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1. Introductionto BusinessLesson II

   Ass. Prof. Özgür Kökalan İstanbul Sabahattin Zaim University
2. LessonObjectives Define theconcept of Business Difference between business and not-for-profit organizations and identify the factors of production. Describe the economicsystems and explain how competition and entrepreneurship contribute to the system.
3. What is business?
4. Business:profit seeking activity that provides goods and services to satisfy consumers’ needs. Business:consists of allactivitiestoservegoodsandservicestothecommunitywiththepurpose of profitforsurviving. Profits:financial rewards received by a businessperson for taking the risks involved in creating and marketing want-satisfying goods and services.
5. Business is socrucial (important) foreconomies. Why?
6. Business is socrucial (important) foreconomies. Why? Business ( firm), Offers necessities Provides jobs Pays taxes Reinvests profits Creates higher standard of living
7. Organizations: deliberatelyestablishedgroupsworkingtogether in a systematicwayforcommonpurpose Therearetwokinds of organization : Profit SeekingOrganizations: the main aimtotakeprofitfromtheiroperations Not For Profit Organizations: Businesslike establishments that have primary objectives other than returning profits to their owners
8. The Corporate Angel Network: A Not-for-Profit Organization
9. Labor Intensive versus Capital Intensive Businesses Capital Intensive Labor Intensive rely on human resources to prosper require large amounts of money or equipment to start and to operate
10. Factors of Production Resources societies use to produce and distribute goods and services. Businesses rely on five factors of production to optimize profits. What do weneedtoproducesomething?
11. Human Resources Capital Knowledge Entrepreneurs Natural Resources
12. Factors of Production Natural resources: assets useful in their natural state (land, minerals, water, and forests). Human resources: anyone involved in the production of goods and services Capital: resources such as money, equipment, and buildings necessary for production of goods and services. Entrepreneurs: innovative risk-takers who create and operate new businesses Knowledge: the collective intelligence of an organization
13. Whichfactor is themostimportant?
14. EconomicSystem EconomicSystem: Basic set of rules for allocating a society’s resources Answers three questions: What to produce How much to produce Who gets what Therearemainlyfourkinds of economicsystem in theworld. Theseare: Free market economy ( Capitalism) Communism Socialism Mixed Economy
15. Communism Therearesomecharacteristics of communismlistedbelow: Governments control all or part of resources Governments limit individuals’ freedom of choice Government sets goals Examples: North Korea, Cuba
16. Socialism Therearesomecharacteristicsof listedbelow: Governments control majorindustiries in thecountry Itprovidesmore individuals’ freedom of choicethancommunism Majority of peopleworkforgovernmentownedindustires. But smallbusinessownedbyprivateperson is encouraged. Examples: Sweden, India, Syria, Israel
17. Mixed Economy Therearesomecharacteristics of listedbelow: majorindustiries in thecountryareownedbybothgovernmentandindividuals Itprovides individuals’ freedom of choice in manyareas peopleworkforbothgovernmentownedindustiresandprivateenterprises. Examples: Turkey, Romania, Italy, France
18. Free Market Economy ( Capitalism) Infree market economics, Marketplace determines what goods and services get produced.
19. Basic Rights in the PrivateEnterprise System
20. Free Market Economy Free market economyhavethreeimportantrules. Theseare: Theory of Supply and Demand Competition Some Government Intervention
21. Theory of SupplyandDemand Accordingtofree market economy, allthings in market aredeterminedbysupplyanddemand, not bygovernment. It is called as invisiblehand. Supply; The number of products that businesses are willing to sell at different prices at a specific time Businesses are willing to supply more of a good or service at higher prices because the potential for profits is higher. Demand; The number of goods and services that consumers are willing to buy at different prices at a specific time. Consumers are usually willing to buy more of an item as its price falls because they want to save money.
22. SupplyCurveforGasoline
23. DemandCurveforGasoline
24. Equilibrium Point forGasoline
25. Competition Market in which two or more suppliers of a product serve the same customers. Therearesomekinds of competition in the market. Theseare: Pure competition Monopolistic competition Oligopoly Monopoly
26. PureCompetition Inpurecompetition, Multiple buyers and sellers exist Nearly identical products/services Low barriers to entry (sellers can easily enter and exit the market place) No single firm or group of firms can influence price Example; Agricultureproduct
27. MonopolisticCompetition Inmonopolisticcompetition; Varying degrees of competitive power Most advanced free-market economies features monopolistically competitive firms Large number of sellers Differentiated products—very similar—single distinguishing feature Example; Retailing
28. Oligopoly Inoligopoly, Industry dominated by only a few sellers Similarproductareofferedtoconsumer Differentiatial is soimportat. Example: GSM operators in Turkey, Airlinecompaniesin domesticlines.
29. Monopoly Inmonopoly; Single seller controls the supply of a good and service Ability to determine the price There is nocompetition in the market Example; TCDD