1. Chapter 2 The Path to a Successful Business

2. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Because Business Decision Making is Complex, Successful Business Leaders Use a Thought Process to Make Sound Judgments and Decisions.

3. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. The Path Toward a Successful Business Vision and Mission Indicators of Business Success (Desired Performance) Indicators of Business Success (Desired Performance) Assessing the Environment And Its Impact Assessing the Environment And Its Impact Providing Excellence in Products and Services Providing Excellence in Products and Services Evaluating Results And Making Changes Evaluating Results And Making Changes

4. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. VISION: A broad statement of what a business would like to achieve. MISSION: A statement that spells out why a business exits and what the business will do. Vision and Mission

5. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. To Grow, A Business Must Acquire Resources Resources are the Factors of Production: Human Resources Physical Resources Land, buildings, equipment & raw materials Financial Resources Information Resources are the Factors of Production: Human Resources Physical Resources Land, buildings, equipment & raw materials Financial Resources Information

6. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. 1. Defines the company’s basic business. 2. Specifies the markets or constituents the business serves. 3. Specifies the basic philosophy, or core values, of the business. 1. Defines the company’s basic business. 2. Specifies the markets or constituents the business serves. 3. Specifies the basic philosophy, or core values, of the business. The Mission Statement

7. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Dell Computer Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of: Highest quality Leading technology Competitive pricing Individual and company accountability Best-in-class service and support Flexible customization capability Superior corporate citizenship Financial stability

8. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Best Buy We improve people’s lives by making technology and entertainment products affordable and easy to use. Best buy’s core values include: Unwavering ethics Honesty and integrity Respect for our customers, our communities, and our fellow employees Extraordinary growth For our Company, our employees and our shareholders Discovery and learning Embracing speed and change Being the best Having fun while being the best

9. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Southwest Airlines The mission of Southwest Airlines is dedicated to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.

10. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Indicators of Business Success Achieving Financial Performance Meeting Customer Needs Building Quality Products and Services Encouraging Innovation and Creativity Gaining Employee Commitment

11. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Achieving Financial Performance …..the bottom line Revenue: The amount customers pay for goods and services they purchase Expenses: Money a business must pay out to make its products and provide its services Profit: The amount of money left over after a business records all its revenues and subtracts all its expenses Revenue: The amount customers pay for goods and services they purchase Expenses: Money a business must pay out to make its products and provide its services Profit: The amount of money left over after a business records all its revenues and subtracts all its expenses

12. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Business Must be Productive Productivity: The ratio of goods and services provided to resources used. Productivity: The ratio of goods and services provided to resources used.

13. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Customers can: Be individuals or other businesses Be one-time buyers or repeat buyers Spend a little or spend a lot of money Be located next door or 1000 miles away Order face-to-face or order or by mail or Internet The key to business profits is satisfying customer needs over time! Meeting Customer Needs

14. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Keys to Meeting Customer Needs Customer Sensitivity The awareness of customer desires and needs. Customer Service Business actions taken to meet customer needs and preferences. Timeliness Taking action for the consumer - the “first-comer advantage.”

15. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Building Quality Products and Services Businesses must focus on the quality and value of their products and services using: Quality Management How a company addresses their quality Continuous Improvement Efforts to provide steadily higher quality throughout all phases of operations

16. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Providing Excellence in Products and Services Thinking Strategically Acquiring and Using Resources Enhancing Value Through Communicating with Customers Integrating Activities and Encouraging Commitment Providing Value Through Quality Products and Services Using Technology in a Competitive Environment

17. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. The Use of Technology is a Key Issue of Contemporary Management Information Technology Production Technology

18. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Encouraging Innovation and Creativity In today’s volatile business, the only constant is change! Creativity: New and different patterns of thinking and behaving. Innovation: New approaches and options that are the result of creative activities.

19. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. A New Business Trend The Learning Organization: Organizations that adapt to change and creatively search for new and better ways to operate and meet the needs of their employees and customers. Highly proactive Ripe with creativity More likely to produce useful innovations A healthy organization The Learning Organization: Organizations that adapt to change and creatively search for new and better ways to operate and meet the needs of their employees and customers. Highly proactive Ripe with creativity More likely to produce useful innovations A healthy organization

20. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. In a successful business, employees: Care about the jobs they do Are proud of their work Feel commitment to their jobs and company Are dedicated and concerned Motivated to do the best jobs possible In a successful business, employees: Care about the jobs they do Are proud of their work Feel commitment to their jobs and company Are dedicated and concerned Motivated to do the best jobs possible Gaining Employee Commitment

21. McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved. Keys to Gaining Employee Commitment Empowerment - involvement in decision-making authority and responsibility Company-supported training Creative benefits and work options Full use of workforce talent Understanding and meeting worker’s needs