Business
entities that offer products to their customers to earn a profit
Profit
when a company's revenue is greater than its expenses
Good
refers to a physical product a business sells
Service
refers to an intangible product that is bought or sold
factors of production
the resources used to produce goods and services
labor
the human resource that refers to any physical or intellectual work people contribute to a business's production
natural resources
the raw materials provided by nature that are used to produce goods and services. Basically found in ground or above ground
Real capital
physical facilities used to produce goods/services. EX: buildings
Financial capital
money from loans, investors, fundraising, and personal savings.
Entrepreneurs
people who assume the risk of creating, organizing, and operating a business and direct all the business resources. Entrepreneurs are a human resource, just like labor, but what sets entrepreneurs apart from labor is their willingness to bear risks and th
technology
refers to items and services (EX: smartphones and software) that make businesses more productive.
intellectual property
the ownership of ideas and creative works in the form of patents, copyrights, and trademarks. EX: Intellectual property creates a competitive advantage for drug companies that own patents on a popular and effective drug as well as for technology companies
Competition forces companies to:
- Improve their product offerings
- Lower their prices
- Aggressively promote their brands
- Focus on customer satisfaction
Regulated monopolies:
Must get approval from state or city for every increase in profit. EX: AT&T
Employee Empowerment
allows employees to solve customer concerns without management approval.
Social environment
environment is an interconnected system of different demographic factors such as race, ethnicity, gender, age, income distribution, sexual orientation, and other characteristics. Social, economic, and political movements and trends cause the social enviro
green economy
factors ecological concerns into its business decisions.
globalization
a movement toward a more interconnected and interdependent world economy
multinational enterprises
companies that have operations in more than one country, are among the leaders of globalization. Companies such as Nike, McDonalds, and Coca Cola have operations around the globe.
globalization
relocate production facilities overseas or subcontract at least some components of products to foreign companies around the world at low costs. A result of globalization.
telecommute
work from a location away from the office
teleconferencing
keeps CEOs and other corporate representatives from having to travel for meetings. It is also allowing companies to communicate easily.
E-commerce
primarily consists of several different kinds of business: business-to-consumer (B2C), business-to-business (B2B), and consumer-to-consumer (C2C).
local business
serves a small area around it. companies generally have a small number of employees and are associated with the town or city in which they are located.
Regional business
serve a wider area although, like local companies, they do not serve a national or international market.
Undercapitalization
occurs when a business owner cannot gain access to adequate funding. Many small businesses fail when the economy slows down because consumers are less likely to spend extra money.
national business
has several outlets throughout the country, but it does not serve an international market. It provides goods or services to virtually all U.S. residents, no matter where in the country they live.
Special challenges:
Budget and finances
Must be aware of al
supply chain
the process by which products, information, and money move between supplier and consumer. The product flows from supplier to manufacturer to wholesaler to retailer to consumer. The bigger a business is, the longer and more complicated the supply chain bec
multinational business
provide goods or services to international consumers or have suppliers or production facilities in other countries.
Special challenges:
Differences in international laws
Cultural differences
Economic differences