Cameron Balloons also moved there because Bristol has a skilled workforce that is needed to design and manufacture balloons.
I think it also might be because of history and tradition.
I think this location is quite good because:-
- The A38 and A4 are close to it
- There is an airport nearby
- There is a rail station nearby too
- The M32 is 5km away
- It has enough space for expansion
- It has a good source of employees coming from Bristol
- You can reach Europe and America easily from England.
The location is proving to be an advantage to the area because:-
- It has created jobs
- IT has created more business for railways etc.
Cameron Balloons is also located in Michigan, USA, which caters for the market in USA.
Toyota.
The location of my second business is Burnaston, Derbyshire. I think that it is located there because of
- Labour supply
- Transport and communication links &
- Personal reasons
This map shows me all of the transport links around Toyota. As it shows, it is extremely close to the motorways and the A38.
As it in Derby, Toyota has a good labor supply. It would also get workers from surrounding areas such as Nottingham and Birmingham.
I don’t think Toyota situated in Derby so they could pay low wages due to unemployment. This is my opinion because most people working in Toyota are extremely wealthy.
Toyota has divisions all over the world. The closest division is in Deeside, Wales.
Comparing Location.
I think that the two businesses chose the location of their business for many different reasons.
Cameron Balloons chose Bediminster as its location because of the skilled work force that was already located there. As Cameron Balloons makes balloons, they needed workforces that was already located there and who were already trained in manufacturing balloons.
I also think Don Cameron located in Bristol because the road, rail, seaport n airport links are nearby.
I think Toyota was located in Burnaston because of the 9 main factors which are:-
- Labour supply
- Transport and communication links &
- Personal reasons
I think Toyota has a better location. This is because it has more of the nine factors than Cameron Balloons. The main difference is that Cameron Balloons is located in Bristol because of competition and workforce whereas Toyota is based in Burnaston because of transportation links.
Business Activity
Business activity is basically what a business does. It could operate in three sectors. They are the primary, tertiary or secondary sectors.
Businesses in the primary sector ate concerned with growing natural products and extracting mineral resources.
Businesses in the secondary sectors are involved with manufacturing and construction, often using products from the primary sector.
Businesses in the tertiary sector provide services. For example, Next and T.K. Maxx.
Cameron Balloons
Cameron Balloons operates in both the secondary and tertiary sectors. This is because they manufacture and sell the balloons.
Cameron Balloons works in the manufacturing and sales part of business activity. They manufacture capital goods, this means that the finished product lasts for a long time.
The manufacturing sector has seen a fall in workers in the past few years due to the invention of machinery. The machines have now replaced people. This means that they have to pay fewer wages. I doubt they actually save money because they would then have to pay for machine repair etc.
The main customers are people who fly hot air balloons and the main competition is less than half the size of Cameron Balloons.
Toyota.
My chosen business is in the secondary and tertiary sector of the economy because it is part of the manufacturing industry. Its main activity is manufacturing cars. After manufacturing the cars, they are then sold.
Toyota also manufactures capital goods (things that are being built to last many years.)
Toyota has over 2000 workers even though machines do most of the work.
The manufacturing sector has seen a fall in workers in the past few years due to the invention of machinery. The machines have now replaced people. . This means that they have to pay fewer wages. I doubt they actually save money because they would then have to pay for machine repair etc.
Most workers supervise the machines, or work in other sections of the company such as Human Resources, Administration, and Finance etc.
The customers are just regular people who want to buy a car with excellent quality.
Toyota’s main rival is BMW.
Comparing Business Activity.
Activity-wise, both of my businesses are in the secondary sector as they both manufacture products. I think the differences are:-
- Toyota makes cars and Cameron Balloons makes hot air balloons and
- Toyota must probably use more machinery than Cameron Balloons due to the fact that they make different things.
