chapter 1 Flashcards
success in business is based on
- Filling a gap in the market
- Finding what customers need and want
- solving a consumer problem
- constantly adapting to changes in the market
types of needs
- social
- physical
- individual
what are wants
they are shaped by one’s society and described as objects that will satisfy needs
what are demands
wants that are backed up by buying power
what is a business?
any activity that provides goods and services while generating profit
what are goods
tangible products
what are services
intangible products
important
Purpose of a business
underlying reason for it’s existence
important
the function of a business
activities and operations a business performs to fulfill it’s purpose and achieve it’s goals
what is revenue
total amount of money a business takes in during a given period by selling goods and services
what is profit
the amount of money a business earns above and beyond what is spent on expenses
what is a loss?
when a business’ expenses are higher than revenue
what is an entrepreneur?
a person who risks time and money to start and manage a business
example of an entrepreneur, what does he believe in
bill gates, unhappy customers are his greatest asset and greatest source of learning
key characteristics of an entrepreneur
1.passionate
2.determined
3.resourceful
4.risk taker
advantages of becoming an entrepreneur
- create your own destiny
- become financially stable
- become recognized
disadvantages of becoming an entrepreneur
- uncertainty of income
- risk of losing all invested capital
- long hours of work
important
define competitive advantage
unique strengths that differentiate a business from it’s competitors and help them outperform them
important
competitive advantage is based on
- cost leadership
2.product differentiation - Superior customer service
4.advanced technology
important
what is a value proposition
statement or purpose that communicates the unique values and benefits of a product or service
important
importance of a value proposition
- capture customer attention
- defines why customers should choose a particular product over alternatives in the market
important
difference between a value proposition and a competitive advantage
- value proposition is more specific and customer-oriented, while competitive advantage is more broader and includes all the factors that make a business more competitive
- The value proposition focuses on the unique values and benefits of a product or service, while competitive advantage focuses on internal resources such as market positioning, strategies, and capabilities
define the standard of living
the amount of goods and services people can buy with the money they have
define the quality of life
general well-being of a society in terms of political freedom, education, and healthcare, which adds to the joy that other goods and services provide
define stakeholder
all the people who stand to gain or lose from business activity
examples of internal stakeholders
- stockholders
2.employees - board members
examples of external stakeholders
- suppliers
- customers
- general public
- government
what is a non-profit organization?
an organization whose goals aren’t generating profit, they use financial gains to meet social or educational goals, they usually rely on donations
what is outsourcing
an agreement in which one company hires another company to be responsible for an internal activity
what are the 5 factors of production?
- land
- labor
- capital
- enterprise
- knowledge
what is land
natural resources
what is labor
workers
what is capital
finance and machinery
what is enterprise
risk-taking ability
what is knowledge
determining wants and needs, respond with desired goods and services
how technology benefits workers
- effectiveness
- efficiency
3.productivity - e-commerce
define effectiveness
producing the desired results
define efficiency
producing goods and services using the least amount of resources
define productivity
amount of output you generate, given the amount of input
define e-commerce
buying and selling goods over the internet
important
how to compete by exceeding customer expectations
companies must listen to customers, and adjust their products to meet demand
important
how to compete by restructuring and empowerment
giving frontline workers the authority and training to respond quickly to customers
important
what is sustainability
actions through which humankind avoid the depletion of natural resources, and try to keep an ecological balance
important
example of sustainability
a japanese company produced pencils that end with a seed
important
example of value proposition
McDonald’s value proposition includes convenience, affordability, and fast service
