Understanding Business

2. Understanding Business

3. What is Business? Formal Definition • Production/sale of goods and/or services • Satisfy needs, wants, demands of consumers • Purpose of making a profit.

4. What is Business? Good • Tangible product (see + touch) • Exchanged for $ • Satisfies needs and wants. Service • Intangible item (cannot see or touch) • Exchanged for $ • Satisfies needs and wants. Goods And Services

5. What is Business? Want • Pleasure and comfort item • Not necessary for survival Need • Item required for survival Consumer • A person who buys goods and services. Producer • Individual or business that makes a product. Profit • Owner’s reward for risk taking • Money left over from sales after the costs and expenses of operating a business have been paid. Goods And Services

6. What Is A Market? – EBay? E-Commerce is a method of direct distribution that uses the Internet to sell products directly to consumers.

7. Demand, Supply, and Price Demand • Quantity of a good or service • Consumers • Willing and able to buy. Law of Demand • Prices Decreases; Increase Demand; • Price Increases; Decrease Demand. • Remember P.Diddy-“PDID” & Mr. T “PIDD”-ying the fool!

8. Demand, Supply, and Price Supply • Quantity of a good or service • Provided by Producers Law of Supply • Prices Increase; Supply Increases • Prices Decrease; Supply Decreases. • Remember “PISI” & “PDSD”

9. Essential Goods & Services Essential Good • Tangible • Necessary for survival. Essential Service • Service necessary for survival • Essential goods and services = Needs

10. Luxury Goods & Services Luxury Good • Tangible product • Not necessary for survival Luxury Service • Service not necessary for survival. • Luxury goods and services = Wants

11. Factors Affecting Demand and Supply Demand • Change in consumers’ expectation of future conditions. Supply • Change in number of producers • Price of related goods

12. As price decreases the more of the product that is demanded. Demand- Demand Curve $ D Quantity Demanded

13. Profit & Competition Profit • Income left over after all costs and expenses are paid. • Enables growth & expansion • Long term lack of profit = collapse of organization Expenses • Costs of operating and running a business • Assets used up in the process. Costs • $ required for each stage of production

14. Profit & Competition Competition • 2+ businesses sell same g/s to consumer Free Enterprise In Canada • Private ownership of Economic Resources • Production decisions made by individual owners Consumer Benefits • Lower prices • Better quality g & s • New products

15. Keys To Business Survival • Know the world around you. • Make sure the world knows who you are. • Continually search to find ways to make your product or service valued. - If not it and/or you might be replaced. • Take risks • Be adaptable and change - If not you become outdated or outmoded. • Give the people what they want - If not you become not wanted.

16. InterdependenceOf Economic Resources • Natural Resources • Human Resources • Capital Resources

17. The Five-Step Decision Making Model • Define the decision to be made. • Identify the alternatives. • Evaluate the advantages and disadvantages of each alternative. • Make a decision and take action. • Evaluate the decision and action taken.