Upload
joan-fletcher
View
243
Download
11
Tags:
Embed Size (px)
Citation preview
Chapter 1 - Business and Its EnvironmentBusiness Management Class- Mr. SherpinskyCouncil Rock School District
Business Production Marketing Finance Industrial businesses Commercial
businesses Service businesses Industry
The Nature of Business
An organization that produces or distributes a good or service for profit is a business.
All businesses engage in 3 Major Activities:
1. Production (Manufacturing)2. Marketing (Sales)3. Finance (Money)
Production: involves a company making a product or providing a service for the customer.
What do they provide? What types of companies?
Manufacturing companies
Service companies
Goods: Tangible, made and stored prior to use
Services: Intangible, labor intensive, can’t be made prior to need
Marketing: deals with how goods or services that are exchanged between producers and consumers. That’s everything from
purchasing the right raw materials to the actual shipping to wholesaler or retailer markets.
Finance – deals with all money matters related to running a business. That could include things like…
– Investments– Purchase of raw materials– Purchase of equipment to
produce– Cost analysis and
comparisonsWhat are some other things that involve money in a business?
Two Major Kinds of BusinessesTwo Major Kinds of Businesses INDUSTRIAL▪ Industrial firms- produce goods that are
used by other businesses or organizations to make things.
COMMERCIAL▪ Commercial firms-firms engaged in
marketing, (wholesalers and retailers), in finance, (banks and investments companies), and in providing services (medical offices, fitness centers, and hotels).
Businesses that produce goods.
(Tangible) (Examples): automobile,
television m, clothing and shoes Mills
Provide assistance to Provide assistance to supply a need to a supply a need to a customercustomer
Intangible Can NOT be produced prior to
need (Examples): doctors, lawyers, travel
agents, plumbers, government agencies, etc…
Today service firms far exceed the number of manufacturing firms.
Can you name some local manufacturing and service
companies?
Supply and DemandSupply and Demand Supply-the number of
similar products that will be offered for sale at a particular time and at a particular price.
Demand-refers to the number of similar products that will be bought at a given time at a given price
How does supply and demand effect pricing?
Why is it so important to businesses?
CHECKPOINT CHECKPOINT 1.11.1
CRITICAL CRITICAL THINKING 1.1THINKING 1.1
Service firm-provides intangible products/ assistance to satisfy specialized needs through skilled workers
Industrial firm- produce goods that are used by other businesses or organizations to make things.
Commercial firm-firms engaged in marketing, finance, and furnishing services.
Industry-refers to all businesses within a specific category (auto, medical, music, publishing, advertising)
Industry is the term often used to refer to all businesses within a category, i.e., music industry (instruments, songs, singers) publishing industry (books, magazines,
newspapers) Government industry (fire, police, state, federal,
etc.) Page 6 shows growth in employment in industries/
businesses.
Which has had the most growth?
Go to the BLS.gov website
Research employment growth in major industries Which service industries
are projected to have the greatest growth from 2008-2018?
Name top 4!
1.2
Goals:Goals:1)Describe how innovations affect businesses2)Identify the impact global competition has had on U.S. businesses3)Discuss ways in which businesses can improve their business practices.
Innovation Global competition Effectiveness Efficiency Domestic goods Foreign goods Output Productivity Downsize Empowerment
What is Innovation? Steve Jobs: Innovation
Innovation is something entirely new.
For example: Natural fibers like cotton and wool Chemical develops led to synthetic fibers
like rayon, nylon, and polyester
Can also affect business operations Computers used in design and
manufacturing Internet changed relationships,
information▪ Small versus Large has now been equalized
Using the Internet Find an example of
eight (8) products or services that used innovation to revolutionize what they offer…
Be ready to share Be ready to share with the class!!!with the class!!!
Third World Nation-countries that have few manufacturing firms and a population that is generally poor and uneducated to a large degree.
Domestic goods-products made by firms in the United States.
Foreign goods-products made by firms in other countries.
What is meant by Global competition?
What is an example of a company falling behind?
The ability of profit-making organizations toCompete with other businesses in
other countries.
The United States automobile manufacturersis an example of an industry that fell behind.
