Business a changing world 7e by ferrell chap001

The People & Activities of BusinessMarketing – Focus on satisfying customers •Determine what products customers want •Plan and develop products •Determine distribution •Determine place •

Business in a Changing World

Chapter 1

The Dynamics of Business and Economics

Crocs focuses on core competencies

Market opportunities, timing, and circumstances

The Nature of Business

What is a business?

Individuals or organizations trying to earn a

profit by providing products that satisfy

people's needs

The Nature of Business

What is a product?

A good or service with tangible and

intangible characteristics that provide

satisfaction and benefits

Products Tangible Goods & Services

The Primary Goal of Business

Earn a Profit

The difference between what it costs to

make and sell a product and what a

customer pays for it

The Primary Goal of Business

PROFIT

The reward for the risks that businesses take

in providing products

Non-Profit Organizations

Not all organizations are businesses.

Nonprofit organizations provide goods and

services but do not have the fundamental

purpose of earning profits

Customers, employees, investors, government regulators,

community and society Those that have a stake in the success

and outcomes of a business are considered stakeholders.

Stakeholders & the Environment

Environmentally Friendly Practices

The People & Activities of Business

The People & Activities of Business

Management – Focus on employees

•Coordinating employee’s actions

•Organizing people for efficiency

•Motivating employees toward business goals

.

The People & Activities of Business

Management – Production and Manufacturing

•Plan activities

•Organize staff

•Control tasks

The People & Activities of Business

Marketing – Focus on satisfying customers

•Determine what products customers want

•Plan and develop products

•Determine distribution

•Determine place

•Determine promotion

The People & Activities of Business

Marketing & Promotion

•Advertising

•Personal selling

•Sales promotion

The People & Activities of Business

Finance – Primary responsibility of owners

•Obtaining money

•Using money effectively

•Accountants, stockbrokers, bankers

Why Study Business

•Develop Skills for career success

•Understand business activities

•Importance of profitability

•Individual businesses

•Local and regional economic impact

•Global economic impact

Why Study Business

The Economic Foundations of Business

Resources

•Natural resources (land, forests, minerals, water)

•Human resources (labor)

•Financial resources (capital)

Distribution of resources for the production of goods and services within a social system.

Factors of Production

Natural, human, and financial resources used to produce goods

and services

Economic Systems

Central issue of economics –

•How to fulfill an unlimited demand for goods and

services with a limited supply of resources

How a society distributes its resources to produce goods and services

Economic Systems

Three Important questions –

1 What types and quantities of goods/services will

satisfy consumer needs?

2 How will goods/services be produced? By whom?

With what resources?

3 How are goods/services distributed to consumers?

How a society distributes its resources to produce goods and services

Comparison of Communism, Socialism, and Capitalism

Economic Systems

A society in which the people without regard to

class, own all the nation’s resources.

•China

•North Korea

•Cuba

Communism

Economic Systems

System in which the government owns and operates

basic industries but individuals own most businesses.

•Sweden

•India

•Israel

Socialism

Economic Systems

Free Enterprise – individuals own and operate majority

of businesses providing goods and services

Economic Systems

Free Market All economic decisions made without government intervention (pure capitalism)

Government intervenes and regulates business to

some extent (modified capitalism)

Pure Capitalism

Modified Capitalism

Economic Systems

No country practices pure capitalism or pure

socialism/communism Economic systems contain

various elements of government intervention

Mixed Economies

Supply & Demand

Demand number of goods/services consumers buy at

given price at a specific time

Supply number of products businesses will sell at

different prices at a specific time

Distribution of resources and products determined by supply and demand

Forces of Supply & Demand

Price at which number of products supplied equal amount of products

consumers are willing to buy at a specific time = equilibrium price

Nature of Competition

Pure competition – many small businesses in same

product market

Monopolistic competition – small number of businesses

little difference in products

Oligopoly– very few businesses selling a product

Rivalry among businesses for consumers’

dollars.

Economic Cycles and Productivity

Economic Expansion – economy is growing and

consumers are spending money

Economic Contraction – spending declines, layoffs,

economy slows down

Expansion and Contraction

•Unemployment– % population wants to work but

unable to find jobs

•Depression– unemployment very high; consumer

spending low; business output sharply reduced

Overall Unemployment Rate

U.S Civilian Labor Force 1920 - 2007

Measuring the Economy

•Gross Domestic Product (GDP)

Evaluating Our Nation’s Economy

Ethics & Social Responsibility