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Business > Midterm - Ch 1,3,4,5, E-scan, Alison’s Coffee Shop > Flashcards

Midterm - Ch 1,3,4,5, E-scan, Alison’s Coffee Shop Flashcards

1
Q

Business

A

An organization that seeks profit by offering products (goods and services) to satisfy society’s needs (organization, company)

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2
Q

Good

A

A physical, tangible product that we can see and touch

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3
Q

Service

A

An intangible product that we experience or use

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4
Q

Why study Business

A
  • helps you choose a career. You can evaluate different industries, different sizes, and different employers and possibilities for starting your own business.
  • it can improve your career. Improve management skills (interpersonal, analytical, technical, and conceptual). Practices that make you more valuable to an organization.
  • helps you become a better-informed consumer and investor
  • helps you become a more influential community member. Learn of business that align with your values.
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5
Q

For a business to be successful?

A

Material - include raw materials used in manufacturing, buildings, and machinery.

Human - are people who provide labour businesses for wages.

Financial - the money required to pay employees, purchase, and keep it operating.

Informational - Tells how effectively the other 3 resources are being combined and used.

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6
Q

Business Impact Concerns

A

Health and safety risks - working in a production varmint, the use of potentially unsafe materials in manufacturing and unsafe product designs.

Environmental Damage - When companies do not focus on making resources sustainable, it can cause irreversible damage to the air in the land. Causing negative impacts on the health of citizens in the community.

Social Disruption - when a company is successful it can damage already existing businesses and cause changes in communities in unwanted ways. Some employees don’t benefit from its success due to low pay and limited benefits. Businesses failing can throw thousands of people out of work, bringing hardships to communities.

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7
Q

5 factors of business environment: that affect its success or failure

A

Economic factors - economic slowdowns or upturns that affect everything.

  • during downturn Employment rate increases, in uptown it decreases
  • downturn means spending decreases for discretionary items, in upturn it increases.
  • downturn means government receives less tax revenue, which impacts its spending or debt levels.

Competitive Factors - Business owners must figure out what makes their business successful high level of competition forces companies to focus on strategies such as cost cutting, development of new products, and/or increased marketing and branding efforts.

Global Factors - Businesses not only compete with local or national businesses but with businesses across the world.

Technology Factors - innovations in tech has changed how companies produce and distribute products. It allows companies to interact with millions of people easily, making marketing easier.

Social Factors - Changes in the demographics of our population (age, gender, ethnicity) Will influence what products companies offer and how they operate their business

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8
Q

Capitalism

A

An economic system in which individuals own and operate the majority of businesses that provide goods and services

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9
Q

Free market economy

A

Economic system in which businesses and individuals decide what to produce and buy in the market determines prices and quantities sold

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10
Q

Socialism

A

Economic system in which the key industries are owned and controlled by government

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11
Q

Communism

A

Economic system where all property and profits are owned by government, which then decides what goods and services will be produced.

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12
Q

Perfect competition

A

The market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product.

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13
Q

Equilibrium price

A

The price at which the quantity demanded is exactly equal to the quantity supplied.

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14
Q

Monopolistic competition

A

A market situation in which there are many buyers along a relatively large number of sellers that differentiate their products from Competitor’s products

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15
Q

Oligopoly

A

The market or industry in which there are few sellers

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16
Q

Monopoly

A

A market or industry with only one seller and barriers to keep other companies from entering the industry

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17
Q

Expansion

A

Economy grows

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18
Q

Contraction

A

Economy shrinks

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19
Q

Recession

A

Economy shrinks 2 quarters in a row

- People lose jobs, overall drop in household income

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20
Q

Depression

A 
Severe recession (last longer than normal)
- Larger decline in business activity compared to regular recession
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21
Q

Trough

A

When a country’s economy bottoms out. A country’s production and employment reach low points.

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22
Q

Gross domestic product

A

The total value of all goods and services produced by all people within the boundaries of a country during a one year.

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23
Q

Unemployment rate

A

The percentage of a country’s labour force unemployed at any time; calculated as the number of unemployed divided by the number of people currently in labour force.

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24
Q

Consumer price index

A

A monthly index that measures the changes in the prices of fixed baskets goods purchased by a typical consumer in an urban area

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25
Q

Deflation

A

And economics statistic that tracks like the decrease in prices of goods and services over a period of time

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26
Q

Benefits of a business to society

A

Offering valuable goods and services.

