Chapter 1:

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Chapter 1:

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Slide1

Chapter 1: Business Now

Change is the Only Constant

Slide2

Looking Ahead

LO1 Define business and discuss the role of business in the economy

LO2 Explain the evolution of modern business

LO3 Discuss the role of not-for-profit organizations in

the

economy

Slide3

LO4 Outline the core factors of production and how they influence the economyLO5 Describe today’s business environment and discuss each key dimensionLO6 Explain how current business trends might influence your career choices

Looking Ahead

Slide4

LO1 Business Now:Moving at Breakneck Speed

In the last decade, the players, what consumers want, and how we buy has changed

Companies are being launched and growing faster than ever

Mature firms are being merged, acquired, and dissolved

Slide5

Business – any activity that provides goods and services in an effort to earn profit

Not-for-profit organizations – focus on causes not profit

Business Basics

Slide6

Profit – the financial reward that comes from starting and running a business; the money that a business earns in sales (or revenue), minus expenses

Business Basics

Slide7

Business Basics

Entrepreneurs – people who risk time, money, and other resources to start and manage a business

Business drives up the

Standard of Living

which, in turn, contributes

to the

Quality of Life

Slide8

Business Encourages Entrepreneurial Spirit

Slide9

LO2 The History of Business:Putting It All In Context

Relationship Era

Marketing Era1950s

Production EraEarly 1900s

Entrepreneurship EraSecond half of 1800s

Industrial Revolution1700-mid 1800s

Mass Production

Factories

Work Specialization

Efficiency

Industrial Titans

Wealth Creation

Increase in Living Standard

Manipulation/Competition

Exploitation

Assembly Line

Refining ProductionProductivity GainsDecrease CostsHard SellNo Customer Focus

Consumer PowerGrowth in ConsumerismProduct DifferentiationCustomer Focus

Long-term

Relationships

Satisfied Customers

Use of Technology

Slide10

LO3 Not-For-Profit Organizations and the Economy: The Business of Doing Good

Not-for-profit organizations focus on health, human services, education, art, religion, and culture

Canada’s 161 000 non-profits contribute more than $80 billion to the economy

While focused on “doing good” rather than financial gain, non-profits are businesses in every other sense: they employ people, take in revenue, and produce goods and services

Slide11

LO4 Factors of Production: The Building Blocks

Businesses rely on some combination of these factorsEntrepreneurial activity can kick-start an economy by harnessing the other factors of production

Natural Resources

Capital

Human Resources

Entrepreneurship

Slide12

LO5 The Business Environment: The Context for Business

Slide13

Government takes an active role to support businesses:Economic development is supported by Industry CanadaProvinces promote economic development by providing investment and tax incentives Legislation supports enforceable contracts

Economic Environment

Free enterprise and fair competition flourish in Canada

Slide14

Economic Vulnerabilities

CEO/Worker pay gap

Corruption and ethical lapses

Consumer debt

Federal/provincial debt

Slide15

Competitive Environment

Today’s competition is intense

Companies must focus on loyal customers because they are the

vocal promoters of their products/services

Slide16

Competitive Environment

Companies must provide unsurpassed value

Value is the size gap between benefit and price

The cheapest product does not mean value

The key to value is quality

Slide17

Competitive Environment

How fast firms get products to market can be a competitive advantageBleeding edge firms launch products that fail because they are ahead of the marketLeading edge firms offer products just as the market is ready

Apple computers was not first to the MP3 market but they now own 75% market share

Employees are another key competitive advantage

Slide18

Competitive Principles

Avoid your competitors’ strengths and exploit their weaknesses; don’t try and beat them at their game

Always be a little paranoid; never underestimate your competition

Competitors will usually get better when pushed

Competitors are sometimes irrational when pushed

Slide19

Top 10 global brands all U.S.-basedJapan, Germany, Finland, S. Korea, and France-based brands all included among the next 10 best

Insert exhibit 1.3, p. 8, C2e

Competition is Changing

Slide20

Inventions with Impact(Can you identify four Canadian inventions?)

LaptopBlackberryViagraCamcorder

Cat litterPoutineInsulinBikinis

Disposable diapers Zippers

Kool-Aid Astroturf

Great Inventions that have impacted human life….for better or for worse

Slide21

Technological Environment

Business technology includes any tools that businesses can use to become efficient and effective

Source of competitive advantage

Industries have experienced dramatic change

New industries have emerged

Slide22

Technological Environment

Technology continues to evolve at breakneck speed; the change in everyday life and business operations is almost unimaginableCompanies that welcome change and manage it well will clearly be the winners

Slide23

Social Environment

DiversityAging populationRising worker expectationsEthics and social responsibility

Slide24

Shades of Green: The Six Sins of Greenwashing

Sin of hidden trade-off

Sin of no proof

Sin of vagueness

Sin of irrelevance

Sin of lesser of two evils

Sin of fibbing

Slide25

Global Environment

Terrorism is more of a threat today

Job Migration

China and India’s economies are growing

Technology

Free TradeNatural Disasters

Blurred lines between countries/world

Technology is linking

customers/suppliers

worldwide

Slide26

Global Environment

Both China and India have been growing relatively fast due to foreign investment and internal development

China has been a magnet for manufacturing jobs and India for high tech jobs

Slide27

LO6 Business and You:Making it Personal

What are your passions?

What are business careers that encompass your passions?

Slide28

Looking Back

What is the role of business in the economy?

How has business evolved?

What is the role of non-profits in the economy?

Slide29

Looking Back

What are the core factors of production?

What are the elements of the environment affecting business?

How are business trends impacting careers?

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