Ch1- Intro Flashcards
What is Business?
Producer provides goods and services in hope of earning a profit
What is profit?
Difference between revenue and cost, the revenue is greater than the cost
What is loss?
When the revenue isn’t greater that the cost
What is an entrepreneur?
A person who takes risks to manage their business
What is standard of living?
The quality of life people have.
When and what is Mercantilism+Trade?
1500
Based on trade between colonies and their mother country. The mother country takes resources from the colonies to make products then resell the product to the colonies
When and what is Industrial Revolution?
1700/1800
Replacing artisans with factories and mass production, the cost per unit decreases as well as the quality of life
When and what is entrepreneurship era?
Mid 1800
Large scale business enterprise, the first millionaires and larger businesses scales
When and what is production era?
1900
Efficiency and specialization in factories
Henry Ford and the assembly line.
Science is associated with business(scientific management )
When and what is marketing era?
After WWII
Choice in the products you can buy (a lot of brands) + competition
Companies needs to find ways for their companies to buy their products (advertisement)
When and what is relationship era?
Today
Long term relationship with the customer, it’s cheaper to keep a customer than acquire a new one
What is a Profit business
Primary goals is to increase profit.
Based on increasing revenues and decreasing expenses.
What is a non profit business?
The primary goal is not profit.
It functions the same was as a business (meet their goals in an efficient way)
Generally provides social or education services to the general public.
What are the four factors of production?
Natural resources
Human Resources
Capital
Entrepreneurship
What are Natural resources?
Anything that comes from nature, in their natural state
Ex:river
What are Human Resources?
Labour + skill to create goods and services
Ex:teacher
What is capital?
Tools and equipment used to create goods and services
Ex:computer
What is entrepreneurship?
Risk to create/start something new
Ex: first to use…
What is the general goal of PESTLE?
Hello analyze the business environment, anything that is outside the control of the business
What is the PESTLE composed of?
Political/ legal Economic Socio-cultural Technological Environmental
What are some elements of Political/legal element of PESTLE?
Political party that got elected,
Taxes/laws
Political instability
Elements of the economic of PESTLE?
The state of the economy (grow and contraction phase)
Debt
Inflation
Elements of socio-cultural of PESTLE?
Taste and preferences
Diversity
Aging population
Ethic+values
Elements of technological of PESTLE?
Internet+e-commerce
It allows businesses to try and do new things
Elements of environmental PESTLE?
Current environment and availability of resources
How do you build long-term real action ships with customers?
Loyalty program, membership cards, login, subscription
Customer satisfaction
How happy they are with the product and the price
+experience, mood, time spent
What is workforce advantage?
Leads to better results and quality thus more profit
What is competitive advantage?
What sets you apart from the competition
Ex: a product that is hard to copy
What are the porter’s 5 forces?
Industry competition Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Threat of substitution
What is industry competition of P5?
How strong and how many competitors are in the market
What is threat of new entrants of P5?
Likely hood and hoe easy it is to enter a market
How easy it is to get the customers
What is bargaining power of P5?
The customer can drive the price lower
We don’t buy those products on a daily basis, they are expensive and there is a number of choice of the provider
What is and what causes the bargaining power of suppliers in P5?
Supplier can drive the cost of raw materials or part higher
Caused by scarcity of resource and low competition for the supplier
What is the threat of substitution of the P5?
The more substitutes a product in its category has the worse it is for your business
What is globalization?
Integration and interdependence of countries in terms of resources, consumers and competition.
Why can competition be a good thing for customers and companies?
For customers: drives price down
For companies: motivation to get better as a business
/growth
What is free trades?
Economic and political movement used to help goods and services flow freely between countries
What can be used to protect local market from free trades?
Tariffs (taxes fro buying a foreign product)
Quotas (how much can be bought in a market)
What is Gatt
General agreement on tariffs and trades.
The international community comes together to prevent war and trading crisis
