Transcript Entrepreneurship 3209

ENTREPRENEURSHIP
3209
THEMES/TOPICS AND PERCENTAGE OF
INSTRUCTIONAL TIME:
 Unit 1: Business and the Marketplace ( 40% )
 Sept to Jan
 Unit 2: Entrepreneurship and New Ventures ( 25%)
 Jan to Feb
 Unit 3: Creating a Venture ( 25%)
 Feb to May
 Unit 4: Social Entrepreneurship ( 10%)
ASSESSMENT AND EVALUATION PLAN:
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Tests and Quizzes
Entrepreneurship Portfolio*
Project 1(Individual)
Dragon’s Den Project (Group)
Venture Marketing Plan
Social Entrepreneurship Project
20%
20%
10%
15%
25%
10%
ENTREPRENEURSHIP PORTFOLIO (EP)
Over the course of the year we will be building
a portfolio consisting of the following:
news articles analyses (at least 10 by year’s
end), journal entries, responses to case
studies, classroom activities, specific
performances indicator activities, responses
to field trips and/or guest speakers
Con’t…
BUSINESS IN THE NEWS: POSSIBLE TOPICS
(NEWSPAPER ARTICLES)
 the role technology has played in the evolution of a company or
product
 the connection between supply, demand and price of a product
or service
 changes or challenges facing a sector of the economy
 innovation that resulted from meeting consumer demand (may
include trend/fad )
Con’t
BUSINESS IN THE NEWS: POSSIBLE TOPICS
 the challenges, risks and strategies used by a new local
business
 the challenges, risks and strategies used by a long
established business
 unethical behavior of a business
 a business demonstrating social responsibility
 a successful entrepreneur.
BUSINESS IN THE NEWS: FORMAT
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The articles in the portfolio should include the following:
1 . A copy of the article
2. Source and the date of publication
3. Analysis (I will provide you with templates to work with)
The EP should be submitted as a binder, scrapbook, blog or
other suitable medium, and include a table of contents.
UNIT 1: BUSINESS AND THE MARKETPLACE
Starter: Business Basics (we will revisit many of these later)
Topic 1: Essential Concepts in Business
Topic 2: How a business Functions
Topic 3: Factors af fecting the success of a business
BUSINESS BASICS (PP 6-9):
 Read pp 6-9
 Business synonyms (e.g. firm, organization , career, vocation, job,
etc)
 All shapes and sizes
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Local (You tell me!)
Regional (Purity, SubC Control – will be a presenter later in the year)
National (Tim Horton’s)
Global (McDonald’s)
BUSINESS BASICS
 Profit vs Non Profit organizations
 Profit = income
 Profit organizations operate with making a profit being its goal
 Non-profit organizations do not seek a profit and operate for the good
of the community

Expenses

Expenditures that are involved in running a business (e.g. wages,
paper, ink)
BUSINESS BASICS
 Revenue
 The total amount of money a money a business takes in

Revenue – Expenses = Profit (or Loss)

