchasing power to buy a given product or service. This factor is important to the business owner/manager who should ask the question: «Are there enough potential customers to justify my going into business here?»

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Other important demographic characteristics are family status and education. Different age groups have different consumption patterns, and marketing managers form their marketing strategies accordingly. For example, young children need baby food, toys, and clothing. School-aged children purchase clothing, sports equipment, records and CDs, cosmetics, and used cars.

The most important source of consumer purchasing power is personal income. In the USA, for example, the total personal income has increased more than twelve times form 1940 to the present. Regional differences in income, tastes, buying habits are also to be taken into account.

No business can satisfy all the customers. Most marketing managers therefore try to attract the part of the market that matches their product or service. This is called target market – the specific group of customers towards which a firm directs its marketing efforts. The way marketers find out information about their target market’s characteristics is through marketing research, the systematic gathering, recording, and analysis of data about problems related to the marketing of goods and services.

Once a target market has been defined and a thorough marketing research has been conducted, it’s the job of marketing managers to work out marketing strategy: the overall plan for developing the marketing process to reach the firm’s objectives. Usually marketing strategy revolves around product, pricing, promotion, and placement of goods and services – the four Ps of a marketing mix.

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Marketing strategy may be defined as the selection of a course of action from among several alternatives that involves specific customer groups, communication methods, distribution channels, and pricing structures. Choosing target markets is part of establishing a marketing strategy. A target market is the market segment selected by a firm or organization for marketing attention. The selection of target markets must be preceded by market segmentation (dividing customers into groups with common characteristics).

Some businesses select only one target market (usually called the niche) from several market segments and direct their marketing efforts exclusively to it. The strength of their approach is specialization and close attention to the needs of a specific target market. Their goal is to avoid direct competition with industry leaders. The organization

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selecting this approach tries to serve the needs of its target market more comprehensively than competing firms. It develops a strong association with the chosen market as well as a reputation for excellent service.

Some big companies appeal to all market segments in the total market with a tailor-made approach for each of them. This fullcoverage marketing system is the most expensive of the alternative strategies. The companies adopting it supply goods and services for every target market and use specific marketing mix to promote to each one separately.

The above approaches are examples of segmented marketing – methods that recognize differences between target markets by using individualized marketing mixes. An undifferentiated marketing strategy is one that ignores segment differences and uses the same marketing mix for all target markets. The companies following this approach avoid high costs of differentiated marketing. There are serious dangers, however, in it. Some firms start out trying to be all things to all people and end up meaning nothing to anyone. On the other hand, some industry leaders use undifferentiated marketing very effectively. These «combiners» understand the differences in the needs of various target markets, but concentrate on the similarities among customers, on their common needs. Their appeal is so broad that it does not make any sense to use different approaches for various customer groups.

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Starting your own business, you should decide what type of business it will be and what market you will be selling to. In theory, a wellrun business should succeed in any market. In practice, however, you can make success only by choosing your product and market carefully.

Define the concept of your business. Trying to sell a completely novel product or service can be an uphill struggle. Being first is not always the best. The first to offer a new product has to educate a market and possibly establish a distribution structure. However, it does not follow that you can offer something identical to another business. If you do, how can the potential customer choose? The ideal product or service to choose as a basis for the business is one which you can distinguish from the competition by including some additional feature or benefit which is not available in other products.

What you must do next is to study your prospective marketplace in detail. Researching the market comes before raising money, making

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profit forecasts, finding premises, etc. It would be a mistake to think that you have an equal chance of selling to every customer in your market. Basically, you should be looking for a niche in your proposed market which allows you to charge a reasonably high price and so make reasonable profit. To achieve this, your product needs to be clearly distinguishable from the competition.

The purpose of your research at this stage is to look for that niche. This process is called market segmentation. In everyday language, it means looking for a group of customers within your target market which has common characteristics, tastes and features. If you can find such a group, it allows you to tailor your product to meet their particular needs.

Once you have sorted out the groups, you must look at the competition. Are there already suppliers to that group of people? The existence of competition does not mean that you should not try to enter the market, it means that you need to be able to offer customers some additional benefit in your service or product, and it must be the benefit they want.

PRICING, PROMOTION, DISTRIBUTION

Marketing management is an important function of a business. The marketing manager is responsible for the totality of a company’s market offering – the range of products and their packaging, the prices charged, the discounts offered, the communications media employed (television, press, personal salesmen, direct mail, etc.), and the channels through which the product or service is delivered to the customer (retailers, mail order, automatic vending, etc.). The activity of the marketing manager determines whether or not the company meets its financial objectives. The sale of products or services is normally the sole income generator in a company while most remaining personnel solely incur costs. Hence, marketing management must maintain continuous contact with those colleagues in the company who are responsible for manufacturing the products or providing the service for sale, and with those financial colleagues who are responsible for controlling budgets, raising capital and distributing profits.

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A firm’s pricing policy is an important element of its competitive strategy and it must be considered in relation to product and promotional policies. In a perfectly competitive market, there is no need for

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