Professional Documents
Culture Documents
Business in a
Changing
World
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1-3
Learning Objectives
LO 1-1 Define basic concepts such as business, product, and profit.
LO 1-2 Identify the main participants and activities of business and
explain why studying business is important.
LO 1-3 Define economics and compare the four types of economic
systems.
LO 1-4 Describe the role of supply, demand, and competition in a
free enterprise system.
LO 1-5 Specify why and how the health of the economy is
measured.
LO 1-6 Trace the evolution of the American economy and discuss
the role of the entrepreneur in the economy.
LO 1-7 Evaluate a small-business owner’s situation and propose a
course of action.
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1-4
Business
●
Individuals or organizations who try to earn a profit by providing products
that satisfy people’s needs
Products
●
Goods or services with tangible and intangible characteristics that provide
satisfaction and benefits
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1-5
Tangible Servic
Goods es
Ideas
●
Dry cleaning ●
Professiona
●
Automobile Doctor’s ls generate
●
●
Computer checkup
Basketball
ideas for
●
Phone ●
game solving
●
Coat problems
●
Concert
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1-6
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1-7
Nonprofit Organizations
Nonprofit Organizations
Engage in
Do not share the management,
Provide goods
purpose of marketing and
and services
earning profits finance to reach
goals
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1-8
To Earn a Profit
Adapting
to Change
Abiding
Acting
by the
Ethically
Law
Financial
Resource
s
Profit
Marketing
Expertise
Manageme
nt Skills
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1-9
Stakeholders
~ Groups that have a stake in
the success and outcomes of
a business
~ Customers, employees,
investors, government
regulators, and community.
~ To achieve and maintain
profitability, businesses must
produce quality products,
operate efficiently, and be
Consumers are often willing
socially responsible and ethical to pay more for products
in dealing with stakeholders they perceive as
environmentally-friendly
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duplicated, forwarded, distributed, or posted on a website, in whole or part.
1-10
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1-12
Management
Staff
©
© 2016
2016 by
by McGraw-Hill
McGraw-Hill Education.
Education. This
This is
is proprietary
proprietary material
material solely
solely for
for authorized
authorized instructor
instructor use.
use. Not
Not authorized
authorized for
for sale
sale or
or distribution
distribution in
in any
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manner. This
This document
document may
may not
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be copied,
copied, scanned,
scanned,
duplicated, forwarded, distributed, or posted on a website, in whole or part.
1-13
Marketing
Determine
Determine Plan
Plan and
and
customer
customer needs
needs develop
develop product
product
Determine Determine
place distribution
Determine Determine
promotion price
The focus of
all marketing
activities is
satisfying
customers
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1-14
Finance
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1-15
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1-16
Bill Daniels
Economics
Economics
●
The study of how resources are
distributed for the production of
goods and services within a social The Young Americans Bank
system in Denver is the only bank in
the world that lends money
to individuals under the age
of 22
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1-18
Natural Resources
●
Land, forests, mineral, water, and other things not made by people
Intangible Resources
●
Such as a good reputation for quality products or being socially responsible
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1-19
Economic Systems
Economic System
●
A description of how a particular society distributes its resources to produce goods
and services
Communism
●
First described by Karl Marx as a society in which the people,
without regard to class, own all the nation’s resources
●
On paper it appears efficient, but in practice, these
economies suffer from:
Communism ●
low standards of living
●
critical shortages of consumer goods
●
high prices
●
corruption and little freedom
C
C
H
U
I
B
N
A
A
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1-21
Socialism
Sociali
●
An economic system in which the government owns and
operates basic industries but individuals own most
businesses
●
Most socialist countries are democratic and recognize
individual freedoms
S I I
W S N
E R D
D A I
E E A
N L
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1-22
Capitalism
Capitalism ●
An economic system in which individuals own and operate the
majority of businesses that provide goods and services
Pure capitalism or free-market system happens when all
, or Free
●
C J
A U A
N S P
A A A
D N
A
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1-23
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1-24
Mixed Economies
No country practices pure capitalism, socialism, or
communism
Mixed ●
Economies made up of elements from
more than one economic system
Economi ●
No country practices a pure form of any
economic system, although most favor
es one system over others
Modified Capitalism
► Modified capitalism differs from pure capitalism in that
the government intervenes and regulates business to
some extent
► One way of regulating
business is through laws
► Federal Trade
Commission Act created
the Federal Trade
Commission
► Importance of
government’s role in
Enforces antitrust laws and
monitors businesses to ensure economy
fair competition
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1-26
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1-28
The number of
products consumers
are willing to buy at
Supply different prices at a
specific time
The number of
products businesses Demand
are willing to sell at
different prices at a
specific time
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1-29
Equilibrium Price
Equilibrium
price is the
price at which
the number of
products that
businesses are
willing to
supply equals
the amount of
products that
consumers are
willing to buy at
a specific point
in time
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1-30
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1-31
Marriott International
Pure Monopolistic
Competition Competition Oligopoly Monopoly
●
The market ●
Fewer ●
The market
●
The market
structure that businesses than structure that structure that
exists when in a pure exists when
exists when
there are many competition and there is only one
there are very
small businesses the differences business
selling one among the few businesses providing a
standardized goods they sell selling a product in a
product are small product given market
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1-33
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1-34
Hyperinflation
Inflation can be harmful if individuals’ incomes do not
increase at the same pace as rising prices, reducing
their buying power
The worst case of hyperinflation occurred in Hungary
in 1946
At one point, prices were doubling every 15.6 hours
One of the most recent cases of hyperinflation
occurred in Zimbabwe
Suffered from hyperinflation so severe that its inflation
percentage rate rose into the hundreds of million
The elimination of the Zimbabwean dollar and certain price
controls, the inflation rate began to decrease
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1-36
●
The sum of all goods and services
Gross Domestic produced in a country during a year
Product (GDP)
●
Does not include profits from
companies’ overseas operations
●
The condition in which a nation spends more
than it takes in from taxes
Budget Deficit ●
U.S. budget deficit has recently grown to
record levels; remedies include raising taxes or
reduce spending
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1-37
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1-40
Entrepreneur
• An individual who risks his/her wealth, time and effort
to develop for profit an innovative product or way of
doing something.
Entrepreneurship requires:
Risk
Innovation
Creativity
Reward
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1-42
Business ethics
are standards set
by society
Stakeholders Reputation
demand ethical depends on profit
and socially and ethics and
responsible social
behavior responsibility
©
© 2016
2016 by
by McGraw-Hill
McGraw-Hill Education.
Education. This
This is
is proprietary
proprietary material
material solely
solely for
for authorized
authorized instructor
instructor use.
use. Not
Not authorized
authorized for
for sale
sale or
or distribution
distribution in
in any
any manner.
manner. This
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1-44
Absolutely!
To be successful in business, you
need:
Knowledge
Skills
Experiences and
Good judgment
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1-45
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1-46
Discussion
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