Solvency

The ability to pay you debts and meet financial obligations
BUSINESS BASICS
 Small or medium sized business (SMB)
 Fewer than 500 employees
 Over two million SMBs in Canada, employing 60% of the private
sector workforce
 Forms of Business Ownership
 Sole Proprietorship – owned by one person
 Partnership – usually owned by two or more partners
 Corporation – business is an ‘artificial’ person created by law and is
owned by shareholders
 Co-operative – owned by its workers or by members who buy from the
business
 Franchise – one business licenses another to use its name, operating
procedure and so on; as a hybrid, can have any form of ownership
BUSINESS BASICS
 Goods – Items that can be seen or touched and, if attractive
enough, bought!
 Services – Assistance provided, usually in return for a
payment, that satisfies needs and wants
 Channels of distribution:
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Brick and mortar stores – Wal-Mart
Telephone
Catalogues
Internet
TOPIC 1: ESSENTIAL CONCEPTS IN
BUSINESS
3 Parts:
1. Relationship between consumer needs and wants
2. Relationship between supply, demand and price
3. Economic Sectors
CONSUMER NEEDS AND
WANTS
Unit 1
Topic 1 .1
CONSUMER NEEDS AND WANTS
 Read pp 16-17 ‘Consumer Need and Wants’
 Need – An item necessary for survival
 Examples include: Food, clothing or shelter
CONSUMER NEEDS AND WANTS CON’T
In this context, we’re
referring to
physiological needs
CONSUMER NEEDS AND WANTS CON’T
 Want – An item not necessary for survival but that adds
pleasure and comfort to life
 Examples include: …
 How would you describe what a business is ?
CONSUMER NEEDS AND WANTS CON’T
 A business can be understood to be the process of using
resources to provide a good or service to meet consumer
needs and wants with the intent of earning a profit
 Answer the following in your notes
 P22 #11
 How does the way you meet your needs and wants dif fer from
your parents? From your distant ancestors?
CONSUMER NEEDS AND WANTS CON’T
Activity 1: Handout
What are some of your most
important needs and wants?
How do you satisfy these
demands? How does this change
over time? Compare your
response with a partner. What is
similar? What is different? What
inferences can you make from
this comparison?
CONSUMER NEEDS AND WANTS CON’T
 Economic Systems (the way people meet their needs and
wants):
 Substance;
 Barter; and
 Market economies
CONSUMER NEEDS AND WANTS CON’T
 Substance (or Subsistence) Economy
 an economy which is not based on money
 in which buying and selling are absent; and
 which commonly provides a minimal standard of living
 People provide their own needs and wants through physical means
(catch/grow their own food, build their own shelter, etc)
 Typically only found in very isolated regions as well as in your history
books
CONSUMER NEEDS AND WANTS CON’T
 Advantages of a substance economy:
 Your food can’t get any more organic!
 Very sustainable – they consume only what they need; relying on the
renewable nature of the world
 Greed, while undoubtedly present, is minimalized
 Can you think of any more?
CONSUMER NEEDS AND WANTS CON’T
 Limitations of a substance economy:
 Very low standard of living
 Would not produce many advances in technology (typically only tools
that met only our needs and not our wants)
 Very few wants would be met
 Can you think of any more?
CONSUMER NEEDS AND WANTS CON’T
 Barter Economy
 A method in which goods and services are exchanged for other goods
and services
 In today’s world it is rarely the only system in any one society (usually
have both a market place and bartering)
 Think back to junior high social studies – merchants in NL! C’mon, think
harder…
 E.g. In Spain there is a growing number of exchange markets. These
barter markets work without money. Participants bring things they do not
need and exchange them for the unwanted goods of another participant.
Swapping among three parties often helps satisfy tastes when trying to
get around the rule that money is not allowed.
 Can you think of any local or regional shops that barter?
CONSUMER NEEDS AND WANTS CON’T
 Advantages of Bartering Economy:
 Environmental impact – rather than disposing unwanted goods, many
are reused
 You don’t have to spend extra money
 If you are not bartering for a profit, you do not have to pay income tax
 Inflation has no affect
 Can you think of any more?
CONSUMER NEEDS AND WANTS CON’T
 Limitations of Bartering Economy:
 Absence of a common measure of value – with money, it is easy to
discern which objectively more valuable
 Indivisibility (cannot be sold in pieces e.g. car, washer) of certain
goods - If Person A wants a washer and Person B wants dishes and
Person A does not haven enough dishes to equal the worth of a
washer, a trade cannot be done.
 Taxation – You are taxed if you barter for a profit
 Can you think of more?
CONSUMER NEEDS AND WANTS CON’T
 Market Economies
 This is the economy we are most familiar with
 An economy in which decisions regarding investment, production,
distribution and prices are based on supply and demand
 Money is introduced here
 Everything is given a monetary value
 Creates much more wealth than the other systems