Providing employment.

Improving quality of life.

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27
Q

4 phases of the Business cycle

A

Peak, contraction or recession, trough, expansion

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28
Q

How is equilibrium price determined

A

It is determined by the intersection of the demand and supply curves.

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29
Q

Entrepreneur

A

Person who organizes and operates a business, taking on greater than normal financial risks in order to do so.

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30
Q

Intrapreneur

A

Boys who bring an entrepreneurial spirit to the organizations

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31
Q

Entrepreneurial spirit

A

Being aware of an entrepreneurial activity, perceiving there are good opportunities

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32
Q

Qualities of entrepreneur

A

Confidence- ability to act decisively and leave the business

Energy- putting in long hours

Internal drive- desire to control on destiny, believe they can control destiny.

Vision- think for strategically and creatively. Effectively manage the details required to make their vision a reality.

Willingness to endure risk- success is not guaranteed. Those who are comfortable in failure are more likely to persevere and learn from their mistakes.

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33
Q

Advantages of a small business

A
  • personal relationships with customers and employees
  • ability to adapt quickly to change
  • simplified record keeping
  • independence
  • ease and low cost of going in to a business
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34
Q

Disadvantages of a small business

A
  • high risk of failure
  • limited potential
  • limited ability to raise capital and hire qualified talent
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35
Q

Why people start small businesses

A
  1. Culture of entrepreneurship. Idea is respected and supported. People celebrate and promote small businesses.
  2. Advances in technology. Technology is available to almost everyone. It’s easily accessible.
  3. Downsizing outsourcing. Downsize employees may realize they have the entrepreneurial spirit. Companies outsource they create opportunities for new and specialized companies to serve them
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36
Q

Small businesses advancing the Canadian economy

A
  • Provide technical innovation. Produce more innovative technology/product than large companies
  • provide employment. 8.2 million of private sector employees work for small businesses.
  • provide competition. They challenge larger businesses to become more efficient and responsive to customer needs.
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37
Q

What is a Business plan?

A

A written document that describes the opportunity, goals and plans for a business. It is a carefully constructed guide for the person starting a business.

Communication tool. Potential investors decide if they want to invest or assist. Shows whether a business has potential to make profit.

A management tool. Helps track, monitor and evaluate progress. Allows comparison of growth projections against accomplishments.

A planning tool. Guides through the various phases of business. Plans help identify and avoid obstacles and establish alternatives.

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38
Q

4 essential questions a business plan should answer

A
  1. Executive summary. Overview of key aspects of the business plan. Include justification for why it will succeed.
  2. Product description And market analysis. Why is it unique? What problems it’s always in the market. Who is likely to buy it? Initial evidence of market demand.
  3. Marketing plan. Strategy for pricing, distributing and promoting the product.
  4. Operations plan. Description of how the product will be produced and delivered. Management team, personal needs, facility requirements, launch schedule.
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39
Q

What is a business model? key components.

A

It business model explains how the business will make money. Value proposition, customer segments, (sales, marketing, and distribution channels), customer relationships, revenue stream, key activities, key resources, key partnerships, cost structure.

40
Q

Angel investors

A

Private individuals who invest money in exchange for ownership in a company

41
Q

Venture capital

A

Companies that invest money in high growth companies that have the potential to become large and successful

42
Q

Franchise

A

Is a license to operate an individually owned business as if it were part of a chain of outlets or stores

43
Q

Franchising

A

Is the actual grant of a franchise

44
Q

Franchisor

A

Is an individual or organization granting a franchise

45
Q

Franchisee

A

Is a person or organization purchasing a franchise

46
Q

Sole proprietorship

A

A Business that is owned and usually operated by one person. What are the easiest forms to start up

47
Q

Advantages of sole proprietorship

A
  • Easy and inexpensive to form
  • is to dissolve
  • Pride of ownership
  • flexibility of being your own boss and having control over decisions
  • retention of all profits
  • relative freedom from government regulation
  • no special taxes on the business (treated as personal income)
48
Q

