Success in business is based on constantly adapting to the market Business any activity that seeks to provide goods and services to others while operation at a profit Goods are tangible products i e computers and food Services are intangible products i e education and insurance Entrepreneur a person who risks time and money to start and manage a business Revenue is 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 needed to run the operation loss when a business s expenses are more than its revenues Risk The chance an entrepreneur takes of losing time and money on a business that may not prove profitable big risk big profit how wealthy you are Standard of living the amount of goods and services people can buy with the money they have US has a very high standard of living largely b c the wealth of business businesses pay taxes SOL should lead to QOL Quality of Life Hard to have QOL without SOL and rewards that add to the satisfaction and joy that other goods and services provide Working to build a higher SOL may lower the QOL if it means less time with family more stress Quality of life refers to the general well being of a society in terms of its political freedom natural environment education health care safety amount of leisure Stakeholders are all the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address a person or group who has skin in the game a change in the business would impact these people employees customers stock holders suppliers dealers bankers people in surrounding community not government and media Outsourcing contracting with other companies often in other countries to do some or all the functions of a firm i e production or accounting tasks consequences include losing jobs to oversee competitors cheaper products due to cheap labor vs Insourcing foreign companies setting up design and production facilities here in the US i e Hyundai has design and engineering HQ in Detroit and production HQ in Alabama Nonprofit organizations An organization whose goals do not include making a personal profit for its owner or organizers often do strive for financial gains but they use them to meet their social or educational goals rather than personal profit Social entrepreneurs are people who use business principles to start and manage non profits and social issues Being an entrepreneur vs working for others 2 ways to succeed in business 1 Rise through the ranks of large companies 2 Become an entrepreneur advantage somebody else assumes the company s entrepreneurial risk and provides ou with benefits like health insurance vacations receive no outside benefits But have the freedom to make your own decisions opportunity and wealth Women now own 1 3 of all businesses Factors of production resources used to create wealth 1 Land natural resources 2 Labor workers always considered a factor by itself and to respond with desired goods and services most important for creating wealth 3 Capital machines tools buildings anything used in the production of goods It may not include money money is used to buy factors of production but it is not 4 Entrepreneurship All the resources in the world have little value unless entrepreneurs are willing to take the risk of starting business to use those resources 5 Knowledge recently added very important information technology has revolutionized business making it possible to quickly determine wants and needs Note ethical governments are also needed a country s population can work hard but if no ethic is involved no profit may be made cid 127 cid 127 the surrounding factors that either help or hinder the development of business The business environment 1 The economic and legal environment 2 The technological environment 3 The competitive environment 4 The social environment 5 The global business environment 1 The economic and legal environment Government can either work with or against business cid 127 Gov w minimized spending and keeps taxes and regulations at a minimum policies that favor business cid 127 Gov promotes entrepreneurship by allowing private ownership of business cid 127 One of the best things the governments of LDC can do is to minimize interference with the free exchange of goods and services cid 127 Gov can lessen the risks of entrepreneurship by passing laws that enable business people to write enforceable contracts gov establish a tradable currency gov can minimize corruption Capitalism relies highly on honesty integrity and high ethical standard 2 The technological environment working for others benefit They provide you with the technology Technology makes business process more effective efficient and productive effectiveness producing the desired result IT Information Technology computers networks cell phones and especially the Internet have a strong impact on the business world today efficiency producing goods and services using the least amount of resources productivity the amount of output you generate given the amount of input i e hours worked The more you can produce in any given period the more you are worth to companies problem workers are so productive today that fewer are needed contributing to high unemployment rate E comerce They buying and selling of goods over the internet Business to consumer transactions B2C Business to business transactions B2B businesses sell goods and services to one another i e IBM selling consulting services to a local banks Databases allow stores to carry only the merchandise their local population wants and enables them to send you catalogs offering the kinds of products you wants negative of databases allows for Identity theft 3 The competitive environment Companies have to offer both high quality products and good value that is outstanding products at competitive prices with great service adjust the firm s products policies and practices accordingly quickly to consumer requests Fastest growing industries lawyers see pg 22 26 4 The social environment Competing by exceeding customer expectations successful organizations now listen more closely to customers to determine their wants and needs and then Competing by restructuring and empowerment giving frontline workers the responsibility authority freedom training and equipment hey need to respond demography the
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