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Universitas Multimedia Nusantara (UMN) www.unimedia.ac.

id

Week 1

Content :
Understanding Business and
Concept of business,
profit, and production
Environment
Economic systems

Business environments

Jakarta, September 2008

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

The concept of business & the concept of profit

Content : • Business is an organization that provides goods or


services to earn profits

Concept of business, • Profits represent the difference between a


profit, and production business’s revenues and its expenses

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

What are factors of production?

Content : Resources used in the production of goods


and services—labor, capital, entrepreneurs,
physical resources and information
Concept of business, resources
profit, and production

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Factors of production

1. Labor / Human resources / Intelectual Capital

Content : 2. Capital

3. Entrepreneur

Concept of business, 4. Physical resources


profit, and production
5. Information resources

Can you name any others ?

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Economic systems around the world

Content :
An economic system is a nation’s system for allocating
its resources among its citizens.

Economic systems

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

1. Planned Economy

Content : Relies on a centralized government


to control all or most factors of
production and to make all or most
production and allocation decisions.
The Kremlin is shown above.

Economic systems

What is Communism?

Planned economy in which the government


owns and operates all factors of production

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

2. Market Economy

Content :

Economic systems

Relies on individuals to control production and allocation decisions


through supply and demand

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Circular Flow in a Market Economy

Content :

Economic systems

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

3. Mixed Market Economy

Content : Features characteristics of both planned and market economies

• Privatization is the process of converting


government enterprises into privately
owned companies

Economic systems • Socialism is a partially planned system in


which the government owns and operates
selected major industries

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

The Laws of Supply and Demand

Content : The law of demand:


Buyers will purchase (demand) more of a product as
its price drops and less as its price increases.

Economic systems
The law of supply:
Producers will offer (supply) more of a product for
sale as its price rises and less as its price drops.

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Evolution in Business

Production Era Marketing Era


Content :

Laissez-Faire & Global Era


Entrepreneurship Era
Economic systems

Information & Internet


Industrial Era
Revolution

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Organizational Boundaries

Content :
That which separates the organization from
its environment

Business environments

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Dimensions of the External Environment

Content :

Business environments

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

1. Economic environment

• Economic Growth
Content : – Aggregate Output and Standard of Living

– Gross Domestic Product (GDP) & Gross National Product (GNP)

• Purchasing Power Parity

– Productivity

– Balance of Trade

– National Debt
• Economic Stability
– Inflation
Business environments
– Unemployment

• Recessions and Depressions

• Global economy in 21st century

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

The global economy in the 21st century

Major forces driving the economy:


Content :
– The information revolution will continue to enhance productivity
across all economic sectors.

– New technological breakthroughs will create entirely new industries.

– Increasing globalization will create much larger markets while


fostering tougher competition among global businesses.

Business environments

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

2. Socio cultural environment

Conditions including the customs, mores, values and demographic


Content :
characteristics of the society in which an organization functions

Business environments

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Customer Preferences and Tastes

• Customer preferences and tastes vary both across and within


Content :
national boundaries.

• Consumer preferences can vary widely within the same country.

• Consumer preferences and tastes change over time.

Business environments

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

3. Business environment

• Core competencies
Content :
• Outsourcing

• Viral marketing

• Business process management

Business environments

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id
Universitas Multimedia Nusantara (UMN) www.unimedia.ac.id

Content :

Concept of business,
profit, and production thank you
Economic systems

Business environments

Exclusively prepared & presented by: Anna Riana Putriya e-mail: anna@unimedia.ac.id