Chap1 (1).ppt

**Entrepreneurship and Wealth Building

Goods -- Tangible products such as computers, food, clothing, cars and appliances.

Services -- Intangible products that cannot be held in your hand, like education, healthcare, insurance, recreation and travel.

Success in business is often based on the strategy of finding a need and filling it.

GOODS and SERVICESLG11-*

**Entrepreneurship and Wealth Building

Business -- Any activity that seeks to provide goods and services to others while operating at a profit.

Entrepreneur -- A person who risks time and money to start and manage a business.

Successfully filling a market need means you could make money for yourself and provide jobs for others.BUSINESS and ENTREPRENEURSHIPLG11-*

**Revenues, Profits and Losses

Revenue -- The total amount of money a business takes in during a given period by selling goods and services.

Profit -- The amount of money a business earns above and beyond what it spends for salaries and other expenses.

Loss -- Occurs when a business expenses are more than its revenue.

REVENUE, PROFIT AND LOSSLG11-*

**Matching Risk with Profit

Risk -- The chance an entrepreneur takes of losing time and money on a business that may not prove profitable.

Businesses take risks, but with great risks could come great profit. (movie producing, high-tech ind)

Different businesses tend to have different levels of risk.

RISKLG11-*

**Businesses Add to the Standard of Living and Quality of Life

Standard of Living -- The amount of goods and services people can buy with their money.Quality of Life -- The general well-being of a society in terms of its political freedom, natural environment, education, healthcare, safety, amount of leisure and rewards that add to personal satisfaction. (sometimes it is subjective)

QUALITY of LIFELG11-*

**Responding to the Various Business Stakeholders

Stakeholders -- All the people who stand to gain or lose by the policies and activities of a business and whose concerns the businesses need to address.

Who are Stakeholders? Customers Employees Stockholders Suppliers Dealers Community Members Media Elected Officials EnvironmentalistsSTAKEHOLDERSLG11-*

**Responding to the Various Business StakeholdersOutsourcing -- Contracting with other companies (often in other countries) to do some of the firms functions

Insourcing -- Foreign companies opening offices and factories in the home country.

OUTSOURCING and INSOURCINGLG11-*

**Using Business Principles in Nonprofit Organizations

Nonprofit Organization -- An organization whose goals are for the betterment of the community, not financial gains.

Social Enterprises Adopted the business model to operate the business, with the main purpose of achieving specific social objectives.

Social Entrepreneurs people who use business principles to start and manage nonprofit organizations and help address social issues.

NONPROFIT ORGANIZATIONSLG11-*

**Entrepreneurship Versus Working for OthersThe UPs

The freedom to succeed.Make your own decisions.High possibility of wealth.Hire your own staff.

The DOWNs

The freedom to fail.No paid vacations.No fringe benefits. (e.g. education/housing/ medical allowance)High commitment.THE UPS and DOWNS of ENTREPRENEURSHIPLG21-*

**The Importance of Entrepreneurs to the Creation of WealthLand

Labor

Capital

Entrepreneurship (most important)

Knowledge

Entrepreneurs use what they have learned to grow their businesses and increase wealth.Knowledge is about how to make use of information, idea, and experience.

FIVE FACTORS of PRODUCTIONLG21-*

**The Business EnvironmentTODAYS DYNAMIC BUSINESS ENVIRONMENTLG21-*

**The Economic and Legal EnvironmentA government can promote business by:

Minimizing spending and keeping taxes and regulations to a minimum.Allowing private ownership of businesses.Minimizing interference with the free exchange of goods and services.Passing laws that enable businesspeople to write enforceable contracts.Establishing a currency thats tradable in world markets.Minimizing corruption. (ICAC)GOVERNMENTS ROLE in BUSINESSLG31-*

**How Technology Benefits Workers and YouTechnology -- Everything from phones to copiers and the various software programs that make businesses more effective, efficient and productive.

Effectiveness -- Producing the desired result.

Efficiency -- Producing goods and services using the least amount of resources.

Productivity -- The amount of output you generate given the amount of input (example: hours you work).BENEFITS of TECHNOLOGYLG41-*

**The Growth of E-CommerceE-Commerce -- The buying and selling of goods on the Internet.

B2C: Business to ConsumerB2B: Business to Business

E-COMMERCELG41-*

**Using Technology to Be ResponsiveDatabase -- An electronic storage file that enables stores to monitor what you buy and helps them know what to carry in stock.

Identity Theft -- Gathering of individuals personal information, such as ID card number, phone number, and credit card number, for illegal purposes.

DATABASES and IDENTITY THEFTLG41-*

**The Competitive Environment Customers want quality products at a good price with excellent customer service.

Because business is more customer-driven, some managers give frontline employees more decision-making power.

