Question

State two examples of business segments and explain why these would be a feasible business segment.

Answer 1

Examples- Apple manufactures computers, tablets, phones, headphones, music players and more. Management at Apple can divide the overall company performance into smaller segments based on these products to measure where the company is succeeding. Without this type of segmentation, you might thing Apple’s steady profits are from the iPad because its one of the newest products to be release. In fact, the Apple tablet segment’s sales have slowed down in recent quarters because consumer demand has decreased. Apple’s steady profits are still attributed to the continued success of its phone segment.

With this information, management at Apple can choice what direction the company needs to take to improve areas or stop production of products altogether.

As you can see, separating a company into distinct business segments helps management analyze not only the current structure of the company, but it also helps them evaluate performance based on products, customers, and market locations.