The process of market segmentation includes placing potential buyers in segments, segmenting products into categories, identifying products to market in segments and market size, selecting markets to reach, and marketing in these target markets. Each segment offers similar hardware and software products and services. Management often divides companies into business lines to assess which areas of the business are doing well and which areas need improvement. During periods of low economic growth, management also segments the company`s performance to make decisions on which activities in certain markets to eliminate or eliminate departments altogether. Most companies operate in multiple segments. All major companies have tons of different segments. Take Apple, for example. Apple originally started as a PC manufacturer. They almost always developed software, but it was mainly to support their hardware operations. If an entity of an entity as a whole can be split or separated from the entity as a whole and remains self-sufficient, it generally meets the criteria for classification as a business sector. Financial information should be available for the activities and performance of each segment. Market segmentation is the act of segmenting a consumer market into groups based on their preferences or common characteristics or behaviors. Keep in mind that not all components of a business represent a segment.

For example, XYZ Corp.`s marketing department would not be considered a segment because it does not perform operations that directly generate revenue. A line of business is a part of a business that generates revenue from the sale of a product or product line, or by providing a service separate from the company`s main line of interest. For accounting purposes, the Financial Accounting Standards Board`s (FASB) SFAS 131 is the authoritative source for segmented accounting practices. A business line (or strategic business unit) is a subset of a company`s overall activities in which there is an established and distinct product line. An industry can be identified by the products sold or services provided, or by the geographic locations in which the business operates. A business line is a part of a business that can be identified by the products it offers or by the services or geographic locations in which it operates. In other words, it is a unique part of a company that can be clearly separated from the company as a whole based on its customers, products or markets. Companies with different industries can gain a competitive advantage by conquering markets they did not focus on before. They can also retain their customers, as their existing customer base can become new customers from their additional business segments.

This is especially true when industries complement each other. Apple Inc. is known for manufacturing phones, tablets, computers, music players and many other items. Each of these areas can be considered as its own segment. This is useful for helping Apple`s management determine which area is performing best and which areas are experiencing slow sales. The company can then adjust its marketing, research and development efforts accordingly to increase the overall profitability of the company. Suppose XYZ Corporation manufactures widget presses. After years of gluing to this basic product, he decides that he can very easily use widget presses to create the actual widgets. If the company successfully produces widgets and puts them on the shelves for retail, the widget department can be considered its own business as it generates its own revenue and incurs its own expenses.

Disclosure of business lines or areas of activity must be done separately. It must also provide the public with specific information relating to the profit and loss account and the balance sheet. In particular, the public is concerned about information on income and assets on the balance sheet. This allows potential investors (and management) to break down the number of assets used in each business unit or segment. Then they can determine which ones are the most profitable. Get rid of obsolete or unprofitable lines and eliminate them while developing segments that have potential. Amazon.com Inc. (AMZN) is a global technology leader in providing online retail and cloud computing products. The company was founded in July 1994 by Jeffrey P.