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Student Chapter1


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Chapter 1 Slides for BUSI1301.PO1
Instructor: Stelluti

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Student Chapter1

  1. 1. Chapter 1: BUSINESS NOW Change is the Only Constant
  2. 2. <ul><li>What is the role of business in the economy? </li></ul><ul><li>How has business evolved? </li></ul><ul><li>What is the role of non-profits in the economy? </li></ul><ul><li>What are the core factors of production? </li></ul><ul><li>What are the elements of the environment affecting business? </li></ul><ul><li>How are business trends impacting careers? </li></ul>LOOKING AHEAD
  3. 3. MOVING AT BREAKNECK SPEED <ul><li>In the last decade: </li></ul><ul><ul><li>The players have changed </li></ul></ul><ul><ul><li>What consumers want has changed </li></ul></ul><ul><ul><li>How we buy has changed </li></ul></ul>Source: <ul><li>General Motors </li></ul><ul><li>Ford Motor </li></ul><ul><li>Exxon Mobile </li></ul><ul><li>Wal-Mart </li></ul><ul><li>AT&T </li></ul><ul><li>General Electric </li></ul><ul><li>IBM </li></ul><ul><li>Mobil </li></ul><ul><li>Sears Roebuck </li></ul><ul><li>Altria Group </li></ul>1995 <ul><li>Wal-Mart </li></ul><ul><li>Exxon Mobil </li></ul><ul><li>General Motors </li></ul><ul><li>Chevron </li></ul><ul><li>ConocoPhillips </li></ul><ul><li>General Electric </li></ul><ul><li>Ford Motor </li></ul><ul><li>Citigroup </li></ul><ul><li>Bank of America </li></ul><ul><li>AIG </li></ul><ul><li>Exxon Mobil </li></ul><ul><li>General Motors </li></ul><ul><li>Mobil </li></ul><ul><li>Ford Motor </li></ul><ul><li>Texaco </li></ul><ul><li>IBM </li></ul><ul><li>DuPont </li></ul><ul><li>AT&T </li></ul><ul><li>General Electric </li></ul><ul><li>Amoco </li></ul><ul><li>General Motors </li></ul><ul><li>Exxon Mobil </li></ul><ul><li>Ford Motor </li></ul><ul><li>General Electric </li></ul><ul><li>Mobil </li></ul><ul><li>Chrysler </li></ul><ul><li>US Steel </li></ul><ul><li>Texaco </li></ul><ul><li>IBM </li></ul><ul><li>Gulf Oil </li></ul>2007 1985 1965
  4. 4. <ul><li>A business is any activity that provides goods and services in an effort to earn profit. </li></ul>BUSINESS BASICS <ul><ul><li>Non-profit organizations focus on causes not profit </li></ul></ul>
  5. 5. <ul><li>Profit is the financial reward that comes from starting and running a business. </li></ul>BUSINESS BASICS <ul><ul><li>the money that a business earns in sales (or revenue), minus expenses </li></ul></ul>
  6. 6. NONPROFIT PARTNERSHIPS Many nonprofits work with businesses to improve the quality of life in society. Companies support their missions and improve society. The Business of Doing Good
  8. 8. CREATIVITY MATTERS <ul><li>Creativity is important to the economy </li></ul><ul><ul><li>with global competition, the stakes are high </li></ul></ul><ul><li>Many of the latest inventions have come from companies </li></ul><ul><ul><li>this trend is likely build momentum as global competition intensifies </li></ul></ul>
  9. 9. INVENTIONS WITH IMPACT Source: Encyclopedia Britannica Laptop Viagra Camcorder Cat Litter Bikinis Muzak Disposable Diapers Kool-Aid Astroturf
  10. 10. THE EVOLUTION OF BUSINESS 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 Relationship Era Marketing Era 1950s Production Era Early 1900s Entrepreneurship Era Mid 1800s Industrial Revolution 1700-mid 1800s
  11. 11. FACTORS OF PRODUCTION <ul><li>Businesses rely on some combination of these factors </li></ul><ul><li>Entrepreneurship is a key factor </li></ul><ul><ul><li>Most growing economies support and promote entrepreneurship </li></ul></ul>Natural Resources Human Resources Capital Entrepreneurship
  13. 13. DYNAMIC, CONSTANT AND ENGAGING, CHANGE <ul><li>Companies must respond quickly and creatively </li></ul><ul><ul><li>New Products </li></ul></ul><ul><ul><li>Integrating Technology </li></ul></ul><ul><ul><li>Creating Technologies </li></ul></ul><ul><ul><li>New Businesses </li></ul></ul><ul><ul><li>Innovative Processes </li></ul></ul><ul><ul><li>New Target Markets….. </li></ul></ul>“ “ When the change on the outside exceeds the change on the inside, the end is near.” - Jack Welch
