Busn9 ppt ch 1

1. Business
Now: Change
Is the Only
Constant
1
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2. LEARNING OUTCOMES
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1 Define business and discuss the role of business in the
economy
2 Explain the evolution of modern business
3 Discuss the role of nonprofit organizations in the
economy
4 Outline the core factors of production and how they
affect the economy
5 Describe today’s business environment and discuss
each key dimension
6 Explain how current business trends might affect your
career choices

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Role of Business in the Economy
• Goal is to generate long-term profits by
delivering unsurpassed value to customers
• Value: Relationship between price of a good or
a service and the benefits that it offers its
customers
• Growth in social media has influenced
business and consumers

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Business Basics: Key Definitions
• Business: Organization or activity that
provides goods and services to earn a profit
• Profit: Money earned by a business in sales
minus expenses
• Loss: Occurs when expenses are greater than
revenue
• Entrepreneurs: People who risk their
resources to start and manage a business

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Business Basics: Key Definitions
• Business improves standard of living of
people, contributes to higher quality of life
• Standard of living: Quality and quantity of
goods and services available to a population
• Quality of life: Overall sense of well-being
experienced by an individual or group

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Business Eras
• Industrial revolution
• Technological advances fueled rapid
industrialization in America in mid-1700s to mid-
1800s
• Entrepreneurship era
• Large-scale entrepreneurs emerged in the
second half of the 1800s, building business
empires

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Business Eras
• Production era
• In the early 1900s, businesses refined production
process and created greater efficiencies
• Marketing era
• After WWII, businesses began to develop brands
to help consumers understand the differences
among products
• Relationship era
• Today, firms aim to build long-term relationships

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Nonprofits and the Economy
• Nonprofits: Business-like establishments
that employ people and produce goods and
services
• Goal - To contribute to the community
• Produce goods and services to support economic
stability and growth in a region

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Factors of Production
• Elements that businesses need to achieve
their objectives
• Natural resources
• Inputs that offer value in their natural state
• Capital
• Synthetic resources that a business needs to
produce goods or services

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Factors of Production
• Human resources
• Physical, intellectual, and creative
contributions of everyone who works within
an economy
• Entrepreneurship
• Entrepreneurs take the risk of launching and
operating their own business
• Create opportunities by harnessing other
factors of production

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Business Environment
• Setting in which business operates
• Components
• Economic environment
• Governments take active steps to reduce the
risks of business
• Affected by corruption and ethical lapses

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Business Environment
• Competitive environment
• Companies look to develop long-term,
mutually beneficial relationships with
customers
• Speed-to-market is a key source of
competitive advantage
• Speed-to-market: Rate at which a new product
moves from conception to commercialization

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Business Environment
• Workforce advantage
• Finding and holding the best talent
contributes to a firm’s competitive edge
• Technological environment - The impact of
technology has transformed business
• Business technology: Tools used by
businesses to become efficient and effective
• World Wide Web
• E-commerce

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Business Environment
• Social environment - Covers shared values,
attitudes, customs, beliefs, and demographics
• Dimensions
• Diversity
• Aging population
• Rising worker expectations
• Ethics and social responsibility

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Business Environment
• Global environment
• Technology and free trade have blurred lines
between individual economies in the world
• General Agreement on Tariffs and Trade (GATT):
International trade agreement that has taken steps
to lower tariffs and promote free trade worldwide

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Business and You
• Financial success is influenced by the
economy and one’s business skills
• Experts advise graduates to follow their passion

17. SUMMARY
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• Business improves people’s standard of
living and increases the quality of life
• Modern business has evolved through
different eras from the industrial revolution
to the relationship era
• Nonprofit organizations work along with
businesses to improve the quality of life in
society

18. SUMMARY
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• Core factors of production are natural
resources, capital, human resources, and
entrepreneurship
• Dimensions of the business environment
are economic, competitive, technological,
social, and global
• Career choices are affected by the broader
economy and business skills

19. KEY TERMS
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• Value
• Business
• Profit
• Loss
• Entrepreneurs
• Standard of living
• Quality of life
• Nonprofits
• Factors of production
• Business environment
• Speed-to-market
• Business technology
• World Wide Web
• E-commerce
• Demographics
• Free trade
• General Agreement on
Tariffs and Trade (GATT)

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