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1Define business and discuss 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 affect the economy

Describe today’s business environment and discuss each key dimension

Explain how current business trends might affect your career choices

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Business Now: Change is the Only Constant

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Organizational Change

￭ Successful firms embrace change Seek opportunities and avoid pitfalls Carefully evaluate risks Understand market and adhere to

ethical practices Generate long-term profits by

delivering unsurpassed value to the customers• Value: Relationship between the price of a

good or a service and the benefits it offers

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Business Basics: Putting It All in Context

￭ Business: Organization or activity that provides goods and services in an effort to earn a profit￭ Profit: Money earned in

sales/revenue, minus expenses￭ Loss: When expenses are greater

than revenue

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Business Basics: Putting It All in Context

￭ Entrepreneurs: People who risk their time, money, and other resources to start and manage a business￭ Standard of living: Quality and

quantity of goods and services available to a population￭ Quality of life: Overall sense of

well-being

©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Evolution of Modern Business

Industrial Revolution

Entrepreneurship Era

Production Era

Marketing Era

Relationship Era

©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Nonprofits

￭ Business-like establishments that employ people and produce goods and services Aim to contribute to the community

rather than generating financial gain

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Building Blocks of Production

￭ Factors of production: Fundamental resources required to achieve organizational objectives Natural resources Capital Human resources Entrepreneurship

• Aids economy by creating opportunities and by harnessing other factors of production

©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Business Environment

￭ Setting in which business operates￭ Makes critical difference in

whether an economy thrives or disintegrates

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Exhibit 1.1 - Business Environment

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Leading Edge Versus Bleeding Edge

￭ Speed-to-market: Rate at which a firm transforms concepts into actual products Key source of competitive advantage

￭ Bleeding-edge firms - Launch products that are too far ahead of the market￭ Leading-edge firms

Offer products as the market becomes ready to embrace them

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 Workforce Advantage

￭ A key resource for firm’s competitive advantage￭ Research suggests:

Investing in worker satisfaction yields tangible, bottom-line results

￭ Cultivating human resources allows to compete as the market for top talent tightens

©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Business Technology

￭ Tools used by businesses to become more efficient and effective￭ World Wide Web: Allows computer

users to easily access and share information on the Internet￭ e-commerce: Business transactions

conducted online, typically via the Internet

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Social Environment: Demographics

￭ Measurable characteristics of a population Population size and density, age,

gender, race, education, and income

￭ Reason behind difference in social environment of various countries

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Social Environment

Diversity

Aging population

Rising worker expectations

Ethics and social responsibility

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Global Environment

￭ Free trade: International political economic movement designed to help goods and services flow more freely across international boundaries

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Global Environment

￭ General agreements on tariffs and trades (GATT): International trade agreement that lowers tariffs and promotes free trade worldwide Lowered prices and increased quality

across product categories

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Web-link: Free Trade Helps Reduce Poverty

￭ Web-link presents the highlights of a study which indicates that free trade enables economic growth and helps to alleviate poverty

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http://www.wto.org/english/news_e/pres00_e/pr181_e.htm

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Global Environment: Multi-Pronged Treats

￭ War and terrorism 9/11 attacks decimated the travel

industry

￭ Disease SARS flu affected the economies of Hong

Kong, Beijing, and Toronto

￭ Natural disasters   Indian Ocean tsunami wiped out the

fishing industry on the Indian and Sri Lankan coastlines

Reality TV Video Slide

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www.cengage.com/introbusiness/book_content/9781285187822_kelly/videos/01startupjunkies.html

© iStockphoto.com / DNY59

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￭ Which factors of production natural resources, capital, human resources, and entrepreneurship are especially important for the future success of Earth Class Mail? Explain why these factors are essential.

￭ How do the dimensions of the business environment affect the ability of Earth Class Mail to rapidly scale up its operations? Explain your answer.

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©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Business and You

￭ Both, broader economy and individual business skills influence the level of financial success￭ Entrepreneurship as a career

choice requires following individual passion Boosts chances of both financial and

personal success

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Contemporary Business Scenario

￭ Complex, global, and rapidly changing￭ Complete impact of the global

economic crisis remains unclear￭ Technology continues to change the

business landscape￭ New focus on ethics and social

responsibility transforms the role of business in society

©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Define business and discuss 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 affect the economy

Describe today’s business environment and discuss each key dimension

Explain how current business trends might affect your career choices

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