They also both sell their goods. Cameron Balloons sells from where they are located but Toyota has set up show rooms around the country so that people can go to their nearest one, instead of traveling for hours just to get to Burnaston.
Aims and Objectives.
An aim is a long term goal. An objective is a short term goal that will help you reach your aims. Objectives need to measurable because it will then be easy to tell when the objective is complete.
Cameron Balloons
Cameron Balloons aims to:
- Make a profit
- Expand as a business &
- Sell more than the competitor.
Its objectives are:
- Provide a highly competitive service
- Improve a product &
- Produce new goods
Toyota
Toyota’s aim is to ensure that vehicles manufactured in the UK maintain Toyota’s world-wide reputation for quality.
Its objectives, short-term goals on the way to reaching the aims, are likely to be:-
- Improving products &
- Limiting environmental damage.
I think that it important for my chosen business to set itself aims because it helps with the motivation as it gives employees something to aim for. It also promotes an environment where everyone can feel part of a team, in the sense that everyone is striving for the same aim.
Staff are able to check that the business is reaching its aims by asking the management.
Comparing aims and objectives.
I think the main difference between the aims and objectives between my two businesses is that Cameron Balloons cares about making a profit and beating the competition whereas Toyota cares more about customer satisfaction.
Justifiable Changes.
Cameron Balloons
I think Cameron could change some aspects of their business to make it operate more effectively and efficiently, but I believe that there are some aspects that are fine the way they are and do not need changing.
Cameron Balloons has a good location. However, I believe it would open a new division in Europe. This would save money on transporting finished goods to customers who live on the mainland of Europe. The problem would be finding a suitable skilled workforce.
If Don Cameron was to change the type of ownership, I think he should change it to a LTD. I think this type of business would be appropriate because it has more capital than any other type of ownership. This would help to expand and diversify the business.
The disadvantages of becoming a PLC are that the company could be taken over by a major shareholder and they cannot sacrifice money to reach certain aims such as being environmentally friendly.
The aim that Cameron Balloons should have is to be environmentally friendly. The objective they could use to reach this is to use environmentally friendly resources. Another objective they could have is to care more about customers.
Toyota.
Toyota has divisions all over the world so I doubt there is any need for Toyota to change their location in England. It is kind of in the middle of England and is close to many transportation links close by. It also has a good supply of workers.
If the owners wanted to change the type of business they could also change it to an LTD because the business would have more capital, which again would help expand and diversify.
The disadvantages of becoming a PLC are that the company could be taken over by a major shareholder and they cannot sacrifice money to reach certain aims such as being environmentally friendly.
I think Toyota should also try and aim to make a profit. An objective that could help reach this target is to provide a more competitive service.
Three functional Areas of Cameron Balloons.
The three functional areas I am going to investigate are
- Operations
- Finance and Accounts &
- Marketing and Sales.
looks after Production, Design, Purchasing, Stock Control, and Research and Development.
looks after all of the income and expenditure of the business.
Marketing and sales looks after all aspects of advertising, selling and Customer Service.
Operations.
The operations function in a business is responsible for all the operations that go into making the product.
A number of things go in a cycle of operations takes place and something is made. Every business needs a set of inputs. It is the job of the functional area that covers operations to make sure that there are enough of the inputs, and that they are of adequate quality. Part of the operations function will also be to organise and oversee the actual production process.
Operations produce products by making best use of the various inputs that are needed. These include,
- Land - This includes land that is worked (such as farming land, mines and quarries), the land that is necessary for buildings to stand on, and the buildings themselves. Cameron Balloons has two factory sites, one in the UK and the other in the USA.
- Equipment - Cameron Balloons has computer and design equipment, machines for sewing fabric and high-quality plotting and cutting apparatus.
- Staff- The staff at Cameron Balloons ranges from Don Cameron, to engineers, designers and salespeople.
- Materials - The raw materials needed include the special fabric used to make the balloons, the resources to put the designs on to the material, and the supplies to make the baskets, burners and rigging.
