Chpt 1 slides intro bus

© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .

Prentice Hall, Copyright 20091

Intro to BusinessBusiness 245


2

1


Business Now:Change is the Only Constant

LO1 What is the role of business in the economy?

LO2 How has business evolved?

LO3 What is the role of nonprofits in the economy?

LO4 What are the core factors of production?

LO5 What are the elements of the environment affecting business?

LO6 How are business trends impacting careers?


3

Trends

• The median household income in the U.S. is roughly $50,000.

• The top 40% of Americans earn 75% of the money.

• Four in ten kids are born to single moms.

• By 2010, birthrates had dropped to an all-time record low.

• Sixty percent of Americans now live in the South and West Regions.

• Twenty-six percent of men make six or more cell phone calls a day.

Source: Twitter-Ready Consumer Trends you need to know by Matt Carmichael, AdvertisingAge magazine, October 20, 2010, accessed January 13, 2010


Entrepreneurial Spirit

4


5

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

Nonprofit organizations focus on causes not profit

Business Basics


6

Profit is the financial reward that comes from starting and running a business.

the money that a business earns in sales (or revenue), minus expenses

Business Basics


7

Profit

Profit is the money a business makes after accounting for all the expenses.

Regardless of whether the business is a couple of kids running a lemonade stand or a publicly traded multinational company, consistently earning profit is every company's goal.


8

Path toward profitability can be long

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

-5

-4

-3

-2

-1

0

1

2

3

4

Amazon.com was founded in 1994 and did not produce its first annual profit until 2003


9

The Business of Doing Good

Many nonprofits work with businesses to improve the quality of life in society.

• Business-like establishments whose primary goal is not profits.

• Employ 1 out of 10 workers.

• Contribute to the economy

• Work with businesses to improve quality of life

© T

he S

tudi

o D

og/P

hoto

disc

/Gett

y Im

ages

http://www.avonfoundation.org/


10


11

The History of Business: Putting it All in Context

Mass Production

Factories

Work Specialization

Efficiency

Industrial Titans

Wealth Creation

Increase in Living Standard

Manipulation/Competition

Exploitation

Assembly Line

Refining Production

Productivity Gains

Decrease Costs

Hard Sell

No Customer Focus

Consumer Power

Growth in Consumerism

Product Differentiation

Customer Focus

Long-term Relationships

Satisfied Customers

Use of Technology

Industrial Revolution

Entrepreneurship Era

Production Era

Marketing Era

Relationship Era

© F

otos

earc

h/ A

rchi

ve P

hoto

s/G

etty

Imag

es


12

Factors of Production

• Businesses rely on some combination of these factors

• Entrepreneurship is a key factor

• Growing economies support and promote entrepreneurship

Natural Resources

Human Resources

Capital

Entrepreneurship


The Business Environment: The Context for Success

13


14

Business Environment is Dynamic and Ever-Changing

• How did the Pizza Industry respond to the increase in frozen pizza quality?

• How has McDonald’s responding to Starbucks morning drive competition?

• How has Starbucks responded to McDonald’s?

• How has technology changed the “home phone” and area codes?

• How are apps changing websites and software?


15

Economic Environment

• Government takes an active role to support businesses

Low Federal Tax Structure

Small Business Administration

Federal Trade Commission

Legislation & Enforceable Contracts

• Corruption impacts the economic environment and can increase the cost of running a business


16

2008 Economic Crisis

• The stock market tumbled and millions lost their jobs

• Housing prices plummeted and foreclosures reached record levels

• Economic turmoil in the U.S. spread around the world

• The economy begun to recover in 2009 although unemployment remains high

• The Federal Reserve took steps to encourage a turnaround

• President Barack Obama spearheaded economic stimulus to create jobs, build infrastructure and stabilize the economy

• The stimulus also added to the debt


17

Flex Your Creativity: Use Boredom to Build Your Brain

• Boredom should be recognized as a human emotion central to creativity

• Can help activate less cerebral resources

• Trigger Aha Moments

• Can stretch your capacity

• Next time you are bored, don’t whip out your smartphone! © iStockphoto.com/sorendls


18

Competition is Intense

• Speed to Market – companies must transform concepts into products fast

• Worker Advantage – employees contribute to competitive edge

• Innovation – creativity matters for individuals and the economy


19

Companies Must Focus on Customer Satisfaction

• Build Long-Term Relationships

• Provide Value

• Cheap Doesn’t Equal Value

• Customer Satisfaction = Profitability


Brands that use Imagination and Innovation

20


21

Technological Environment

• Business technology includes any tools to become more efficient and effective. Telecommunications Computers Digital Tools

• Companies use technology for: Computerized billing Digital animation Robotic manufacturing

• Companies that are slow to adapt have been threatened

© Joachim Wendler/Shutterstock.com

© T

he S

tudi

o D

og/P

hoto

disc

/Gett

y Im

ages

http://www.wired.com/


The World Wide Web has Transformed Business

• e-Commerce growth has slowed since the recession 20%+ growth in the past 5 years

Companies connect with suppliers and distributors

Online experiences can be customized

Within five years, there will probably be more mobile Web users than desktop users.

22

© iStockphoto.com/hohos

Source: http://www.businessweek.com/smallbiz/content/nov2010/sb20101112_047190.htm, accessed, January 17, 2011


23

The Social Environment

• Diversity

• Aging Population

• Rising Worker Expectations

• Ethics & Social Responsibility

U.S. Population Projections: 2005 – 2050, February 11, 2008, by Jeffrey S. Passel and D’Vera Cohn, Pew Research Center website, http://pewhispanic.org/files/reports/85.pdf, accessed January 17, 2011

http://pewhispanic.org/files/reports/85.pdf


24

Changing Social Demands

• Ethnic populations can offer robust profit potential

• Investments in the Hispanic market have a $4 return on every $1

• A diverse staff can yield a powerful competitive advantage

• Diversity much be effectively managed

• Younger generations leverage diversity more


25

Technology has forged

links

Job Migration

Economies Interact Around the World

War, terrorism and disease are growing

threat

China and India’s economies are

growingTechnology

Free Trade

Blurred lines between countries/world


26

China and India Growing at Breakneck Speed

In Asia, the average person’s living standards

are currently set to rise by 10,000% in one lifetime!

http://www.businessweek.com/magazine/content/06_13/b3977049.htm, accessed January 20, 2009


27

Business and YOU: Making it Personal

• The changing economy rewards creativity, communication and caring. There is less routine, so do what you LOVE Business today is global and complex

• There are a variety of exciting careers Learn about the industry and the company Be prepared to embrace change!


28

1


Looking Back

• Define business and the role of business in the economy.

• Explain the evolution of modern business.

• Discuss the role of nonprofit organizations in the economy.

• Outline the core factors of production and how they impact the economy.

• Describe today’s business environment and discuss each dimension.

• Explain how current business trends impact your career choices.

Education

Chpt 1 slides intro bus