Bài giảng Economics - Chapter 1 The Dynamics of Business and Economics

Chapter OneThe Dynamics ofBusiness and EconomicsBusiness Vs. NonprofitOrganization$ BusinessAn individual or organization that tries to earn a profit by providing products that satisfy people’s needs, ex. IBM.Nonprofit OrganizationProvides products, especially services, for some purpose other than profits, ex. The Salvation Army.1-1The People andActivities of BusinessPeople: Owners Employees CustomersActivities: Management Marketing Finance1-2Why Study Business?It provides employment for most people.It provides the majority of products needed to survive and enjoy life.It will help prepare you for your future career.It will help you become a better informed consumer and member of society.1-3Types of ResourcesUsed by BusinessNatural - land, forests, etc. (not made by people)Human - physical/mental abilities used by people to produce goods and servicesFinancial - funds needed to acquire needed natural and human resources1-4Basic Questions to Be Asked of Economic Systems1. What goods and services and what quantity will satisfy the needs of the consumer?2. How will the goods and services be produced? Who will produce them and with what resources?3. How are the goods and services to be distributed to the consumer?1-5Comparison of Communism, Socialism, and Capitalism1-6aComparison of Communism, Socialism, and Capitalism1-6bEconomic Systems and Where They OccurCommunism: China North Korea CubaSocialism: Sweden India France IsraelCapitalism: Canada United States Australia Japan1-7Equilibrium Priceof Soft Drinks1-81.001.351.000.700.4001234567Cans of Soft DrinksPrices ofSoft Drinks$SupplyCurveDemandCurveEquilibriumPriceFour Competitive EnvironmentsPure Competition Many small businesses sell one standardized product.Monopolistic There are fewer businesses than in a competition pure-competition system, and the differences between the goods they sell are small.Oligopoly Very few businesses sell a product; the product they sell can be similar or different.Monopoly There is only one producer of a product in a given market.1-9The EconomyThe Early Economy1-10The Industrial RevolutionThe Manufacturing andMarketing EconomiesThe Service andInternet-based EconomyConsumer Buying Plans1-11Source: USA Today, February 3, 1999, p. B-1Adults who plan to make these purchases in one year:26%26%24%21%18%13%12%24%ComputerSuitNew carUsed carTVWatchHouseRefrigeratorTen Steps for ImprovingCustomer Service1. Shift perspectives (think innovatively about customer’s needs).2. Reorder priorities (decide what is truly important and do it first).3. Develop faster reflexes (make a decision and act).4. Get focused. Stay focused. (find out what works and concentrate on that).5. Simplify (search for easier solutions).1-12aSource: Sam Geist, “Ten Action Steps for Changing Times,” The Small Business Journal, October 12, 1998.Ten Steps for ImprovingCustomer Service6. Be flexible (choose the most appropriate tool to meet a challenge).7. Overcome the fear of failure (fear inhibits the ability to change).8. Become a problem solver (customers want solutions).9. Energize (be action-oriented and future-focused).10. Listen (for opportunities).1-12bSource: Sam Geist, “Ten Action Steps for Changing Times,” The Small Business Journal, October 12, 1998.Why Use the Internet?Fast, inexpensive way to deliver informationLower administration and service costsQuick feedback on new productsImproved customer serviceInstant global audienceLevel playing field for competitionEnhanced business-to-business linksCompetitors are probably using1-13Source: Sara Record, “Keys to the Kingdom,”Profit Magazine, November 1998, p. 57.The Changing Faceof the Internet1-14Source: USA Today, March 2, 1999, p. A-1Internet users remain younger, more educated and richer than North Americans as a whole, but newer users are less so. Users who began in past year vs. users more than a year.Male 48% 55%Female 52% 45%Age 50 or older 20% 19%Household incomeunder $30,000 23% 16%Never attended college 39% 22%New userVeteranWomen Entrepreneurs Are More Likelyto Utilize Technology Than Their MaleCounterparts. Frequently