Business II Flashcards
How are businesses successful ?
They are knowledgeable about their customers and their competitors
How do business gain knowledge?
By conducting market research: the act of exploring what customers want and whether they will support a product
Why do some businesses in ag dont succeed?
Due to inherent risk in this sector
- unpredictable weather
- long production cycles
- unsafe food practices incidences
- pest outbreaks
- seasonality of food availability
Why is market research conducted?
To analyze the buying habits of the population and use that information to guide successful business decisions
What are the 3 specific goals of market research?
Market needs
Political correctness
Costs of production
In market research, what does political correctness entail?
Marketers need to account for double entendres, misreading, misspellings, language translations, and offensive language
-can affect sales of great product
What is cost of production?
Market research can also help estimate the cost of production and how much the business can charge for their product.
When looking at cost of production, what are the 2 things owners are looking at?
Fixed costs:
- Equipment
- Real estate
Operating costs:
- Insurance
- Feed
- Fuel
- Chemicals
- Repairs
- Labour
*based on these they set their price
What are new businesses responsible for understanding?
Relevant policies, and existing businesses stay current with all changes that affect them.
By conducting policy research, these businesses can make informed decisions
What happens if a business has already done something you’d like to get into, what can you learn from this?
New and existing businesses can research guides to learn what is involved in the production of their product
-learning best practices can save a business time, money, and frustration.
What do laws and regulations across all sectors encompass?
Safety Training Labour Taxes Liability Environment
What do business have the option to join?
To become a member of organizations that share their interests
-organizations help keep them up to date with changes that affect the business and advocate for the sector’s well-being through government and public relations.
Why would a business become certified?
to help set them apart from their competition
What is a risk?
the chance that business will lose income, so risk is inevitable in the agriculture and food supply chain.
What are the 4 main risks that farmers can experience?
Weather
Price
Health
Biological
Why is weather a risk to ag?
producing plants and animals throughout challenging weather, so agriculture business can lose income.
The risk of long production cycles is that agriculture is exposed to plenty of unpredictable weather over a long time
Why is price a risk in ag?
-Long production cycles leave agriculture vulnerable to changes in market needs
Why is health a risk in ag?
product that causes illness or death damages their reputation and causes tragedy
What are the biological risks in ag?
- Pests: unknown numbers/species every year
- Perishability: short time when product is fresh and available
What is the goal of risk management?
to avoid adverse events or at least lessen the consequences
What are practices and strategies for risk management?
Risk reducing tech
Food safety programs
Diversificaiton
What are risk reducing techs for risk management?
Technologies can avoid the consequences of specific risks
What are food safety programs for risk management?
Enforcing biosecurity plans
-describe actions that reduce the risk of spreading disease from people, animals, pests and vehicles on the farm using sanitation and segregation practices, and maintenance
Hazard Analysis Critical Control Points (HACCP)
What diversification for risk management?
the practice of varying the products and services to manage risk
-spreads the risk, so a business is not risking everything on the success of one project
What kind of insurance and loans could help with risk management?
Production insurance: cover business losses that are caused by insured hazards
-Each sector has access to different types and levels of coverage to meet their needs
Operating loans: Monetary loans are sums of money borrowed by businesses that must be paid back with interest
-helps pay for expenses in the short term to improve their business in the long term
What are government services to help with risk management?
Extension and research: advise businesses on risk management, based on the best available evidence
-this results in technology generation and productivity improvement.
Disaster relief: government provides recovery assistance when there are extraordinary costs caused by disasters
Ion developing countries, what practices and strategies can they use for risk management?
Farm records
-gathers info about local environment and the outcome of their decision. can be used for future decisions
Diversification
-Increase variety to depend on more than one market and season
Risk reducing tech
-better storage can reduce food waste and improve income
