CLASS NOTES 9/1/16 - Business Chapter 1
Amazon and Pinterest – not profitable soon after startup – the promise of profit
What is business – goods, services, revenue, profit, entrepenuer Jeff Bezos
Businesses Contribute to society through innovation
– UBER, CELLPHONES,WALGREENS
Examples of businesses contributions to society
YMCA – providing community spaces for exercises, classes etc
NETFIX – easy access to entertainment
GOOGLE – easy access to information
WALMART – low price one stop shopping
Innovative * provide jobs increase standard of living affecting the economy
Outside factors affect businesses * The Economic environment * Employment
Ford GM & Chrysler – why Ford survived. Convincing the banks
TEXTBOOK "According to Charles Darwin, it is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. And so it is with business"
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MY SIDEBAR
Social
entrepreneurship is the
use of start up company-style business venture techniques to develop, fund and
implement innovative solutions to social,
cultural, or environmental issues. This concept may be applied to a variety of
organizations with different sizes, aims, and beliefs.
CLASS NOTES 9/6/16 - Business Chapter 1
Refocused – Ford : 2006; timed borrowing; Tata of India bought luxury brands
Key elements of US Economy – greater incentives in US
2.
Copyrights /Patents
The
Economic Environment
The
Competitive Environment
The
Workforce Advantage
Developed, Developing, ; factors:
per
capita income
Taxes, - tax rates
by country
TRYING VS NOT TRYING
SOFTWARE INFRASTRUCTURE
VENDOR RELATIONSHIPS
The
Global Environment
Outsourcing – US hospitals outsourcing radiology work to
India
Foreign outsourcing means contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production. H&M, for instance, relies on a network for manufacturers around the globe, mostly in less developed parts of the world, including Kenya, Cambodia, Indonesia, Myanmar, Sri Lanka, and Bangladesh. Apple depends on firms in China and Taiwan to produce the iPhone. And countless small companies contract with foreign manufacturers as well. The key benefit, of course, is dramatically lower wages, which drive down the cost of production.
While foreign outsourcing lowers costs, it also involves significant risk. Quality control typically requires very detailed specifications to ensure that a company gets what it actually needs. Another key risk of foreign outsourcing involves social responsibility. A firm that contracts with foreign producers has an obligation to ensure that those factories adhere to ethical standards. Deciding what those standards should be is often quite tricky, given different cultures, expectations, and laws in different countries. And policing the factories on an ongoing basis can be even harder than determining the standards. But companies that don’t get it right face the threat of significant consumer backlash in the United States and Europe. This has been a particular issue with products produced in China. In the recent past, for instance, product defects forced U.S. firms to recall a host of Chinese-produced toys, including Thomas the Tank Engine trains that were coated with toxic lead paint, ghoulish fake eyeballs that were filled with kerosene, and Polly Pocket dolls that posed a swallowing hazard. And in 2013, Greenpeace released a study that showed that the bulk of children’s clothing produced in China—the world’s largest exporter of textiles—contains hazardous levels of toxic chemicals.
"Many Americans have become personally familiar with the quality/cost trade-off as
a growing number of companies have outsourced customer service to foreign call centers.Research suggests that the approximate cost of offering a live, American-based, customer service agent averages about $7.50 per call, while outsourcing those calls to live agents in another country drops the average cost down to about $3.25 per call. But customers end up paying the difference in terms of satisfaction, reporting high levels of misunderstanding, frustration, and inefficiency. A number of firms—such as jetBlue and Amazon.com—have enjoyed the best of both worlds by outsourcing customer service calls to U.S. agents
who work from their own homes."
Foreign outsourcing means contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production. H&M, for instance, relies on a network for manufacturers around the globe, mostly in less developed parts of the world, including Kenya, Cambodia, Indonesia, Myanmar, Sri Lanka, and Bangladesh. Apple depends on firms in China and Taiwan to produce the iPhone. And countless small companies contract with foreign manufacturers as well. The key benefit, of course, is dramatically lower wages, which drive down the cost of production.
While foreign outsourcing lowers costs, it also involves significant risk. Quality control typically requires very detailed specifications to ensure that a company gets what it actually needs. Another key risk of foreign outsourcing involves social responsibility. A firm that contracts with foreign producers has an obligation to ensure that those factories adhere to ethical standards. Deciding what those standards should be is often quite tricky, given different cultures, expectations, and laws in different countries. And policing the factories on an ongoing basis can be even harder than determining the standards. But companies that don’t get it right face the threat of significant consumer backlash in the United States and Europe. This has been a particular issue with products produced in China. In the recent past, for instance, product defects forced U.S. firms to recall a host of Chinese-produced toys, including Thomas the Tank Engine trains that were coated with toxic lead paint, ghoulish fake eyeballs that were filled with kerosene, and Polly Pocket dolls that posed a swallowing hazard. And in 2013, Greenpeace released a study that showed that the bulk of children’s clothing produced in China—the world’s largest exporter of textiles—contains hazardous levels of toxic chemicals.