use e-mail 51 40Subscribe to an onlineservice 47 41Have a home page 23 16Conduct research usingthe Internet 22 14Use technology for growth 17 101-15Source: National Foundation for Women Business Owners,“Going Techno,” Entrepreneur, January 1998, p. 31.Technology% ofMen% ofWomenE-commerce Facts$10.4B orders received over the Internet in 2001 an increase of 43.4% from 2000.E-commerce represented only 0.5% of total revenues in 2001Four firms stopped Internet selling for every five that started in 2000.1-16Who Sells Over The InternetWholesalers sold $1.9B up 83.9% from 2000Manufacturers sold $1.7B up 83.9 5 from 2000Retailers sold $1.5B up 66.9% from 2000Businesses with more than 500 employees accounted for 40% of internet sales down from 43% in 2000.1-17Do You Speak Business?(current workplace language)People Churner A boss who drives away talented peopleBottom Fisher Person willing to dive into seemingly hopeless situationsBoomerang Worker Retiree returning to former employerToxic Employee Worker with anti-employer reputation or attitude1-18Source: “The List: Do You Speak Business?,” Business Week,November 16, 1998, p. 6.Solve the DilemmaExplain and demonstrate the relationship between supply and demand for Mrs. Acres Homemade Pies. 1-19Explore Your Career OptionsWhat are some of the changes in the work environment that contribute to the transformation of the traditional career track?1-20Wrong Place, Wrong Time (“Not So Hot” Jobs)1-21Source: Robert McNatt, “Up Front”, Business Week,March 8, 1999, p. 6.1. Vice-President for Retail Operations -94%2. Vice-President for Government Sales -81%3. Oil Executives -62%4. President/CEO of Managed Care -56%5. Vice-President for Computer Hardware Sales -53%6. Wall Street Real Estate Financing Execs -49%7. Traditional Vice-President for Environment,Health, and Safety -41%8. Russian Specialist Investment Banker -38%9. Owner, “Storefront” Travel Agency -33%10. Traditional Publishing Executive -30%Job TitleProjected Decreasein Search DemandAdditional Discussion Questions and Exercises1. Which economic system provides for central government planning to determine what goods and services will satisfy needs of citizens?2. How did the Industrial Revolution affect the agricultural economy in Canada?3. What characteristics of modern entrepreneurs are similar to those of early entrepreneurs?1-22Chapter 1 Quiz1-23a1. The activities designed to provide goods and services that satisfy customers are know as a. management b. marketing c. finance d. gross national product2. Which of the following best describes inflation? a. a continuing decrease in product prices b. a moderate decrease in demand c. a continuing increase in unemployment d. a continuing increase in pricesChapter 1 Quiz1-23b3. The airline business in the Canada is an example of what form of competition? a. pure competition b. monopolistic competition c. oligopoly d. monopoly4. The quantity of products and services that consumers are willing to buy at different prices at a specific time is a. supply b. demand c. competition d. gross national productVideo Case Question 1 What different roles and tasks does the owner Brad Miller, face in his vocation as entrepreneur?1-24Brad Miller Roles Roles:Chief Executive OfficerChief Financial OfficerProduction SupervisorMarketing MangerController1-25Brad Miller TasksTasksFinancial planningOperations ManagementMarket researchSalesSupervision of employees1-26Video Case Question 2What role does the accountant play for Brad Miller and his financiers?1-27THE ACCOUNTANT’S ROLEFor Brad Financial plannerStatement preparerAccounting servicesFor the Financiers Provision of assurance on accuracy of financial statements 1-28Video Case Question 3At the stage the video leaves us in the progress of the Classic Cheesecake Company, what major functions has Brad been focusing on and what roles are needed to be addressed if his family will see the promising future he is planning for them.1-29Brad’s Current FocusProductionMarketingExpansion 1-30Roles To Be AddressedPlanning - financial - production - human resourcesBrad will have to be a “Manager” learning to delegate some areas of control .1-31