That is why the operations department is divided into
- Purchasing.
- Design &
- Production.
Purchasing
The main functions of the purchasing department are
- Buying.
- Stock control &
- Goods inwards.
This department deals with around 1000 suppliers, the reason there are so many is because there are many parts needed to manufacture a balloon and only a few companies specialise in balloon parts. However, only 12 of the 1000 or so suppliers make up 50% of the purchasing made by Cameron Balloons.
For the time it takes for the order to be put through and for it to be received can be a long time- some parts take up t 3 months to be delivered, this is called lead times.
The stock control is done with a computer system - essential given the complexity of the task faced by the department. The system was written in-house to guarantee that it was modified to the particular requirements of the company.
Key Staff Members
The key staff member involved in the purchasing area is Sue Tatford. She deals with all of the suppliers and millions of pounds worth of stock. To be successful she needs to have the following skills,
- Good negotiation skills.
- Detailed knowledge of the parts required for manufacturing a balloon.
- Good organisational skills
- Willpower.
- A skill to plan in advance &
- Management skills.
Design
The design department of Cameron Balloons is where the balloons are designed. Design is one of the functions that tales place under the general heading of Operations. Here, research and development is also carried out.
There are 8 people involved in the designing of balloons. They are,
4 people work on the canopy and the envelope
2 people work on the design of the rigging and burners
1 person draws draught detailed technical drawing of plans
1 person works on the airworthiness certification.
When the envelopes are designed there are two shapes that are designed, they are standard shapes and special shapes.
Production
The final area of the operations department is production; this is where the balloons are manufactured. There are many stages that have to take place before producing a balloon.
Firstly, the design team pass on the templates they have made to make the balloon, the templates will be used to cut out the cloth to the recommended size and shape. This is carried out by cutters on a cutting table; the cutting of the material is performed under strong lights so that any mistakes can be spotted before the balloon is in the final stages of production.
The cut out panels are then passed on to a team of sewers, there are 5 team members who make up the sewing team, who have a team leader. Here, the whole of the envelope (the balloon part) will be manufactured. Also, the other parts of the balloon are manufactured, but are made by outside firms and are then passed on to Cameron Balloons to be finished. The art work is put on to the balloon as well; it can be done before or after the balloon is sewed.
Finally, when all the parts have been manufactured, they are passed on to engineers who put the parts together. They can be sold on to the customer.
Finance and Accounts.
Here the accounts are prepared and the bills paid. They also deal with paying people wages. The team consists of just four members who have a different role to play, they are,
Jenny- Wages and various other wages and personnel functions
Stuart- Purchase, ledgers and reception.
Ann- (Head of accounts) accounts, sales and cash.
Melanie- Petty cash, accounts administration, post and reception.
The company also have a team of accountants outside of the company who make the company’s annual accounts. The company’s accounts are done by a unique software system which was designed by Don Cameron. The Managing Director and Production Manager look after the employment of accounts staff. They do the advertising, interviewing and all other selection procedures
Balance Sheets
Cameron Balloons is a limited company which means it has to produce a set of balance sheets annually for its shareholders to see how the company is performing. The balance sheets are divided into two halves, the top halve shoes where the money that is coming in is being used (the net assets). The bottom halve shows how much money is coming into the company (the capital employed). For the company to work efficiently the two halves have to be balanced, hence the name balance sheets. The money invested into the company can be used to buy long-term or short-term assets. The long-term assets are called fixed assets and are things like apparatus, machinery and computers, all of which aren’t used up in the production stage. The short-term assets or current assets are thing that are used up in the production of the balloon, such as stock and cash.
Profit and Loss Accounts
The profit and loss accounts of a business are considerably different to the balance sheets because the balance sheets deal with a certain time and the profit and loss accounts deal with a period of time which can be from 6-12 months. It shows how much the company is making and how much money is being used to make the profit.
