Midterm Flashcards
What are the factors of production?
Basic resources, Labour, Capital, natural resources, information, information, entrepreneur
What is a Command economy?
Government controls most or all of the resources and decides their allocation and what goods to produce
What is a Market economy?
Business and consumers make decisions through supply and demand
What is a Mixed Market economy?
Most countries are this. An economy that mixes command and market economies.
What interactions does the government have with businesses?
Taxation, regulations, service provider, incentive/assistant provider, customer and competitor
What are the degrees of competition?
Perfect competition, monopolistic competition, Oligopoly, Monopoly
What is an external environment?
Factor beyond an organizations boundaries that can not be controlled, eg competition, regulation etc
What is an organizational boundary?
That which seperates th eorganization from the environment
What are the 7 dimensions of the external environment?
Technological environment, Economic environment, Political-legal, Global, Socio-cultural, Business and emerging challenges and opportunities environments
What are the key economic goals?
Economic growth, stability and full employment
What are the 4 phases of a business cycle?
Peak, recessions, trough and recovery
What are 3 factors that affect economic stability?
inflation, deflation and unemployment
What are the 4 types of unemployment?
Frictional, Seasonal, Cyclical and structural.
Technological environemnt is what?
The ways that a company creates value for it’s customers, ie knowledge, work methods, physical equipment etc
What are the 2 types of R&D?
Basic R&D: research that does not yet have an immediate market eg duct tape
Applied R&D: How a new idea can be put to use in a product or market eg Apple pay
What is the political-legal environment?
reflects the relationship between business and government eg regulations and taxes. A governmetn can have either a pro- or anti business sentiment. Political-legal environment includes political stability and international relations
What is the Socio-Cultural environment?
Customs, values, attitudes and demographic characteristics of the society in which the organization functions. Includes customer preferences and tastes that vary across abnd within national boundaries that may change over time. Includes ethics and responsibilities of business owners and the business environment.
Business environment
Essentially porters 5 forces model - Threat of new entrants, Bargaining power of suppliers, Threat of substitutes and bargaining power of consumers all of which affect the industry rivalry
What is industry rivalry?
The number of close competitors in the industry. This includes the size and market share of said competitors. Includes industry structure (monopoly, oligopoly etc), industry growth rate, advertising spent and whether or not their is price wars (among other, smaller, things)
What is threat of new entrants?
How easy it is for a new business to enter the industry. eg How loyal are the customers in a market, how easy is it for customers to switch to another product, industry regulations, capital requirements, ease of access to distribution/sales channels and how easy it is to train new employees
Threat of substitutes?
Are there goods and services that perform a similar function? eg How many close substitute products are there? How expensive are they? What is the quality of the substitutes? etc
What is the bargaining power of supplier?
How strong are the suppliers? How much influence do they have? eg How many suppliers can you use? How many other customers or industries does your supplier serve? Does the business have a high switching cost between suppliers?
Bargaining Power of consumers?
How many buyers do you have? How much sales do they acount for? Can your buyers easily switch to a competitive offering? Are the buyers able to enter your business themselves? Are buyers only purchasing from you or other firms as well?
What are the emerging challenges and opportunities in the business environment?
Most succesful firms are getting leaner by focusing on their core competencies (the skills and resources with which an organization competes best and creates the most value for owners) by outsourcing non-core processes