Presentation on theme: "Chapter 1 Characteristics of Business"— Presentation transcript:
1 Chapter 1 Characteristics of Business Nature of BusinessTypes of BusinessImpact of Global Competition in BusinessBusiness Growth & ProsperityEntrepreneurshipIntrapreneurship
2 Nature of BusinessBusiness - an organization that produces or distributes a good or a service for profit.Profit - the difference between earned income & costs
3 Three Major Activities of Business Production - making a product or providing a service.Marketing - deals with how goods and services are exchangedbetween producers and consumersFinance - deals with the money matters related to running a business
4 Types of BusinessesIndustrial Businesses - produce goods that are often used by other businesses or organizations to make things (Metal, ore, buildings)Commercial businesses - are engaged in marketing, finance and in furnishing services.Services - intangible products that result from a high degree of labor (accounting, hair dressers)Industry - used to refer to all businesses within a category (accounting, publishing etc....)
5 Activity #1: List at least three companies that would be considered to be a part of each industry. Airline IndustryBanking IndustryComputer IndustryFast Food IndustryAutomotive IndustryConsumer Photography IndustryInsurance IndustryBeverage IndustryPharmaceutical IndustryOil & Gas Industry
6 Impact of Global Competition on Business Global Competition - the ability of organizations to compete with other businesses in other countries.Domestic Goods - products made by firms in U.S.Foreign Goods - products made by firms in other countries
7 Effectiveness Vs. Efficiency Effectiveness - when the right decisions are made in deciding which products or services to offer customers.The Japanese taught us Total Quality Management (TQM) which is a company-wide commitment to excellence that is accomplished by teamwork & continuous improvement.Efficiency - producing the needed goods and services quickly and at a low cost.Managers should strive to beeffective and efficient at the same time
8 Methods to Improve Efficiency Specialization - when workers specialize, they become experts.Mass Production - using up-to-date equipment and assembly line methods to produce large quantities of identical goods.Advanced Technology /Innovation - better quality goods are built at a faster pace and at a lower cost.Reorganization - (produces greatest results)Downsizing - cutting back on the size of the firm and products provided.Empowerment - letting the workers decide on how to perform their work tasks and offer ideas on how to improve the work process
9 Business Growth & Prosperity Gross Domestic Product -(GDP) is the total market value of all goods produced and services provided in a country in one year. The rate of growth and the GDP indicate the economic strength of the country.Underground economy - transactions that are not recorded usually because they are unlawful or paid in cash.Individual well-being of its citizens - Study family income to show standard of living.
10 EntrepreneurshipEntrepreneur - one who starts, manages, and owns a business.Small business - any business that is operated by one or a few individuals. Usually retail and fewer than 100 employeesFranchise - a legal agreement between a company and a distributor to sell a productor service under special conditions. Greater chance of success.Franchisor - parent companyFranchisee - the entrepreneur
11 Activity #2: Franchises Alphabetical DirectoryFind 10 Franchises that you would be interested in and find out information regarding:A Brief description of the companyFranchise FeesCash RequiredTotal InvestmentsTotal Net Worth
12 Entrepreneurship Risks and Obligations Risk - the possibility of failure, competition from other businesses, changes in prices, or changes in the economic environment.If risks are high, so are the chances of failure. 1 out 4 businesses fail within 3 years.Responsibility lies with the entrepreneur to serve the stakeholders.Stakeholders - customers, employees, management, competitors, investors, and the public.
13 IntrapreneurshipIntrapreneur is an employee of the organization who is given the funds and the freedom to create a special unit or department within the company in order to develop a new product, process or serviceAdvantages - upper management does not interfere, low risk, employers benefit by keeping creative employees, customers benefit with new products at a faster pace.