Disadvantages of sole proprietorships

A
  • unlimited liability - personal responsibility for the debts of the business
  • responsibility for all losses
  • lack of continuity if something happens to the sole proprietor
  • Difficulty obtaining Capital from investors or banks (backed by sole proprietor assets only)
  • Limited management skills and expertise
  • Large time commitment for one owner
  • difficulty attracting high qualified employees
49
Q

Partnership

A

And association or relationship between two or more individuals who join together to carry on a trade or business

50
Q

Advantages of a partnership

A
  • Easy to form
  • greater availability of capital in credit due to the increased financial strength of more owners. The more amount I am available to spend the credit limit is higher.
  • combined business skills and knowledge
  • spread the workload between owners
  • relative freedom from government regulation
  • no special taxes on the business. Business income is treated as personal income of partners
51
Q

Disadvantages of a partnership

A
  • unlimited liability
  • General partners have joint and several liability, meaning they can be held responsible for all partnership’s debts
  • management disagreements over how to run a business
  • frozen investments. Difficulty getting money out of the business or exiting the partnership
52
Q

Limited liability partnerships

A

Each partner is protected from responsibility for the acts of the other partners

53
Q

Corporations

A

An artificial person created by law with most of the legal rights of a real person, including: the rights to start and operate A business, to buy or sell property, to borrow money, to sue and be sued, enter into binding contract.

54
Q

Advantages of a corporation

A
  • Limited liability. A corporation is a legal entity separate from its owners who therefore are responsible for his debts
  • availability of capital and credit. Raise funds by selling equity/ownership to shares and it generally has a greater access to bank funding.
  • ease of transferring ownership
  • perpetual life. The death of an owner does not affect our business is existence.
  • Ability to attract highly qualified management
55
Q

Disadvantages of a corporation

A
  • Difficulty and expense of formation
  • government regulation and reporting requirements
  • double taxation. Pay federal and provincial income on his profits, then the after-tax profit that is distributed to shareholders is taxed again as investment income.
  • Lack of secrecy. Public corporations are required to file annual reports
56
Q

Public corporation

A

A corporation who shares are widely held and available to the general public

57
Q

Private corporation

A

A corporation whose number of shareholders is limited; normally restricts the transfer of shares to third parties, and shares do not trade on recognized stock exchange

58
Q

General partner

A

A person who shares responsibility for operating a business, and unlimited liability for the debts of the business

59
Q

Limited partner

A

A person who invest money in a business but has no management responsibility or liability for losses beyond the amount they have invested in the partnership

60
Q

Key considerations for ownership structure

A
  1. Business control of transfer of ownership
  2. Taxation and division of profits
  3. Legal and financial liability
  4. Ease of start up and administration
61
Q

Business control of transfer of ownership

A

Sole proprietor ships/oneperson corporations offer the most control that make transfership very difficult. Partnerships and corporations require shared control of business because multiple owners. Corporations allow easy to transfer ownership (Best for businesses intending to attract investment capital by selling shares)

62
Q

Taxation and division of profits

A

After taxes, the profits are in by the sole proprietor and partnerships our taxes personal income of the owner. Partnerships can divide profit by any method agreed by owners. Because a corporation is a legal entity, it must pay taxes on company profits at a corporate rate. Meaning double taxation because after tax profits may be distributed to company owners and that money gets taxed again as dividend income.

63
Q

Legal and financial liability

A

Soul proprietors and general partnerships can expose business owners to unlimited personal liability for a company that’s in legal judgments. Limited liability partnership’s and corporations provide liability protection. Advantages of corporations are obtained when the business grows and are not evident when the business is just starting.

64
Q

Ease of start up and administration

A

The basic start up and administration requirements for the soul proprietor ship and partnership are simple and inexpensive. Corporations are complicated and expensive. They have more started requirements, have a distinct government structure, and are the only form of ownership that requires an annual shareholders meeting.

65
Q

Pass-through taxation

A

Occurs when an owner share of business profit is reported on his or her individual tax returns, as in unincorporated business (sole p. Or a partnership)

66
Q

Corporate taxation

A

Occurs when profits of a business are taxed at the entity level before profits are distributed to honors; distributions are reported on the owner’s individual tax returns as dividends and a text a second time.

67
Q

Limited liability

A

A feature that limits each owners financial liability to the amount of money they invested

68
Q

Unlimited liability

A

A legal concept that holds a business owner personally responsible for all the debts of the business

69
Q

Sole proprietorship; ease of ownership structure

A

Simplest and easiest to form. Register business name and obtain a business license or permit.

