Transcript Chapter 1 - BusinessClassSpring2011

Chapter 1 Characteristics of Business
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Chapter 1
©2008 Thomson/South-Western
Characteristics of Business
Lesson 1.1 The Nature of Business
Goals
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Explain the nature of business activities.
Describe the general types of businesses.
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Business and Profit
Business — an organization that produces or
distributes a good or service for profit
Profit — difference between earned income
and costs
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Characteristics of Business
THE NATURE OF BUSINESS
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Business activities
– Production
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Marketing
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Finance
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THE NATURE OF BUSINESS
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Types of businesses
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Industrial businesses – business 2 business
Commercial businesses – selling to us
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Service businesses – not really a product sold
Local service business?
Industry – all businesses in the same category
Publishing?
Automotive?
Government?
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Lesson 1.2
Changes Affecting Business
Goals
 Describe how innovations affect businesses.
 Identify the impact global competition has
had on U.S. businesses.
 Discuss ways in which businesses can
improve their business practices.
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Changes Affecting Businesses
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Innovation
Impact of global competition
Focusing on the right things
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Achieving effectiveness — making the right
decisions about products or services to offer and
the best ways to produce and deliver them
Achieving efficiency — producing products and
services quickly, at low cost, without wasting time
and materials
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Effectiveness and Efficiency
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EFFICIENCY
Efficiency is achieved in three ways:
 Specialization of effort “experts doing the
job”
 Better technology and innovation robots and
computers, better machinery
 Reorganization of work activities teams,
downsizing, empowerment
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GLOBAL COMPETITION
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For hundreds of years, America lead the way in
producing new goods and services.
Now more countries are becoming industrialized but
Chinese factory wages 64 cents an hour.
U.S. factory wages in 2002 was $21.11
30 foreign countries studied was $14.22
Mexico's factory wages $2.48
Because China's living costs are low, that 64 cents
buys as much as $2.96 in the U.S.
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Class Assignment
Car Production Plant
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Break up into 3 groups Describe ways an
automobile manufacturer can use each
method to increase efficiency. Page 10
Group 1: Use Specialization
Group 2: Use Technology and innovation
Group 3 : Use Reorganization of work –
downsizing and empowerment
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Class Assignment
Car Production Plant
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Using your method of Efficiency in order to
make the Automotive plan more profitable,
come up with a plan and present to the
automotive workers.
Sell them on why this is great for them as
workers and increase efficiency.
Be prepared to handle objections
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Lesson 1.3
The Contributions of Business
Goals
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Identify two ways a nation measures
its economic growth and prosperity.
Describe the benefits of business
ownership to the nation and
individuals.
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The Contributions of Business
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Business growth and prosperity
– Gross domestic product
(GDP) — total market value
of all goods and services
produced in a country in a
year
– Individual well-being — home
ownership, consumer
products, self-improvement,
savings
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Unreported Income
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Underground Economy
Drug money
Babysitting
Lawn service
Part time jobs
Counterfeit
merchandise
5% - 20%
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COUNTRIES WITH LARGEST GDPs
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GDP in trillions
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U
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EU
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Current GDP
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www.thomsonedu.com/school/bpmxtra
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current GDP
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Franchise
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Top 10 funny named Franchises
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TOP FRANCHISES 2010
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The Contributions of Business
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Business ownership
– Popularity of small businesses –
easy, desire to be own boss
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Growth of franchise businesses page 17 McDonalds
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Risks of ownership 1 out of 4-5 fail
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The Contributions of Business
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Business ownership
– Obligations of ownership
Community
 Customers
 Employees
 Management
 Competitors
 Investors
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 To the public
The Contributions of Business
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Intrapreneurship In-company
business
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Studying business principles and
management in HS or College
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INTRAPRENEURSHIP
Intrapreneur — an employee who is
given funds and freedom to create a
special unit or department within a
company in order to develop a new
product, process, or service
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