 Has brought us into the world we live in now
CONSUMER NEEDS AND WANTS CON’T
 Advantages to Market Economies
 Money flows to where it will get the greatest return, which causes the
economy to grow (greater wealth in society)
 If you have a great idea that meets the wants of consumers, it is
possible to build great wealth
 Has helped society build an overall greater quality of life
 Allows for so many wants to be met
 Can you think of any more?
CONSUMER NEEDS AND WANTS CON’T
 Limitations to Market Economies
 With consumption really high, there is negative environmental impact
 For those who choose not to participate, have poor luck, or do not
have a skill set to meet the demands of the world, poverty can be
harsh
 Some argue it places too much importance on meeting wants as
opposed to needs
 Can you think of any more?
CONSUMER NEEDS AND WANTS CON’T
 Why did we go from one economic system to another?
 Substance to Barter:
 Barter to Market:
CONSUMER NEEDS AND WANTS CON’T
 Closing Question
 If our current economic system collapsed tomorrow, what
might happen? How would people meet their needs and
wants? How might people’s priorities change?
SUPPLY, DEMAND AND
PRICE
Unit 1 –
Topic 1 .2
SUPPLY, DEMAND AND PRICE:
ESTABLISHING A TALKING POINT
 In order to understand the complexities of supply and
demand, it is important to first discuss how consumers can
influence products, price, and services.
 Read pp 10-14
 Complete questions 5-9
SUPPLY, DEMAND AND PRICE
Supply
 The quantity (amount)
of a good or service
that producers can
provide
 determined by the
costs of producing it
and by the price
people are willing to
pay for it
Demand
 The quantity of a good
or service that
consumers are able
and willing to buy
SUPPLY, DEMAND AND PRICE
Law of Demand
Law of Supply
 The economic principle that
demand goes up when
prices goes down; and,
conversely, comes down
when prices go up
 The economic principle that
supply goes up when prices
goes up; and, conversely,
comes down when prices
come down
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See figure 1.3
on pg 28
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
See figure 1.4
on pg 30
SUPPLY, DEMAND AND PRICE
Activity #2
 What would you do if a good or service that you use
suddenly increases in price? Think about purchases
to meet both needs and wants.
SUPPLY, DEMAND AND PRICE
 Factor s That Can Increase or Decrease Demand
 (Table 1 .2, pg 29)
 Changing Consumer income
 As income increases, people tend to buy more than before. E.g. A cabin, or
more electronics.
 However, the opposite may be true as well. E.g. With a larger income one may
buy less groceries as they may eat at restaurants more often
 Changing Consumer Tastes
 Increase or decrease. E.g. Fashionable items
 Changing expectations for the future
 If consumers anticipate that prices or income will increase, they will often
purchase more
 The opposite is true as well, when they anticipate a decrease in price or
income
 E.g. One is more likely to purchase something when they anticipate a raise.
Also one is less likely to purchase a video game console if the price is
rumoured to decrease.
 Changes in population
 An increase in population results in the demand of many sectors. This is
particularly true when segments of population see a large increase in
population
SUPPLY, DEMAND AND PRICE
 Also consider:
 Availability of substitutes
 demand of certain products may lower if a perceived acceptable
substitute is in the marketplace
 Time period of adjustment
 People are not likely to buy new gaming consoles if they were to release
new ones every few months
SUPPLY, DEMAND AND PRICE
 Factors That Can Increase or Decrease Supply
 (Table 1 .2, pg 29)
 Changing in Number of Producers
 An increase in producers will increase supply – if demand remains the same, price
will drop!
 Changes in Price
 If price reduces then people may stop producing it. E.g. If cod prices fall, fishermen
will catch other fish
 Changes in Technology
 Changes in technology can reduce the cost of production, encouraging more
businesses to start producing. E.g. CPU wafers, continually getting smaller and
smaller and are able to produce more per wafer
Some CPU chips measure in as little as 22nm
And are expected to be as small as 5nm in 2022
That’s 0.000000005 metres!
SUPPLY, DEMAND AND PRICE
 Changing Expectations for the Future
 Many producers attempt to predict economic conditions and consumer
demand for two to five years in advance. E.g. Automobile companies
 They increase or decrease supply accordingly .
 Changing Production Costs
 If a local baker owner finds a lower cost for ingredients, they can produce
more goods for the same cost.
 The opposite may be true as well, should the supplier increase costs
SUPPLY, DEMAND AND PRICE
 Relating Price to supply and demand
 If demand is high while supply is low, prices tend to be high
 If demand is low while supply is high, prices tend to be low
 When the quantity of goods that a producer is willing to supply at a
certain price matches the quantity of goods that consumers are
willing to buy at that price, then the equilibrium price has been met
the diag

