chapter 1 Flashcards
define business
profit-seeking organization that provides goods/services to satisfy customers needs.
Describe the concept of adding value to a business
- transforms lower value inputs to high value outputs, making them more attractive for buyers to purchase.
define revenue
- amount of money company brings by goods + services
define business model
model that describes how a company will make revenue
define profit
revenue-costs
define competitive advantage
appeals more to target audience, more likely to purchase from your business.
4 ways to categorize a business
- product type (goods and services)
- geographical reach (local, regional, international)
- company size: big or small scale
- ownership:
- solo praetorships
- partnerships
- corporations
relationship between risks, rewards and moral hazard
- companies need to make risks with a reward
- if ig goes well company benefits, if not they suffer the consequence.
However, when this relationship is broken ( risk gets disconnected)–> moral hazard as someone else suffers consequences
advantages of the role of business in society
- offers valuable goods/services
- provides employment
- national growth/stability/ security
disadvantages of the role of business in society
- pollution and waste
- health +safety risks
- disrupts communities
- financial isntability
Discuss the 5 major environments in which a business operates
- economic environment–> the conditions that affect the cost and availability of goods and services
- social environment: trends affecting society
- technological: ability to create/ destroy markets
- market environment: (1) target customers, (2)buying influencing customer behaviour (3) competitors
- legal and regulatory environment: laws and regulations affecting business
define gig economy
portion of economy of people working as independent contractors in short-term projects
define barriers of entry
resources/skills company has before entering market
The 6 functional areas in business
- R&D
- Manufactuing, production operations
- marketing, sales, distribution and customer service.
- finance and accounting
- Human resources
Business services
The seven most important business careers
- operations manager
- human resource specialist
- IT manager
- marketing specialist
- sales professional
- accountant
- financial manager
