Key Resources: Vital Inputs for Value Creation - Essay Sample

Introduction

Key resources are the most vital resources or main inputs that are required by am organization in the creation of value, service, a proposition to a particular segment of consumers, which is inclusive of delivering products to a client. Without these types of resources, an organization cannot run effectively. They can be categorized into the following: firstly, physical resources are the tangible assets that an organization utilizes in making sure that the value proposition is created (Anastasia, 2019). An example of such resources can include equipment, manufacturing plants, buildings, among others. Secondly, intellectual resources are as vital to any organization. These types of resources are the incomplete but significant resources required by the organization. An example of intellectual resources includes copyrights, partnerships, brands, patents, among others. They, however, consume a lot of time before being developed and established by an organization.

The human resources are the third category of resources discussed in this paper. Employees make up for a majority of these types of resources. The former is easily ignored by an organization, even though they are the most vital asset to any organization. As such, they should be motivated significantly to ensure that they achieve their maximum productivity power, which is a benefit to the main stakeholders of any organization (Mukher, 2017). Financial resources are the last but most crucial type of resources. Every organization requires financial resources to enable the running of any organization, as finances cover the operating costs of a business, inclusive of the remuneration employees are rewarded for their labor.

Economy Sectors

The main economy of a given nation comprises several sectors that define the size of the population engaged in a particular activity. As such, several sectors of the economy have been established, which will be discussed in this paper sections. The primary sector is the most prevalent in the majority of state economies. This sector is responsible for extracting or rather harvesting products from the earth. The products obtained are referred to as raw products. Some of the activities in the primary sector include forestry, mining, quarrying, among others (Rosenberg, 2019). The secondary sector is the next sector of the economy that is crucial in production by organizations. Under this sector, the raw material obtained from the primary sector is processed into finished goods. As such, the secondary sector comprises processing, manufacturing and construction. An example of an organization that falls under the secondary sector is Coca-cola, which is the company that will be researched throughout this section.

The tertiary sector is the third sector of the economy, which is referred to as the service industry (Anastasia, 2019). Under this sector, the finished goods produced in the latter stage of the secondary sector are sold to potential clients in retails, wholesales, among other crucial selling exercises. The tertiary sector is further divided into quaternary and quinary sectors.

Legal Structures

Legal structures are crucial to organizations as they are responsible for shaping a business's journey, and as such, choosing the right legal structure should be done keenly, putting into consideration time. Five types of legal structures exist which are defined by the business entities that fall under the structures. A sole proprietorship is the first structure. Under this type of legal structure, the owner of the organization is responsible for all the debts and profits of their business (Caramela, 2018). Under this structure, the owner exercises full control of their business. The second structure is that of partnerships. Under this sector, two types are existent, general and limited partnerships. In the former, losses and profits are shared equally while in the latter type of partnership, one partner is made responsible for controlling the operation while others enjoy a portion of the profits and losses. Such a structure is crucial when an investor wants to go into an investment with a family member, for instance.

Limited liability company is the third legal structure existent today. Under this hybrid structure, owners, shareholders, and partners are allowed to enjoy flexibility and tax benefits while limiting their liabilities. As a result, members of the company are shielded from becoming personally liable for the company's debts (Mukher, 2017). Corporations and cooperatives are the last type of structure discussed in this section. Both are separate from their owners and have their legal rights which means they can represent themselves even in contracts, buying of property, among other practices. Due to the enormous size of coca-cola, the organization has become a multinational corporation responsible for the manufacturing and distribution of beverage juices all around the globe. As a result, the organization falls under the cooperation legal structure type.

Coca Cola Business Objectives

From the official website for coca-cola, the objective of the multinational corporation is "to be globally known as a business that conducts business responsibility and ethically and to accelerate sustainable growth to operate in tomorrow's world" (The Coca Cola Company, 2020).

Business responsibility- business responsibility refers to obligations that the management of an organization has on protecting society's interests.

Sustainable growth- it can be defined as the attainable expansion of a company which the latter can maintain except running difficulties (Kiran, 2016).

Business Ethics- this term can be described as the study of the practices and policies that are appropriate, referring to controversial subjects that include bribery, insider training, and discrimination.

