#2.2 : Responding to Opportunities in Business Flashcards
Difference of microeconomic and macroeconomic environment
The microeconomic environment studies individuals and business decisions, such as market structures, customers, suppliers, and competitors. The macroeconomic environment on the other hand includes the gross national product (GNP) and real income growth, income distributions, etc.
An increase in income, adjusting for inflation. It determines the real status of an economy.
Real income growth
It is how income is distributed among different income groups. It determines if income is more or less distributed equally, or is being concentrated in the upper-income class.
Income distribution
It refers to how income is used and what consumers are buying.
Expenditure Patterns (and trends)
It is where the funds are used by the borrower, whether for investment purposes or some other use.
Borrowing patterns
It refers to licenses and taxes.
Government legal restrictions
It refers to how much one spends on daily sustenance, which also depends on how productive one is, based on an individual’s output.
Cost of living
It refers to how much one spends on daily sustenance, which also depends on how productive one is, based on an individual’s output.
Cost of living
It refers to what lenders charge a borrower for the use of their money, typically expressed as a percentage of the amount borrowed.
Interest rates
It is what is left of one’s income after deducting taxes.
Disposable income
Why is it important to take note of the following criteria for practical and realistic business opportunities?
Knowing these will be a good start to a successful business.
4 Entrepreneur’s checklist
- There must be a market for the product or service.
- Accessible location is necessary to reduce operating costs.
- Minimizing fixed and variable costs is a must.
- Compliance with legal requirements is a must.
How can a product have a market?
If the product is something that people will actually buy.
What is the common think why businesses use famous personalities to endorse their product?
The nature of the people is to imitate what they see to others, that’s why businesses use famous personalities to advertise their product.
Why is the location of the business must be accessible?
To reduce the operating cost, and for the target market and the suppliers to easily access the location.
How can you minimize the fixed and variable costs?
Avoid overusing the electricity when there is no customer, lay off positions that are redundant, and find suppliers that matches the price you offer.
Why is there a need to comply with legal requirements?
For the protection of the business and customers.
It is used to analyze an organization or process to evaluate internal and external factors which may prove favorable or unfavorable in achieving its objectives.
SWOT Analysis
It gives an organization or business an advantage over others.
Strengths
These are negative attributes of an organization or business.
Weaknesses
These are external possibilities where an organization or business can venture into or take advantage of.
Opportunities
These are negative external factors in an organization or business.
Threats
What is point-of-view in SWOT Analysis?
They are the decision-maker of the analysis.
What is the time context in SWOT Analysis?
It is when the case/dilemma happened.
What is the Statement of the Problem in SWOT Analysis?
It is the dilemma/present setback of the firm.
What is the Statement of the Objective in SWOT Analysis?
A statement that answers the problem (assumption).
What is the Areas of Considerations in SWOT Analysis?
Suggestions/courses of action to take.
What is the Conclusion in SWOT Analysis?
A criteria that identify what decision to make.
