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Characteristics of Business

Characteristics of Business. Nature of Business. Profit=Earned income-Costs 3 major activities of business: Production-making the product Marketing-how goods/services are exchanged between producers and consumers Finance-money matters Supply vs. demand 2 major types of business:

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Characteristics of Business

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  1. Characteristics of Business

  2. Nature of Business • Profit=Earned income-Costs • 3 major activities of business: • Production-making the product • Marketing-how goods/services are exchanged between producers and consumers • Finance-money matters • Supply vs. demand • 2 major types of business: • Industrial-produce goods used by other businesses • Commercial-Sell to consumers • Changing nature of business-must react quickly to the changing nature of society, be innovative

  3. Impact of Global Competition • 100s of years, we led the way • Americans purchase American goods • Last 30 years, others have become industrialized • Americans purchase American and foreign • More efficiency and effectiveness in production • Better quality products • Better prices • Less jobs in America • Specialization of worker talent-experts • Technology and innovation (better quality, faster) • Reorganization (drop unprofitable products, increase technology, empowering workers, redesign workflow)

  4. Business Growth and Prosperity • Gross domestic product (GPD) total market value of all goods/services PRODUCED in a yr. (overall well being of nation) • Illegal transactions are not recorded (underground economy)-Increases in poor economic times • Review the GDP chart for 1987-1998 on pg. 14 • What was the GDP for the US in 2010? • $ 14.76 T • Well being of individuals-household ownership

  5. Entrepreneurship • Popularity of small businesses • Individuals have a strong desire • easy to do • Growth of small businesses-lg. began as sm. • Growth of Franchise business • initial fee and 3-8% of weekly sales • pay for rights to sell • 5-10% fail (much lower than non-franchised) • 12% of all bus. are franchised, grown steadily • Risks of Ownership • Well managed=adequate income (usually) • Risk-possibility of failurecompetition, change is price or style, changes in economic conditions See chart pg. 20 • Thousands fail annually • Obligations of Ownership • Duty to all stakeholders-if go under and owe money-suffer a loss • Customers, workers, mgmt, competitors, investors, public

  6. Intrapreneurship • Provided to keep creative employees on your staff instead of competition. • Employee Stock Ownership Plan (ESOP) • Permits ee’s to own the co. in which they work –buy shares

  7. Assignment • Book pg. 23 • Definitions • Review Facts (1-15) • Discuss Ideas (1-12)

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