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: can be: (goods or services)
- geographical reach (local, regional, international)
- company size: big or small scale
- ownership:
- solo praetorships: one owner
- partnerships: several owners
- corporations: thousands of owners
relationship between risks, rewards and moral hazard
- companies need to make risks with a reward
- if if 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
Define buisness mindset
inside view of buisness with appreciation of the decisions to be made and challengers that managers face.
positive effects of the role of business in society
- offers valuable goods/services
- provides employment
- national growth/stability/ security
negative effects of the role of business in society
- pollution and waste
- health +safety risks
- disrupts communities
- financial isntability
define the social environment
trends and forces in society at large
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 (eg AI)
- market environment: (1) target customers, (2 )buying influences and (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
