Chapter 1-Exploring the world of Business and Economics.ppt

Chapter 1-Exploring the world of Business and Economics.ppt...

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Exploring the World of Business and Economics
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Introduction Free enterprise Individuals are free to: decide what to produce how to produce it at what price to sell it Solarseven/Dreamstime.com
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Your Future in the Changing World of Business What do you want? Why do you want it? Write it down! Success “Success is a journey, not just a destnaton” --Joe Dudley
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Why Study Business? For help in choosing a career To be a successful employee To improve your management skills To start your own business To become a better informed consumer and investor
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Tips for Studying Business Prepare before you go to class Read the chapter Underline or highlight important concepts Take notes Apply the concepts Practice critical thinking Prepare for the examinations
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What Is Business? The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs
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Classification of Businesses Service businesses Produce services, such as haircuts, legal advice, or tax preparation Example: H&R Block Manufacturing businesses Process various materials into tangible goods Example: Intel Marketing intermediaries Buy products from manufacturers and then resell them Example: Sony Corporation
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The Importance of Manufacturing “. . . Not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufactures. Every nation, with a view to those great objects, ought to endeavor to possess within itself all the essentials of national supply. These comprise the means of subsistence, habitation, clothing, and defense.” —Alexander Hamilton, A Report to Congress on the Subject of Manufactures, 1791
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What is e-Business? The organized effort of individuals to produce and sell for a profit, the goods and services that satisfy society’s needs through the facilities available on the Internet e-business has become: An accepted method of conducting business A way for businesses to increase sales and profits and reduce expenses
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The Relationship Between Sales Revenue and Profit Profit is what remains after all business expenses have been deducted from sales revenue A loss (negative profit) results when a firm’s expenses are greater than its revenues
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The Function of Profit Profit is: Reward for producing goods and services people want Compensation for assuming the risk of ownership: Risk of not receiving payment Risk of losing investment
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Stakeholders Stakeholders are all the different people or groups of people who are affected by the policies and decisions made by an organization Stakeholders include: Consumers Marketing intermediaries Stockholders Employees
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Economics Economics is the study of how wealth (anything of value) is created and distributed Microeconomics is the study of the decisions made by individuals and businesses Macroeconomics is the study of the national and global economies
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