70
Q

Partnership

A

Easy to form. Register a business name and obtain business license or permit. Not required: a written agreement can Specify duties and authority of each partner. Partnership agreement is an internal document, does it need to be filed with provincial or federal agencies

71
Q

Corporation

A

Register business name and obtain license and permits. Owner must also file articles (amount of shares to be issued, rights and privileges, and the purpose of the corporation), of incorporation with the provincial or federal authorities. Incorporators and shareholders must meet to adapt corporate bylaws and elect Board of Directors. (Setting Company goals and provide governance for the corporation).

72
Q

So proprietor; profits divided

A

100% to the owner

73
Q

Partnership; profits divided

A

Shared equally unless specified in partnership agreement

74
Q

Corporation; profits divided

A

After-tax profits distributed to shareholders and based on the number of shares a shareholder

75
Q

Absolute Advantage

A

The ability to produce a specific product more efficiently than any other country.

76
Q

Comparative Advantage

A

The ability to produce a specific product more efficiently than any other product.

77
Q

Exporting and benefits

A

The selling and shipping of raw materials or products to other countries.

Benefits:

  • more potential customers
  • increased jobs
  • increased income
78
Q

Importing and benefits

A

the buying of raw materials or products from other countries

Benefits:

  • access to resources
  • lower prices
  • more choices for consumers
  • most valuable use of a countries resources
79
Q

Trade deficit

A

negative balance of trade. If a country imports more than it exports.

80
Q

Currency Exchange Rates

A

The value of one currency in relation to another. Changes in currency exchange rates impact the flow of international trade between countries.

81
Q

Balance of Trades

A

The value of exports minus the value of imports for a country.

82
Q

Tariff - trade restriction

A

tax on a particular foreign product being imported into a country

  • To drive up the price of the imported good.
  • Customers are going to be buying less of it, a domestic producers like it because it appears relatively less expensive.
  • Government likes it because tax revenues.
83
Q

Quota - trade restrictions

A

limit on the amount of a particular good that may be imported into a country during a given period of time.

  • raise up the prices of that foreign good and it’s going to result in domestic producers being able to get more of the market.
  • Consumers are going to pay a higher price
  • but there is also no revenue that comes into the government
84
Q

Reasons to impose trade restrictions

A
  • to protect new or weak industries, domestic jobs, the health of citizens, national security.
  • To retaliate for another countries trade restrictions
  • cultural barriers
85
Q

Embargo

A

A complete halt to trading with a particular country or a particular product. Canada has an embargo with Iran and North Korea

86
Q

USMCA Pros

A

Pros:

  • contributes to significant increases in trade and investment.
  • Benefits companies in all three countries.
  • Results in increased sales, new partnerships, and new opportunities.
  • Creates high paying export related jobs.
  • Results in better prices and selection and consumer goods
87
Q

USMCA Cons

A

Cons:

  • Hurts workers by eroding labour standards and lowering wages in Canada and the United States.
  • Undermines national sovereignty and independence. Does not address environmental issues.
  • Hurts the agricultural sector in Canada.
  • Can potentially increase the Canadian trade deficit.
88
Q

Acquisition

A

purchase of an existing company

89
Q

Joint Venture

A

the creation of a separate company that will be run jointly by partnering companies

90
Q

Strategic Alliance

A

a partnership form to create competitive advantage on a worldwide basis

91
Q

Small businesses represented—- % of all companies with employees in Canada.

A

97.9%

92
Q

Small businesses employe —-individuals in Canada, or — of all private sector employees.

A

8.2 mil or 70%

93
Q

Small businesses contribute an average of — to the gross domestic product of their province.

A

30%

94
Q

Female SMEs had contributed —- the economy.

A

$148 billion

95
Q

How to properly cite.

A

Title of document. Date of publication. Name of database. URL.

96
Q

What is an E Scan

A

An E Scan is the identification of trends, relationships and any important events in an organizations internal and external environment.

  • Analyzes these factors in order to detect threats that prohibit its success.
  • Prepares organizations and limits surprises and helps them prepare affective responses.
  • Identifies strengths, weaknesses, threats and opportunities

Business (3 decks)

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