How and Why?
the driving force behind the major decisions madeby most large companies today. Ability of businessesfrom one country to compete with businesses fromanother country
•NICs are countries whose economies have not yet reached first world status but have outpaced their developing counterparts.
•NICs are nations undergoing rapid economic growth (usually export-oriented).
•In many NICs, social upheaval can occur as primarily rural, agricultural populations migrate to the cities, where the growth of manufacturing concerns can draw many thousands of laborers.
First World CountriesSecond World CountriesThird World Countries
Where Do Your Customers Come
From?
Web Quest- Research one of the major retailers you know.
(Wal-Mart, Target, or (Wal-Mart, Target, or Sears)Sears)
Answer these questions:1.What percentage of goods do
they sell come from outside the United States?
2.Name 8 countries they buy from?
3.Give examples of what types of products they buy from each country
1. Effective2. Efficient
To Compete and Survive!To Compete and Survive!
What does that mean andWhat does that mean andhow does it occur?how does it occur?
Occurs when an organization makes the right decisions
in deciding 33 things: 1) What products or services
to offer to customers.2) How to produce the
products3) How to deliver them to the
consumers
Occurs when an organization produces needed goods or services Expected Quality Expected Quality ANDAND
Quickly ANDQuickly AND At a low cost, At a low cost, without wasting time without wasting time or materialsor materials
Which of the following actions represents effectiveness and which represents efficiency?? Survey people to see what they like in a
product ? New equipment was installed to produce
more items in less time ? A new product is produced by a robot
based on customers’ answers to 5 questions
Which of the following actions represents effectiveness and which represents efficiency. Survey people to see what they like in a
product (Effectiveness) New equipment was installed to produce more
items in less time (Efficiency) A new product is produced by a robot based on
customers’ answers to 5 questions (Efficiency and Effectiveness).
Companies MUST BE efficientExtent of efficiency is measured by output or amount produced within a given time.Productivity refers to producing largest quantity in least amount of time by using efficient methods an modern equipment.
Workers are more productive when they Workers are more productive when they areare▪ Well equipped▪ Well trained▪ Well managed
10
10
8
8
10
10
12
10
12
12
10
12
16
14
16
14
10
10
10
8
10
10
10
12
15
12
15
16
16
18
18
20
15
10
20
Why is Quality is important to customers
Why is Quality important to retailers
TQM is a commitment to excellence Baldridge National Quality
Award (National honor given annually by federal agency)
Japan’s Quality Award Program is the Deming Award
Recipient of these prestigious awards always show increase in sales.
1. Specialization 2. Technology and
Innovation3. Reorganization
Employees are training for specific types of jobs rather than general training Example: General mechanic or workers that
specialize in transmission repair, body repair, engine repair, etc.
Specialization builds experts in their field Improves quality and increases amount produced.
Specialization improves efficiency. Effectiveness improved by mass production,
assembly line production, up-to-date equipment…robots
Effectiveness can be improved though advanced technology…equipment, process, & materials. United States improves efficiency by
encouraging invention and innovative ideas from their workers.
Most difficult way to increase efficiency
Old way to increase efficiency in the US: downsize (layoff workers) and cut back on goods and service offered.
Rethink organizationa)Redesign the workflowb)Recognize employees c)EMPOWER the entire team showed
improvement in production, quality, morale, and profits.
Reorganizing made US competitive in global market.
CHECKPOINT CHECKPOINT 1.21.2
CRITICAL CRITICAL THINKING 1.2THINKING 1.2
Lisa Gansky - TED January 2011
Consumer Reports magazine rates consumer products, including cars.
For many years, the annual car ratings listed foreign cars as superior to domestic ones.
BUT DOES QUALITY REALLY BUT DOES QUALITY REALLY MATTER?MATTER?
Focus attention on customers’ needs.
Provide excellent customer service.
Offer high-quality goods and services.
Growth and Prosperity
The total market value of all goods and services produced in a country in a year.
Gross Domestic Product
Gross Domestic Product (GDP)
Underground economy
Entrepreneur Franchise Franchisor Franchisee Intrapreneur
Overall, the United States is a prosperous nation
Around the world, people admire and envy this country’s economic strength.