Why would there be a shortage and surplus as indicated in
diagram?
SUPPLY, DEMAND AND PRICE
 Read pp 28-32
 Complete questions 18-21
SUPPLY, DEMAND AND PRICE
Elasticity:
 How sensitive consumers are to a change in price
 How much less will they buy if prices are raised?
 How much more will they buy if prices are lowered?
SUPPLY, DEMAND AND PRICE
 Consider the following situation:
- Medication for high
blood pressure
- You need 30 pills
per month
- Will the price have
any effect on what
you will purchase?
- Let’s see!
SUPPLY, DEMAND AND PRICE
 Consider the following situation:
- You have an
unhealthy habit of
eating 30 Twix bars
per month
- Will the price have
any ef fect on what
you will purchase?
- Let’s see!
SUPPLY, DEMAND AND PRICE
 Elastic vs Inelastic
 Elastic - A good or service is elastic if a slight change in price leads
to a drastic change in the quantity demanded or supplied
 E.g. Going to the movies, vacations, soda pop, tvs, luxury goods
 Rule of thumb - We can do without if price rises
 Inelastic - inelastic good or service is one in which changes in price
experience only small changes in the quantity demanded or supplied
 E.g. Gas, life saving surgery, medications, drugs, cigarettes, necessity
goods
 Rule of thumb – Will be purchased regardless of price changes
 *Quantity = amount
SUPPLY, DEMAND AND PRICE
 Inelastic goods/ser vices may be characterized by:
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Less flexible – not as many options
No good substitutes
Lack of choices
Necessity
Cultural
Cannot live without
Inexpensive
 Elastic goods/ser vices may be characterized by:
 Flexible – If prices of plasma TVs increase, you may still purchase an LED
TV
 Perceived substitutes
 Many choices
 Can learn to live without
SUPPLY, DEMAND AND PRICE
 Are the following goods or services elastic or inelastic?
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Designer shoes?
Game consoles?
Computers?
Earrings?
Engagement rings?
SUPPLY, DEMAND AND PRICE
 The more inelastic:
 Small changes in supply impact price a lot (Hurricane in Gulf of
Mexico may stunt oil supply temporarily – gas can shoot up in price)
 The more prices change (there is little consequence, it will still be
bought)
 Remember Law of Demand: if prices go up, demand goes
down. However, if prices go up and demand goes down only a
little bit – this is what we call an inelastic demand
 E.g. We’re still buying lots of gas!
 This is why you can see extra taxes on products like gas Link
SUPPLY, DEMAND AND PRICE
 So what ef fects does this have on prices?
SUPPLY, DEMAND AND PRICE
 Inelastic: Price and Revenue
 Inelastic demand – There is a positive relationship between price and
total revenue
 An increase in price increases total revenue
 A decrease in price decreases total revenue
SUPPLY, DEMAND AND PRICE
 Elastic: Price and Revenue
 Elastic demand – There is a negative relationship between price and
total revenue
 An increase in price decreases total revenue
 A decrease in price increases total revenue
SUPPLY, DEMAND AND PRICE
-Think back to earlier
- The demand curve
for medication
looked like this
- We know
medication is an
inelastic good
- The demand curve
looks like an ‘I’ for
inelastic
SUPPLY, DEMAND AND PRICE
-Think back to earlier
- The demand curve
for Twix bars looked
like this
- We know bars are a
elastic good
- The demand curve
looks like a ‘-’ for the
horizontal parts of an
‘E’ in elastic
SUPPLY, DEMAND AND PRICE
 Example on how price is af fected for elastic goods
SUPPLY, DEMAND AND PRICE
 Example on how price is af fected for inelastic goods
SUPPLY, DEMAND AND PRICE
 Graph interpretations.
 Watch:
 Video 1
 Supply and demand shifts – end at 8:20
 Video 2
 Elastic and inelastic
SUPPLY, DEMAND AND PRICE
 View board for more examples of both elastic and inelastic
shifts in supply and demand
SUPPLY, DEMAND AND PRICE
ECONOMIC SECTORS
Unit 1 –
Topic 1 .3
ECONOMIC SECTORS
 Economic activity can be categorized in many ways,
depending on purpose
 When considering ownership the classifications public and
private are typically used
 Another classification that is frequently used organizes
businesses according to what type of economic good is
produced. These are:
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Primary industries;
Secondary industries;
Tertiary industries; and
Quaternary industries
ECONOMIC SECTORS
 Primary Industries - Involves the extraction and production of
raw materials
- Includes the following industries: fuel and
energy, logging and forestry, water, agriculture,
mining, fishing and trapping
ECONOMIC SECTORS
 Secondary Industries - Involves the transformation of raw or
intermediate materials into goods
- e.g. manufacturing steel into cars, or
textiles into clothing
ECONOMIC SECTORS
 Tertiary Industry - Involves the provision of ser vices to consumers
and businesses
- E.g. baby -sitting, banking, ser ver
ECONOMIC SECTORS
 Quaternary Industr y - Involves the research and development
needed to produce products from natural
resources (and its by -products)
- consists of those industries providing
information ser vices, such as computing
and information technologies, consultancy
(of fering advice to businesses) and R&D
- In the quaternar y sector, companies invest
to ensure fur ther expansion. It is seen as a
way to generate higher margins or returns
on investment
- E.g. A logging company might research
ways to use par tially burnt wood to be
processed so that the undamaged por tions
of it can be made into pulp for paper;
education; financial planning