Coca-Cola Stakeholders

Stakeholders Expectations Accountabilities

Employees More monetary and nonmonetary benefits Maximized productivity at the organization

Suppliers Prompt payments Prompt supplying of raw materials (Caramela, 2018)

Customers Satisfactory performance, value for money, and safety (Governance Today, 2020). Giving feedback on the organization's products to allow for improvement

Government Prompt tax payments Stipulating laws that foster low taxation to allow for business growth

Resources Mind Map for Coca Cola

Cash and bank deposits

Financial Resources

Buildings, Land, and goodwill

Physical Resources

Employees and consumers

Human Resources

Copyrights, partnerships, brands and patents

Intellectual Resources

Accounting Equation and Budgeting

Business analytics have argued that every transaction that is done by an organization, no matter the size, always has an impact on the financial position of the company (Sarokin, 2018). The accounting equation is expressed as follows:

Assets = Liabilities + Equity

Where; Assets are the things owned by an organization (for example, goodwill, land, and buildings),

Liabilities refer to the debts of the organization (for example, salaries, income taxes, and wages) and

The owner's equity is the difference between liabilities and the organization's assets (Kiran, 2016).

The accounting equation should always be in balance if record keeping is clean and accurate. The latter is because every transaction the organization involves itself in affects two accounts. Due to this, a balance should always indicate good record keeping and the financial position of the organization.

A budget, on the other hand, refers to the estimation of expenses and revenue in a stipulated amount of time, and it is re-evaluated and compiled on a timely basis.

Sources of Financing a Business

Source of Finance Explanation Advantage Disadvantage

Owner's investment The source refers to personal sources of finance (Sarokin, 2018).

This type of source has no strings attached, meaning that there are no repayment schedules, interest accruing, traveling, among other activities (Caramela, 2018). Investing personal money in an organization means risk, and therefore, a sole proprietor might lose great amounts of investment money if the investment opportunity is not worth it.

Investors and banks The terms usually refer to wealthy individuals and venture capital firms that might assist an organization in raising funds for expansion. The wealthy individuals and banks have vast amounts of wealth hence can get a business up and running quickly (Governance Today, 2020). It is time-consuming to convince investors of the potential of your business.

Crowdsourced funding The term refers to fund solicitation from several small investors A greater amount of funds can be collected from numerous small investors. Mostly, a significant percentage of funds raised is usually directed to the crowd-source platform instead of the cause it was meant for.

Workforce Planning and Production

Economies and Diseconomies of Scale

Economies and diseconomies of scale are production-related, and they contribute significantly to the wealth generated by an organization. Economies of scale, for instance, can be achieved or rather obtained when there is a significant increment in production scale, which reduces average costs in the long run (Agarwal, 2019). In other words, the cost of products can be discussed to be decreased when an organization involves itself in the production of more units. An example of economies of scale is the bulk buying power that various organizations possess. Bulk buying from suppliers ensures that discounts are encountered, which in turn reduces the operating costs of any business.

Diseconomies of scale, on the other hand, usually occur when there is rising in average costs in the long run, which are as a result of an organization expanding over its optimum scale (Louch, 2019). An example of diseconomies of scale is the dysfunctionality of communication in enormous organizations since there is a lack of interdepartmental information flow. Therefore, this can create issues in markets where production targets to sell its products to generate profits.

The following graph shows economies and diseconomies of scale:

Where: LRAC- Long Run Average Cost, and

LRMC- Long Run Marginal Cost

Location of a Business

The location where a business is to be set up is crucial in determining the success that will be enjoyed by such a business. Laws are always changing in different regions, and before selecting a location for a business, significant research should be made to ensure that the local laws, climate, among other factors, are favorable for business. In light of this, several factors are crucial in determining the right location for setting up any business. Firstly, accessibility is of uttermost importance. Accessibility is crucial as it is the main determinant of how frequent deliveries can reach the organization or a consumer (JPreston, 2017). As a result, the location of a business should consider transport links. In densely populated areas, the cost of rentals and property is usually high, and hence locating one's business in the outskirts of town, which still enjoys good infrastructure, might be the best decision.

The skills base in the area is the second factor to consider in finding a suitable business location. Labor is essential for any organization to succeed. As a result, the location of the bus...