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This 4 page Class Notes was uploaded by CassandraEngen on Tuesday February 2, 2016. The Class Notes belongs to BADM101 at University of North Dakota taught by Miller in Fall 2016. Since its upload, it has received 20 views. For similar materials see Introduction to Business in Business at University of North Dakota.
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Date Created: 02/02/16
BADM 101 Part 1 Chapter 1 TERMS Businesses – entities that offer products to their customers to earn a profit Competition - when two or more businesses contend with one another to attract customers and gain an advantage E-commerce – business conducted electronically on the internet Entrepreneur – someone who assumes the risk of creating, organizing, and operating a business and directs all ofits resources Expenses – money the company has to pay out Factors of production – Land, labor, capital (real and financial),entrepreneurial talent, intellectual property, technology Financial capital – money used to facilitate a business enterprise Globalization – movement towards a more interconnected world economy Goods – physical products a business sells Green economy – economy that factors economical concerns into business decisions Identity theft – illegal gain and use of personal information Intellectual Property – privately owned, intangible assets developed from intellect and creativity; patents, copyrights, trademarks Labor – any human resource that refers to any physical or intellectual work people contribute to a business’s production Local businesses – one of a kind business that relies on local customers to generate business Multinational enterprise – make and/or sell products in several countries National businesses – businesses that serve the whole nation, but not an international market Natural resources – materials provided by nature used to produce goods and services Not-for-profit organization - Seek service to their community through social, educational, or political means Offshoring – having facilities overseas rather than home country to achieve lower manufacturing costs Profit – when a company’s revenue is greater than its expenses Real capital – physical facilities used to produce goods and services such as office buildings or factories Regional business – serve areas larger than local businesses but smaller than national businesses Revenue – money that a business brings in Service – intangible product that is bought or sold Social environment – interconnected system of different demographic factors that affect businesses Social networking sites– websites that make it easier for people to connect to each other online andbusinesses Supply chain – flow by which a product, information, and money move between suppliersand consumers BADM 101 Part 1 Chapter 1 Technology - goods and services such as computers, software, and broadcasting, that makebusinesses more efficient and productive Telecommute – ability to work from home or another location away from the office Undercapitalization – when a business owner cannot gain access toadequate funding, therefore can no longer produce goods or services DEFINING BUSINESS Businesses offer products to customers with a goal to earn aprofit revenue > expenses = profit expenses > revenue = loss o Higher profits can allow a company to Reward employees Increase productivity Expand to new areas o Products provided by businesses:Goods and Services Successful businesses provide goods and services the consumers want and need Goods – physical products Clothes, furniture, groceries, makeup, sporting goods Services – intangible product; cannot be handled Haircuts, car insurance, massage Some companies offer BOTH goods AND services Restaurant franchises o When you go out to eat, you are paying for the food as well as the services necessary to prepare the food Different countries have different business models on whetherproducing goods or services dominate their market o Not-For Profits Organizations Do not pursue profits for their owners Seek service to their community through social, educational, or political means Universities, hospitals, environmental groups, charities FACTORS OF PRODUCTION Factors of Production – resources that businesses use to produce goods and services o Labor – any human resource; physical and intellectual o Natural Resources – raw materials; lumber, coal, oil o Real Capital – physical facilities used to produce goods and services; buildings, factories o Financial Capital – money used to make a business possible; acquired by loans, fundraising, personal o Entrepreneurial Talent– entrepreneur’s willingness to take risks and manage a business’s resources o Intellectual Property – privately owned, intangible assets developed from intellect and creativity; patents, copyrights, trademarks o Technology – goodsand services that make businessesmore efficient and productive COMPETITION Benefits consumers by motivating businesses to produce better and cheaper goods and services Competition thrives in free market economy BADM 101 Part 1 Chapter 1 o Forces companies to improve their products lower their prices promote their brand focus on customer satisfaction o Social Networking sites make it easier for businesses and consumers to connect Email, blogs, Facebook, twitter Share promotion/discounts Con: word of dissatisfaction can spread quick online o Employee empowermentis essential for a company to inspire workers to deal with customer needs SOCIAL ENVIRONMENT Race, ethnicity, gender, age, income, sexual orientation o Affect where we live, what we buy, and how we spend money o Target what market of consumers businesses are trying to sell to o Green Environment– economy that considers economical concerns when making business decisions o GLOBALIZATION Globalization is a movement toward a more interconnected and interdependent worldeconomy Businesses are more able to easily work across international borders Internet/technological advances make it possible for businesses of any size to compete globally Offshoring provides lower labor costs by having labor facilities placed overseas o Coach (American Handbag company) first outsourced facilities into china, butrecently have started moving towards lower-wage countries (India and Vietnam) Globalization has risks including o Increased competition (from international companies) o Security and patent protection o Unstable political climates o Fluctuations in value of money TECHNOLOGICAL CHANGES Businesses must stay up-to-date with technological advances to stay competitive Technology can keep a company flexible, organized, productive, and connected Con: keeping up with technology is expensive Telecommuting is becoming popular with today’s technology and less businesses are centrally located o Telecommuting makes it possible to find the right employee for a job no matter the distance o Teleconferencing keeps CEO’s and employees able to communicate with ease o Increase in telecommuting means companies can downsize offices Cheaper and easier to maintain Consumes less energy and resources E-commerce began to flourish with the start of Amazon andEBay in 1995 and has been growing ever since o Three main types of trade Business to consumer (B2C) Consumers buying from a business Buying books on Amazon.com Buying songs from iTunes.com BADM 101 Part 1 Chapter 1 Business to business (B2B) Sale of goods and services from one business to another Consumer to consumer (C2C) Etsy.com Consumers buying form other consumers o Internet has been around less than 20years and has notyet reached its full potential o As the number of people and businesses increase so does the number ofidentity theft victims o Access to information has become so convenient its moredifficult to keep things ‘private’ TYPES OF BUSINESSES Local Regional businesses o Local businesses Small bakeries, boutiques, restaurants, and specialty shops Serves a limited surrounding area Typically associated with the towns or cities they are located in o Regional Businesses serve areas larger than local businesses, but do not serve a national market o Challenges of local and regional businesses Undercapitalization is when a business can’t afford to produce goods or services To avoid debt, owner should save enough projected revenue to cover for the first year There is always a chance the economy cannot support the business National Businesses o Provides goods and services to the country, but not an international market o Became a standard symbol of US businesses o Laws vary from state to state, National businesses must be aware of these laws in which states they do business o Supply chains are the flow of products, information, or money between a supplier and a consumer get more complicated as businesses grow larger Multinational (International) Businesses o Make and/or sell products in several countries o McDonalds, but not every McDonalds is the same worldwide o In India, the large Hindu population has a McDonalds that has no beef in any menu items o Multicultural corporations must comply with the laws of the countriesthey operate o Multinational businesses must contend with the different economies worldwide
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