Ratio Analysis
Ratio analysis is a method used to understand the company’s finances. This can be used to compare the company with others that operate in the same field. There many types, they are,
Profitability Ratios
This type of ratio helps interpret how well the company’s profit performance is. There are two ratios to show this. They are,
Return on capital employed-this measures the amount of profit made against the capital that has been invested.
Profit margin - this measures the level of profit compared to the turnover. It therefore shows the percentage profit on the sales. It can be measured as either a gross or net profit margin.
Liquidity Ratios
These are ratios that measure the liquidity of the company. Firms have to ensure that they have the liquidity necessary to meet all their commitments. They need to be able to have adequate assets to change into money, and can't afford to have all their assets tied up as capital.
Current ratio - this ratio compares the present assets and current liabilities. Clearly the firm needs to have more current assets than liabilities, and so at a minimum the figure should be more than one. But, it should be higher than this to ensure adequate liquidity. Acid test ratio - this ratio takes a closer look at the company’s liquidity. One of the current assets is stock, and this isn’t easy to turn into cash. The company may have very high stock levels which they can’t vend. The acid test ratio takes the current assets and takes away the stock.
Financial Accounting
Financial accounting looks at the flows of money into and out of the business that have already happened. It gives a picture of how well the business has been doing. The major financial accounting papers are the cash flow statement, the profit and loss account and the balance sheet.
- The cash flow statement shows the cash coming into and going out of the business at a particular moment. It is often called ’snapshot’ of the businesses capital.
- The profit and loss account shows the profits and losses made over a space of time.
- The balance sheet shows the key things which the business owes against the main things which it owns.
Limited companies, like Cameron Balloons, must produce a profit and loss account and a balance sheet, by law.
Management Accounting
Management accounting involves the internal financial information of the business and is not made available outside the company. It looks at expenses and revenues, and budgets. Management accounting really looks at the decision-making that takes place using predictions and forecasts. The main documents to help with forecasting are the cash flow forecast and the break-even forecast.
- The cash flow forecast shows the level of money which the business predicts it will use and obtain so that it can plan for the future.
The break-even forecast shows the amount of sales which the business thinks it will have to make in order to make enough sales revenue to cover its costs
Marketing & Sales
T he marketing section of Cameron Balloons is responsible for selling on the balloons after they are manufactured. This area is separated into two different areas; one area sells Cameron Balloons’ products and the other section sells Thunder and Colt balloons. Thunder and Colt were taken over by Cameron Balloons in 1996, but the balloons are still sold as two different brands.
To market hot-air balloons is not easy as there are only limited supplies of customers. The different types of customers are,
- Private individuals for who ballooning is a pastime.
- Semi-professional pilots.
- Professional operators who take fare-paying passengers.
- Commercial customers who want special shape balloons.
To buy a balloon is very expensive so they don’t deal with hundreds of clients; they deal with few customers on a more personal basis so they have to be taken care of properly. Most of the customers are ones who have already purchased a balloon and want it to be upgraded, in actual fact it’s about 60-70% of their market.
For Cameron Balloons to be successful, they must carry out extensive market research to identify the consumers’ needs, just like any other firm. This is carried out by the marketing department of the company. Cameron Balloons breaks down its market into different segments so it can market a particular item to a certain segment. For this to be successful, careful observation and listening to consumer requirements needs to take place. The business also needs to consider carefully the marketing mix and the nature of the product.
The condition of the economy in addition affects the market for balloons; changes in the economy will influence both Cameron Balloons and their clientele.
Key Staff Members
The marketing area of Cameron Balloons has two main workers to carry out daily functions; they are Alan Noble who is marketing director and Julia Linfield who is the sales coordinator. They work along side several other members who work in the marketing department.
Alan focuses on advertising the balloons, the skills required are.
- An up to date and thorough knowledge of the balloon market and products.
- Good communication skills.