Empowerment -- Giving frontline workers the responsibility, authority, and freedom to respond quickly to customer requests.USING EMPOWERMENT to COMPETE in TODAYS MARKETLG51-*

**The Social Environment and Managing DiversityPopulation shifts are creating opportunities for some and limiting others.

Diversity has grown from recruiting minority and female workers.

Growth of single-parent households have encouraged businesses to implement programs such as family leave and flextime. U.S. POPULATION CHANGES LG61-*

**The Social Environment and Managing DiversityDemography -- The statistical study of the population in terms of size, density and characteristics like age, race, gender and income.

Some demographic trends in Hong Kong: -- Income polarization -- Ageing -- Labor shortage

DEMOGRAPHYLG61-*

**The Global EnvironmentGrowth of global competition

Increase of free trade among nations

More efficient distribution systems and communication advances.

War and Terrorism.

IMPORTANT CHANGES to the GLOBAL ENVIRONMENTLG71-*

**The Ecological EnvironmentClimate Change -- Movement of the temperature of the planet over time.

Many companies like GE, Coca Cola, British Airways and Shell are shifting their practices to save energy and produce products that cause less harm to the environment. This process is called greening.GLOBAL GREENINGLG71-*

**The Evolution of U.S. Business

Agriculture Era

Manufacturing Era

Service Era

Information-Based EraThe EVOLUTION of BUSINESSLG81-*

**Progress in the Agricultural Industry

In the 1800s, the agricultural industry led economic development.

Technology (like the harvester) changed the farming industry making it more efficient.

This led to fewer farmers with larger farms.

The AGRICULTURAL ERALG81-*

**Progress in the Manufacturing Industry

Industrialization in the 19th and 20th centuries, moved jobs from farms to factories.

As technology improved productivity, fewer workers were needed in factories.The MANUFACTURING ERALG81-*

**Progress in the Service Industry

Services make up more 70% of the U.S. economy.

Since the mid-1980s, the service industry generated almost all the increases in employment.

More high-paying jobs in service than goods-producing industries. The SERVICE ERALG81-*

**Your Future in Business

Information technology will affect all sectors of the economy: AgriculturalIndustrial Service

It improves efficiency and change the way of doing business

The INFORMATION TECHNOLOGY ERALG81-*

Evolution of H.K. BusinessPredomination of manufacturing industries in the 60s and 70s

Growth of service industries in the 80s and 90s

Future: Knowledge-based economy?

Some Key Issues in HKCompetitiveness of the economy (declining over time?)

Quality of human resources

Economic integration with China

Role of Government in promoting economic growth

Deep-level contradictions

Four Key Industries in HKFinancial servicesTrading and logistics Tourism Producers and professional services They together constituted 58.0% of Gross Domestic Product (GDP) and employed 47.2% of the labor force in 2012

Six Industries With Clear AdvantagesCultural and creative industriesMedical servicesEducational servicesInnovation and technologyTesting and certification servicesEnvironmental industriesAll together, in 2012, they constituted 8.7% of GDP and employed 11.9% of labor force

****Ways to overcome the risk:Diversify and Spread the risk Find out where the risk come from and good understanding ( govt policy? )Minimize the risk *High standard of living doesnt mean a high quality of life Ways to measure the quality of life:

*They have different concerns Challenge is to strike a balance between making profits and fluffing the stakeholdersThey need to realize the needs of stakeholders and response to them (meet the request of different stakeholders)

*Cost consideration is the main reason for outsourcing (lowering the expenses) Keep the basic function in the local company and outsource the others

Ask our company to provide service for them Reason : the adv of the local (HK) goodMore job opportunity in local

*Nonprofit org : e.g. university

Hire the minority and disability people help solve the social problem by providing job opportunity Earn the profit for helping the needs instead of entering the pocket of the owner

**Knowledge; how to make use the information, idea and experience of the organization make better decision enhancing efficiency and creaction Better knowledge higher chance to success

Knowledge base economy:Economy which is base on information, distriburion, knowledge We need to have a gd eduction system u graduates who are familiar with the new technology e.g. enginerrer

*Not only pay attention to the local business environment but also the global (external environement ) *1 is an important philosophy : 2: protect provertys right

*****

When discussing the demographic changes experienced in this country over the past 30 years it often helps to use the grocery store as an example. The grocery store has evolved from a market selling primarily raw materials used to produce a meal into stores that now serve pre made products which simply involve heating and eating. Why? Some would argue this change has more to do with the two income and single-parent household than any other environmental factor. Engaging students in this discussion is often useful to their understand of how businesses must adapt to changing demographic circumstances. **

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Chap1 (1).ppt

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