  14. 14. ECONOMIC ENVIRONMENT <ul><li>Government takes an active role to support businesses </li></ul><ul><ul><li>Low Federal Tax Structure </li></ul></ul><ul><ul><li>Small Business Administration </li></ul></ul><ul><ul><li>Federal Trade Commission </li></ul></ul><ul><ul><li>Legislation & Enforceable Contracts </li></ul></ul><ul><li>Economic Vulnerabilities </li></ul><ul><ul><li>CEO/Worker Pay Gap </li></ul></ul><ul><ul><li>Consumer Debt </li></ul></ul><ul><ul><li>Federal Debt </li></ul></ul>Free Enterprise and Fair Competition Flourish in the United States
  15. 15. COMPETITIVE ENVIRONMENT <ul><li>Today’s competition is intense </li></ul><ul><li>Companies must focus on customer satisfaction </li></ul><ul><ul><li>Build Long-Term Relationships </li></ul></ul><ul><ul><li>Provide Value </li></ul></ul><ul><ul><li>Customer Satisfaction = Profitability </li></ul></ul><ul><ul><li>Cheap Doesn’t Equal Value </li></ul></ul>
  16. 16. COMPETITIVE PRINCLIPLES <ul><li>Avoid your competitors’ strengths and exploit their weaknesses. Don’t try and beat them at their game. </li></ul><ul><li>Always be a little paranoid. Never underestimate your competition. </li></ul><ul><li>Competitors will usually get better when pushed. </li></ul><ul><li>Competitors are sometimes irrational when pushed. </li></ul>
  18. 18. SOCIETY CHANGES <ul><li>What are our changing values and beliefs? </li></ul><ul><li>How does the integration of other cultures change/add to values and beliefs? </li></ul><ul><li>What demographic influences are changing the environment globally? </li></ul>Companies must respond to these changes in the products they sell and how they sell them.
  19. 19. AND CHANGES…… Teens today are much less likely than their parents to categorize people by race, religion, and sexual orientation. They’re more likely to notice similarities and differences in core values. Source: Diversity in Word and Deed: Most Teens Claim Multicultural Friends, press release from Teenage Research Unlimited, November 10, 2004, TRU Website,
  20. 20. SOCIAL ENVIRONMENT <ul><li>Diversity </li></ul><ul><li>Aging Population </li></ul><ul><li>Rising Worker Expectations </li></ul><ul><li>Ethics & Social Responsibility </li></ul>
  21. 21. GENERATION C <ul><li>Creating Content </li></ul><ul><li>Customizing Products </li></ul><ul><ul><li>Websites </li></ul></ul><ul><ul><li>Blogs </li></ul></ul><ul><ul><li>Photos </li></ul></ul><ul><ul><li>Ringtones </li></ul></ul><ul><ul><li>Music </li></ul></ul><ul><ul><li>Movies </li></ul></ul>
  22. 22. TECHNOLOGICAL ENVIRONMENT <ul><li>Technology has transformed businesses and consumers </li></ul><ul><li>How Companies Do Business </li></ul><ul><ul><li>Telecommunications </li></ul></ul><ul><ul><li>Robotics </li></ul></ul><ul><ul><li>Flexible Manufacturing </li></ul></ul><ul><ul><li>Alternative Selling/eCommerce </li></ul></ul><ul><li>How Consumers Shop </li></ul><ul><ul><li>Online Information/Content </li></ul></ul><ul><ul><li>Alternative Buying/eCommerce </li></ul></ul>
  23. 23. TECHNOLOGICAL ENVIRONMENT More than 724,000 Americans report that eBay is their primary or secondary source of income, And an additional 1.5 million people say that they supplement their incomes by selling on eBay. Source: US Postal Service News Release, July 21, 2005.
  24. 24. GLOBAL ENVIRONMENT Terrorism is more of a threat today Job Migration China and India’s economies are growing Technology Free Trade Blurred lines between countries/world Technology is linking customers/suppliers worldwide
  25. 25. GLOBAL ENVIRONMENT According to investment bank CLSA, China manufactures 80% of the world’s clocks and watches, 50% of its cameras, 30% of its microwave ovens, a quarter of its washing machines, and a fifth of its refrigerators.
  26. 26. COOLEST BRANDS Nike 30.8% Sony 15.9% Adidas 15.1% BMW 10.1% Microsoft 9.0% Coca-Cola 8.9% IBM 8.2% According to Chinese college students
  27. 27. BUSINESS AND YOU MAKING IT PERSONAL What are your passions? What are business careers that encompass your passions?
  28. 28. LOOKING BACK <ul><li>Define business and the role of business in the economy. </li></ul><ul><li>Explain the evolution of modern business. </li></ul><ul><li>Discuss the role of non-profit organizations in the economy. </li></ul><ul><li>Outline the core factors of production and how they impact the economy. </li></ul><ul><li>Describe today’s business environment and discuss each dimension. </li></ul><ul><li>Explain how current business trends impact your career choices. </li></ul>