P. 15
What about worldwide?
Gross Domestic Product (GDP) – total market value of all goods produced and services provided in a country in a year.
Individual well-being -2nd measure of a nation’s wealth.
Small businesses are part of the “Entrepreneurship movement” Someone who starts, manages,
owns, and assumes the risk of a business…
Part-time, full-time, with little or no money
Located at home or at a business location
Is the Majority of business in the United States
Employers of more than half of all workers
Firms with 1 to 4 employees 3,617,764Firms with 5 to 9 employees 1,044,065Firms with 10 to 19 employees 633,141Firms with 20 to 99 employees 526,307Firms with 100 to 499 employees 90,386Firms with 500 employees or more 18,469Firms with 500 to 749 employees 6,060Firms with 750 to 999 employees 3,038Firms with 1,000 to 1,499 employees 3,044Firms with 1,500 to 1,999 employees 1,533Firms with 2,000 to 2,499 employees 904Firms with 2,500 to 4,999 employees 1,934Firms with 5,000 employees or more 1,956Firms with 5,000 to 9,999 employees 975Firms with 10,000 employees or more 981
Operated by one or few individuals
Few produce goods Employ fewer than 100 people Over 98% of all business Over half of US workers are
employed by businesses with fewer than 500 employees.
Owners usually highly skilled in one or more areas
Many earn less than $250,000 a year in revenue
What is a franchise? Legal agreement in which an individual
purchases the right to sell a company’s product or service under the company’s name or trademark
Examples? Franchisor: the parent company
(provider)Franchisee: the distributor of
product or services
Positive Parent company
provides the product or service
Provides special training
Greater chance of survival
Benefit from corporate name and advertising
Negative Start up fee Must adhere to their
rules and contract Chance of fraud
Find Ten (10) examples of franchises in Newtown PA 18940
Report their HQ Address
Greatly depends on manager effectiveness
Entrepreneur assumes the risk of success or failure
3 out of 5 fails within 3 years
Economic & financial reason for failure
To customers To workers To management To competitors To investors To the public
(Touching Lives)
RISK OBLIGATIONS
64%
24%
6%
4% 1% 1%
Business Failure ReasonsEconomic Causes
Finance Causes
Disaster and Fraud
Neglect Causes
Strategy Causes
Experience Causes
Economic: Economic: Industry Weakness, Low Profits, Low SalesFinance; Finance; Heavy expenses, Burdensome debtsDisaster: Disaster: Hurricanes, floods, theftNeglect?: Neglect?: conflicts, family problems, and poor work habitsStrategyStrategy: Overexpansion, difficulty collecting from customersExperience: Experience: inadequate planning and inexperience
Intrapreneurship versus Entrepreneurship
Company gives employee the freedom and funds to develop new products, processes, or services.
What do You Think? Employees benefits how? Employer benefits how? Consumers benefits how? Examples where used?
Companies have begun offering employees the opportunity to buy into the company. This is called a _____________________________(ESPO)
Employee Stock Ownership Plan
Employees buy shares of stock in the company which benefits the company $$$ and increased productivity.
Employees benefits by becoming more motivated which increases productivity.
Work hard and better.
Why do so many people start businesses, yet so many of the businesses
ultimately fail?
Businesses are easy to start but hard to operate and manage successfully
What is the main difference What is the main difference between an entrepreneur and an between an entrepreneur and an
intrapreneur?intrapreneur?
CHECKPOINT CHECKPOINT 1.31.3
CRITICAL CRITICAL THINKING 1.3THINKING 1.3
Underground EconomyUnderground Economy: Economic items or dollars not reported in GDP numbers. Illegal Activities Counterfeit Products Under the table employees
Estimated at 5% of the GDP Estimated at 5% of the GDP number during a bad economy number during a bad economy and as much as 20% during a and as much as 20% during a boom!boom!
Go to my faculty Webpage:Answer the Net BookMark
question on page 20 in textbook:
Complete the Crossword Puzzle
Take the Practice Test Print out Print out allall three (3) three (3)
assignments: Analysis, assignments: Analysis, Puzzle and Test and turn Puzzle and Test and turn them in for credit.them in for credit.