- An aeronautical or ballooning background (being a pilot is also an advantage).
- A skill to maintain a good relationship with all customers as much business is return business.
- Flexibility.
What the Workers Do
Alan and another worker, Nick, spend a lot of their time traveling to ballooning events that are taking place around the world. Cameron Balloons needs to be at these events to promote their business and to see what customers want. It gives them an opportunity to make new clients and maintain relations with old ones.
Also, they spend a lot of time talking to potential customers on the phone. They will phone the firm to tell them what they require.
A small part of time is spent in meetings updating themselves on new technical needs and new additions to the product range.
A larger amount is spent in meetings. Tactical planning is vital to the long-term wellbeing of a company, and the marketing department is a key part of that as they are the ones closest to the customer and the customer's requirements.
Alan and the marketing team are responsible for the internet marketing scheme, this provides information about the balloons to potential customers.
Functional Areas supporting the Business Activity.
The operations department has to work closely with the finance department. They make sure that the money that has been given is spent on things like material and equipment. They work closely with the purchasing department who are in charge of buying the things they need to manufacture balloons. If the finance team thinks that the purchasing team are spending too much on inadequate resources then they have to figure out a way to cut costs.
The designs part of operations works closely with the marketing department. They need to do this because market research could have found out that the designs need to be changed as they are no longer popular.
The production team needs to work closely together with the finance team because they might not account for machinery that has broke or been damaged. They would need to find out ways in which the company could buy new or repair equipment.
The marketing department works closely with the operations department because they carry out the market research to see what customers want from a balloon and then pass on the information. They can then make changes in the company.
The marketing and research department also works together to see how other companies are “satisfying” their clients. They could take ideas from other companies to make their selves run more efficiently.
How the three functional areas work together to reach the aims and objectives.
Cameron Balloons aims to:
- Make a profit
- Expand as a business &
- Sell more than the competitor
Its objectives are:
- Provide a highly competitive service
- Improve a product &
- Produce new goods
Cameron Balloons’ first aim is probably the most important aim a business could have because without a profit, there not really any point in having a business. My three chosen functional areas have to work extremely well together in order to achieve this. The marketing team researches what customers would like. They would then pass this information to the operations department who then make the necessary changes to the balloons. The operations department will work closely with the finance department because they need to find out how much money they have to buy the materials and apparatus. If they are using too much capital, then the finance department will reduce the amount of money the operations department has. The finance department makes sure that the company is actually making a profit.
The third aim is to sell more than a competitor. Again, all three functional areas will have to work closely together to make this a reachable aim. The main functional area needed to sell more than a competitor is the marketing area. Without their research, the operations department could make the necessary changes needed. The finance department will let the operations department know how much money they have to make the changes with.
Cameron Balloons’ first aim is to provide a highly competitive service. Again all three functional areas are needed to do this, but the main one, again, would be the marketing and research field. If Cameron Balloons didn’t provide a highly competitive service, then all the other businesses would end up taking over and Cameron Balloons would end up being bankrupt. The only way they can provide a competitive service is to know what the other businesses are doing. This is where the marketing and research sector comes in because they find out what is happening in the other businesses. They then let the operations department know and they make the necessary changes. Once again, the finance department would let the operations department know how much money they could use in order to make the changes.
The second aim is to improve a product and to manufacture them to the highest standards. This is important because if they don’t, then the customers will take their business else where and therefore, will lose profits. All 3 functional areas work effectively together in order to achieve this aim. The marketing department works with the operation department to see if they are making the balloons to the highest standards which the customers require. They pass on this information to the finance department and they can see whether the capital provided to do this is being used appropriately.
The third aim is to produce new goods. This is important because if they don’t, then they will lose customers, as customers want the latest thing. The marketing and research department will find out what the latest products are, they will then let the operations department know, and they will make the necessary changes. Before they make the necessary changes, they need to know how much money they have to spend, so they will end up asking the finance department.
