©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Business Now: Change is the Only Constant
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LO1 What is the role of business in the economy?
LO2 How has business evolved?
LO3 What is the role of nonprofits in the economy?
LO4 What are the core factors of production?
LO5 What are the elements of the environment affecting business?
LO6 How are business trends impacting careers?
© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Entrepreneurial Spirit
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
A business is any activity that provides goods and services in an effort to earn profit.
Nonprofit organizations focus on causes not profit
Business Basics
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Profit is the financial reward that comes from starting and running a business.
the money that a business earns in sales (or revenue), minus expenses
Business Basics
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
The History of Business: Putting it All in Context
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
Industrial Revolution
Entrepreneurship Era
Production Era
Marketing Era
Relationship Era
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
The Business of Doing Good
Many nonprofits work with businesses to improve the quality of life in society.
• Business-like establishments whose primary goal is not profits.
• Employ 1 out of 10 workers.
• Contribute to the economy
• Work with businesses to improve quality of life
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Factors of Production
• Businesses rely on some combination of these factors
• Entrepreneurship is a key factor
• Growing economies support and promote entrepreneurship
Natural Resources
Human Resources
Capital
Entrepreneurship
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
The Business Environment: The Context for Success
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Economic Environment
• Government takes an active role to support businesses
Low Federal Tax Structure
Small Business Administration
Federal Trade Commission
Legislation & Enforceable Contracts
• Corruption impacts the economic environment and can increase the cost of running a business
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
2008 Economic Crisis
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• The stock market tumbled and millions lost their jobs
• Housing prices plummeted and foreclosures reached record levels
• Economic turmoil in the U.S. spread around the world
• The economy begun to recover in 2009 although unemployment remains high
• The Federal Reserve took steps to encourage a turnaround
• President Barack Obama spearheaded economic stimulus to create jobs, build infrastructure and stabilize the economy
• The stimulus also added to the debt
© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Competition is Intense
• Speed to Market – companies must transform concepts into products fast
• Worker Advantage – employees contribute to competitive edge
• Innovation – creativity matters for individuals and the economy
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Companies Must Focus on Customer Satisfaction
• Build Long-Term Relationships
• Provide Value
• Cheap Doesn’t Equal Value
• Customer Satisfaction = Profitability
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Technological Environment
• Business technology includes any tools to become more efficient and effective. Telecommunications Computers Digital Tools
• Companies use technology for: Computerized billing Digital animation Robotic manufacturing
• Companies that are slow to adapt have been threatened
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
The World Wide Web has Transformed Business
• e-Commerce growth has slowed since the recession 20%+ growth in the past 5 years Companies connect with suppliers and
distributors Online experiences can be customized Within five years, there will probably be
more mobile Web users than desktop users.
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Source: http://www.businessweek.com/smallbiz/content/nov2010/sb20101112_047190.htm, accessed, January 17, 2011
© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
The Social Environment
• Diversity • Aging Population • Rising Worker
Expectations • Ethics & Social
Responsibility
16 U.S. Population Projections: 2005 – 2050, February 11, 2008, by Jeffrey S. Passel and D’Vera Cohn, Pew Research Center website, http://pewhispanic.org/files/reports/85.pdf, accessed January 17, 2011
© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Technology has forged
links
Job Migration
Economies Interact Around the World
War, terrorism and disease are growing
threat
China and India’s economies are
growing
Technology
Free Trade
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Blurred lines between countries/world
© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Business and YOU: Making it Personal
• The changing economy rewards creativity, communication and caring. There is less routine, so do what you LOVE
Business today is global and complex
• There are a variety of exciting careers Learn about the industry and the company
Be prepared to embrace change!
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
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© 2 0 1 3 C e n g a g e L e a r n i n g . A l l R i g h t s R e s e r v e d . M a y n o t b e s c a n n e d , c o p i e d o r d u p l i c a t e d , o r p o s t e d t o a p u b l i c l y a c c e s s i b l e w e b s i t e , i n w h o l e o r i n p a r t .
Looking Back • Define business and the role of business in the economy.
• Explain the evolution of modern business.
• Discuss the role of nonprofit organizations in the economy.
• Outline the core factors of production and how they impact the economy.
• Describe today’s business environment and discuss each dimension.
• Explain how current business trends impact your career choices.
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