Introduction to Business - Chapter 1

According to the entrepreneur and author Seth Godin, Connection Economy works better when, what four conditions are met?

1) Coordination 2)Trust 3)Permission 4)The Exchange of Ideas

Define Business

A business is any organization or activity that provides goods and services in an effort to earn a profit

Describe today's business environment and discuss each key dimension

Accelerating change marks every dimension of today's business environment. 1) Economic environment 2) Competitive environment 3)Technological environment 4) Social environment 5) Global environment

Marketing Era

After WWII, consumers began to gain power. As goods and services flooded the market, the marketing concept emerged: a consumer-first orientation as a guide to business decision-making

How do these four factors affect the economy? 1) Natural Resources

All inputs that offer value in their natural state, such as land, fresh water, wind, and mineral deposits. The value of natural resources tends to rise with high demand, low supply, or both.

General Agreement on Tariffs and Trade (GATT)

An international trade agreement that has taken bold steps to lower tariffs and promote free trade worldwide.

Business technology

Any tools—especially computers, telecommunications, and other digital products—that businesses can use to become more efficient and effective.

Competitive Environment

As global competition intensifies, leading-edge companies have focused on long-term customer satisfaction as never before.

Explain the evolution of modern business

Business historians typically divide the history of American business into 5 distinct eras: Industrial, Entrepreneurship, Production, Marketing, and Relationship.

Nonprofits

Business-like establishments that employ people and produce goods and services with the fundamental goal of contributing to the community rather than generating financial gain.

Entrepreneurship Era

During the second half of the 1800s, large-scale entrepreneurs emerged, building business empires that created enormous wealth, but often at the expense of workers and consumers.

How do these four factors affect the economy? 4)Entrepreneurship

Entrepreneurs take the risk of launching and operating their own businesses. Entrepreneurial enterprises can create a tidal wave of opportunity by harnessing the other factors of production.

Factors of Production

Four fundamental elements—natural resources, capital, human resources, and entrepreneurship—that businesses need to achieve their objectives.

Industrial Revolution

From the mid-1700s to the mid-1800s, technology fueled a period of rapid industrialization. Factories sprang up in cities, leading to mass production and specialization of labor

Economic Environment

In late 2008, the U.S. economy plunged into a deep financial crisis. The value of the stock market plummeted, companies collapsed, and the unemployment rate soared. The president, Congress, and the Federal Reserve took unprecedented steps—including a massive economic stimulus package—to encourage a turnaround. The U.S. economy eventually recovered, but the entire world economy began to stagger in early 2016 as economic instability in China caused frightening ripples around the globe

Production Era

In the early 1900s, businesses focused on further refining the production process, creating huge efficiences. The assembly line, introduced by Henry Ford in 1913, boosted productivity and lowered costs.

What does profit potential provide?

It provides a powerful incentive for people to start their own businesses, or become entreprenuers.

This approach continues to influence business decisions today as global competition heats up to unprecedented levels.

Marketing Concept

Nationwide how many workers do nonprofit businesses employ?

Nationwide, nonprofits employ about one in ten workers, accounting for more paid workers that the entire construction industry and more than finance, insurance, and real-estate sectors combined.

Discuss the role of nonprofit organizations in the economy.

Nonprofit organizations often work hand in hand with business to improve the quality of life in our society. Nonprofits are business-like establishments that contribute to economic stability and growth. Similar to businesses, nonprofits generate revenue and incur expenses. Their goal is to use any revenue above and beyond expenses to advance the goals of the organization, rather than to make money for its owners. Some nonprofits -- such as museums, schools, and theaters -- can act as economic magnets for communities, attracting additional investment.

The Relationship Between Nonprofits and Businesses

Nonprofits - advance goals of organization BOTH - generate revenue, incur expenses, provide employment Businesses - create profit for owners

Profit (Or Loss) =

Revenues - Expenses

Discuss the role of business in the economy.

Successful businesses create wealth, which increases the standard of living for virtually all members of society.

The "Hard Sell"

The "hard sell" emerged: aggressive persuasion designed to separate consumers from their cash

Global Environment

The U.S. economy works within the context of the global environment. The worldwide recession has dampened short-term opportunities, but China and India continue their rapid economic development.

Social Environment

The U.S. population continues to diversify. Consumers are gaining power, and society has higher standards for business behavior. Sustainability has become a core marketplace issue.

Outline the core factors of production

The four factors of production are the fundamental resources that both businesses and nonprofits use to achieve their objectives. Four factors: 1) Natural Resources 2)Capital 3)Human Resources 4)Entrepreneurship

What happened towards the end of the 1800s?

The government stepped into the business realm, passing laws to regulate business and protect consumers and workers, creating more balance in the economy

The "Marketing Concept"

The marketing concept emerged: consumer focus that permeates successful companies in every department, at entry level.

Demographics

The measurable characteristics of a population. Demographic factors include population size and density, as well as specific traits such as age, gender, and race.

How do these four factors affect the economy? 3) Human Resources

The physical, intellectual, and creative contributions of everyone who works within an economy. Education and motivation have become increasingly important as technology replaces manual labor jobs.

Standard of Living

The quality and quantity of goods and services available to a population

Technological Environment

The recent digital technology boom has transformed business, establishing new industries and burying others.

World Wide Web

The service that allows computer users to easily access and share information on the Internet in the form of text, graphics, video, apps, and animation.

Business Environment

The setting in which business operates. The five key components are: economic environment, competitive environment, technological environment, social environment, and global environment.

Loss

When a business incurs expenses that are greater than its revenue

Explain how current business trends might affect your career choices

With automation picking up speed, many traditional career choices have become dead ends. But some things - including empathy, creativity, change management, and great communications - can't be digitized. Having these skills can provide you with personal and financial opportunity.

Relationship Era

With the technology boom in the 1990s, businesses began to look beyond the immediate transaction, aiming to build a competitive edge through long-term customer relationships.

Free Trade

an international economic and political movement designed to help goods and services flow more freely across international boundaries

Business

any organization or activity that provides goods and services in an effort to earn a profit

E-Commerce

business transactions conducted online, typically via the internet

5 Eras of Business

industrial revolution, entrepreneurship era, production era, marketing era, relationship era

Entrepreneur

people who risk their time, money, and other resources to start and manage a business

How do these four factors affect the economy? 2) Capital

the manmade resources that an organization needs to produce goods or services. The elements of capital include machines, tools, buildings, and technology. THIS DOES NOT MEAN MONEY!

Profit

the money that a business earns in sales, minus expenses, such as the cost of goods and the cost of salaries.

Quality of Life

the overall sense of well-being experienced by either an individual or a group

Speed-to-market

the rate at which a new product moves from conception to commercialization

Value

the relationship between the price of a good or a service and the benefits that it offers it customers