"Many Americans have become personally familiar with the quality/cost trade-off as
a growing number of companies have outsourced customer service to foreign call centers.Research suggests that the approximate cost of offering a live, American-based, customer service agent averages about $7.50 per call, while outsourcing those calls to live agents in another country drops the average cost down to about $3.25 per call. But customers end up paying the difference in terms of satisfaction, reporting high levels of misunderstanding, frustration, and inefficiency. A number of firms—such as jetBlue and Amazon.com—have enjoyed the best of both worlds by outsourcing customer service calls to U.S. agents
who work from their own homes."
STUDY
Business
- Profit vs non-profit SBA
CHAPTER REVIEW
1-1 Define business and discuss the role of business in the economy.
A business is any organization or activity that provides goods and services in an effort to earn a profit. Profit is the money that a business earns in sales, minus expenses, such as the cost of goods and the cost of salaries. Profit potential provides a powerful incentive for people to start their own businesses, or to become entrepreneurs. Successful businesses create wealth, which increases the standard of living for virtually all members of a society.
1-2 Explain the evolution of modern business.
Business historians typically divide the history of American business into five distinct eras, which overlap during the periods of transition.
Industrial Revolution: From the mid-1700s to the mid-1800s, technology fueled a period of rapid industrialization. Factories sprang up in cities, leading to mass production and specialization of labor.
Entrepreneurship Era: During the second half of the 1800s, large-scale entrepreneurs emerged, building business empires that created enormous wealth, but often at the expense of workers and consumers.
Production Era: In the early 1900s, major businesses focused on further refining the production process, creating huge efficiencies. The assembly line, introduced in 1913, boosted productivity and lowered costs.
Marketing Era: After WWII, consumers began to gain power. As goods and services flooded the market, the marketing concept emerged: a consumer-first orientation as a guide to business decision making.
Relationship Era: With the technology boom in the 1990s, businesses began to look beyond the immediate transaction, aiming to build a competitive edge through long-term customer relationships.
1-3 Discuss the role of nonprofit organizations in the economy.
Nonprofit organizations often work hand in hand with business to improve the quality of life in our society. Nonprofits are business-like establishments that contribute to economic stability and growth.Similar to businesses, nonprofits generate revenue and incur expenses. Their goal is to use any revenue above and beyond expenses to advance the goals of the organization, rather than to make money for its owners. Some nonprofits—such as museums, schools, and theaters—can act as economic magnets for communities, attracting additional investment.
1-4 Outline the core factors of production and how they affect the economy.
The four factors of production are the fundamental resources that both businesses and nonprofits use to achieve their objectives.
Natural resources: All inputs that offer value in their natural state, such as land, fresh water, wind, and mineral deposits. The value of natural resources tends to rise with high demand, low supply, or both.
Capital: The manmade resources that an organization needs to produce goods or services.The elements of capital include machines, tools, buildings, and technology.
Human resources: The physical, intellectual, and creative contributions of everyone who works within an economy. Education and motivation have become increasingly important as technology replaces manual labor jobs.
Entrepreneurship: Entrepreneurs take the risk of launching and operating their own businesses. Entrepreneurial enterprises can create a tidal wave of opportunity by harnessing the other factors of production.
1-5 Describe today’s business environment and discuss each key dimension.
Accelerating change marks every dimension of today’s business environment.
Economic environment: In late 2008, the U.S. economy plunged into a deep financial crisis. The value of the stock market plummeted, companies collapsed, and the unemployment rate soared. The president, Congress, and the Federal Reserve took unprecedented steps—including a massive economic stimulus package—to encourage a turnaround.
Competitive environment: As global competition intensifies, leading-edge companies have focused on long-term customer satisfaction as never before.
Technological environment: The recent digital technology boom has transformed business, establishing new industries and burying others.
Social environment: The U.S. population continues to diversify. Consumers are gaining power, and society has higher standards for business behavior.Sustainability has become a core marketplace issue.
Global environment: The U.S. economy works within the context of the global environment. The worldwide recession has dampened short-term opportunities, but China and India continue their rapid economic development.
CLASS NOTES 9/13/16 - Business Chapter 2
CLASS NOTES 9/13/16 - Business Chapter 2
Ch2 Folder
Khan Academy VideoPlease watch before class Mon Sept 12-
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Please check the slideshow that is embedded in this article
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