Module 1 mkt380 - Module 1 Reading Chapter 1 Business All...

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Module 1 Reading: Chapter 1 Business: All profit-seeking activities and enterprises that provide goods and services necessary to an economic system. Profits: Rewards for businesspeople who take the risks involved to offer goods and services to customers. Not-For-Profit Organizations: Businesslike establishments that have primary objectives other than returning profits to their owners. Factors of production: Four basic inputs for effective operation: natural resources, capital, human resources, and entrepreneurship. Natural Resources: Include all production inputs that are useful in their natural states, including agricultural land, building sites, forests, and mineral deposits. Capital: Includes technology, tools, information, and physical facilities. Technology is a broad term that refers to such machinery and equipment as computers and software, telecommunications, and inventions designed to improve production. Human Resources: Represent another critical input in every economic system. Human resources include anyone who works, from the chief executive officer (CEO) of a huge corporation to a self-employed auto mechanic. Entrepreneurship: The willingness to take risks to create and operate a business. An entrepreneur is someone who sees a potentially profitable opportunity and then devises a plan to achieve success in the marketplace and earn those profits. Private Enterprise System: Capitalism. Economic system that rewards firms for their ability to identify and serve the needs and demands of customers. Competition: Battle among businesses for consumer acceptance. Competitive Differentiation: The unique combination of organizational abilities, products, and approaches that sets a company apart from competitors in the minds of consumers. Businesses operating in a private enterprise system face a critical task of keeping up with changing marketplace conditions. Private Property: The right to is the most basic freedom under the private enterprise system. Every participant has the right to own, use, buy, sell and bequeath most forms of property. Rights: Private property, competition, profits, freedom of choice. Entrepreneur: Person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business. Six Eras in the History of Business The Colonial Period: Primarily agricultural, Prior to 1776. Before the US declared independence, colonial society emphasized rural and
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agricultural production. Colonial towns were small compared with European cities, and they functioned as marketplaces for farmers and craftspeople. The economic focus of the nation centered on rural areas, because prosperity depended on the output of farms and plantations. The success or failure of crops influenced every aspect of the economy.
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