Chapter 1 The Environment of Business
Chapter 1 The Environment of Business
Key contents ■ Business Business environment Political legal ■ Economic Technological a Social / cultural ■ International
Key Contents ◼ Business ◼ Business Environment ◼ Political / legal ◼ Economic ◼ Technological ◼ Social / cultural ◼ International
Business The organization: A group of people, with common purpose Providing goods and services to satisfy customer requirements in order to maximize profit An enterprise, commercial entity, or firm in either the private or the public sector, concerned with providing products or services to satisfy customer requirements. ■ The process: a The organized effort of individuals to produce and sell, for profit, the products and services that satisfy societv's needs
Business ◼ The organization: ◼ A group of people, with common purpose ◼ Providing goods and services ◼ to satisfy customer requirements ◼ in order to maximize profit ◼ An enterprise, commercial entity, or firm in either the private or the public sector, concerned with providing products or services to satisfy customer requirements. ◼ The process: ◼ The organized effort of individuals to produce and sell, for profit, the products and services that satisfy society’s needs
The Organized Effort of Individuals 3-Satisfying Customer Needs 2-Providing Goods and Services 1-Combining Resources Human Informational resources resources BUSINESS Materia Financial resources resources
The Organized Effort of Individuals 1-Combining Resources 2-Providing Goods and Services 3-Satisfying Customer Needs
Satisfying Needs a People buy goods and services not just to own them, but to satisfy particular needs a Businesses that understand customer needs, and work to satisfy those needs, are usually successful
Satisfying Needs ◼ People buy goods and services not just to own them, but to satisfy particular needs ◼ Businesses that understand customer needs, and work to satisfy those needs, are usually successful
Business The goal: Satisfying customer needs a The means: Providing goods and services Process: production(operations) manufacture, process, assemble, create, Factors of production(Inputs: Resources (N, L,K,E) Land and natural resources Lab Capital Entrepreneurship A person who risks time, effort, and money to start and operate a business Outputs: Goods and services(marketing logistics) ■ sales, promotion, distribution, services,…
Business ◼ The goal: Satisfying customer needs ◼ The means: Providing goods and services ◼ Process: production (operations) ◼ manufacture, process, assemble, create, …… ◼ Factors of production (Inputs: Resources ) (N, L, K, E) ◼ Land and Natural resources ◼ Labor ◼ Capital ◼ Entrepreneurship ◼ A person who risks time, effort, and money to start and operate a business ◼ Outputs: Goods and services (marketing & logistics) ◼ sales, promotion, distribution, services, …
Business profit a The purposes of profit To reward business owners for producing goods and services consumers want As payment for business owners assuming the risks of ownership ■ Stakeholders All of the different people or groups or people who are affected by the policies and decisions made by an organization
Business Profit ◼ The purposes of profit ◼ To reward business owners for producing goods and services consumers want ◼ As payment for business owners assuming the risks of ownership ◼ Stakeholders ◼ All of the different people or groups or people who are affected by the policies and decisions made by an organization
The Relationship between Sales Revenue and profit Profit is what remains after all business expenses have been deducted from sales revenue. A loss(negative profit) results when a firm's expenses are greater than its revenues Sales revenue Expenses Profit
The Relationship Between Sales Revenue and Profit ◼ Profit is what remains after all business expenses have been deducted from sales revenue. A loss (negative profit) results when a firm’s expenses are greater than its revenues
The goal Maximize Profit by satisfying customer requirement Profit: revenues costs Revenues: sales volume x price ■ Costs: a costs of goods sold(COGS); Inputs: Resources ( L, K, N, e)(logistics) Purchase/procurement/sourcing, transportation, warehousing, handling, Expenses a selling, general, administrative, depreciations
The Goal ◼ Maximize Profit by satisfying customer requirement ◼ Profit: revenues – costs ◼ Revenues: sales volume x price ◼ Costs: ◼ costs of goods sold (COGS); ◼ Inputs: Resources (L, K, N, E) (logistics) ◼ Purchase/procurement/sourcing, transportation, warehousing, handling, …… ◼ Expenses: ◼ selling, general, administrative, depreciations, …
Business activities a purchase, sale, lease, and rental of personal or real property Manufacturing, processing, and/or marketing of products, commodities, or any other personal property a sale of services to the public, > the activities of providing goods and services
Business: activities ◼ purchase, sale , lease, and rental of personal or real property; ◼ Manufacturing, processing, and/or marketing of products, commodities, or any other personal property; ◼ sale of services to the public; ➔the activities of providing goods and services