BBA Business Management Chapter 1 Quiz

Course Information

• Course title: BBA-PT XXXV Business Management
• Instructor: Milaika Capella Ras, MBA
• Email: [email protected]
• Session 1 date: January 15, 2025
• Location: Inter-Continental University of the Caribbean

Important Dates

• Extra classes: Thursday January 23, Thursday February 6
• No class: Monday January 27, 2025
• Midterm: January 29, 2025; Chapters 1, 3, 7; 6PM SHARP; no class after the midterm
• Final Exam: February 12, 2025; Chapters 8, 10, 15 & 16; 6PM SHARP

Chapter 1: Prepare for the Road Ahead

• Topic: Motives and Functions of a Business
• Outline:
  • Goal of a business
  • Resources
  • Stakeholders
  • Business environment
  • Business decisions

Value of a Business

• Outline of topics:
  • Organization of a business
  • Business environment
  • Management
  • Managing Employees
  • Marketing
  • Accounting and Financial Management
  • Special Topics

What is a Business?

• Definition: A profit-seeking organization that provides products or services desired by customers.
• Profit factors:
  • Demand for the product/service
  • Ability to attract customers
  • Expenses

Goal of a Business

• Main reason: Profit
• Profit equation: Revenue - Expenses = Profit/Loss
• Revenue: Money brought in through the sale of goods and services
• Expenses: All costs involved in doing business

Business Decisions

• Product: What type of product should be produced?
• Production: How should the product be produced?
• Promotion: How should the product be promoted?
• Financing: How should the company obtain funds to finance the cost of producing the product?

Decision to Create a Business

• How to produce the product (Management Decision)
• How to market and price products (Marketing Decision)
• How to finance the business

Nonprofit Business

• Definition: An organization that serves a specific cause and is not intended to make profits; profits are reinvested in the organization.

Resources

• Natural resources: Minerals, water, wind, oils
• Human resources: Employees
• Capital: Machines, equipment, tools, and physical facilities
• Entrepreneurship: The creation of business ideas and the willingness to take risk

Impact of Technology

• Technology: Knowledge or tools used to produce products and services
• Information technology: Technology enabling information to be used to produce products and services
• E-business/e-commerce: Use of electronic communications (e.g., internet) to produce or sell products and services.

Advantage Technology/e-commerce

• Improved efficiency (quicker production, higher quality)
• Improved communication with customers
• Improved information flow
• Complemented traditional business operations

Stakeholders

• Types: Business owners/shareholders, entrepreneurs, co-owners, stockholders, creditors, employees, managers, suppliers, customers
• Definition: People with an interest in, or affected by, a business

Business Owners

• Creating/expanding a business: Funds required for growth; co-owners may be needed
• Stockholders/shareholders: Investors who buy stock or invest capital (owners or co-owners)
• Responsibility of the firm: Return on shareholders' investment

Creditors

• Definition: Financial institutions or individuals that provide loans
• Components of debt: Principal (amount borrowed) plus interest
• Loan criteria: Creditor reliance on the firm’s repayment capacity

Employees

• Definition: People hired to conduct business operations
• Managers' responsibility: Managing and coordinating employees' tasks; making decisions to achieve organizational goals; maximizing the organization's value.

Suppliers

• Definition: Individual or organization supplying needed products or services
• Important factor: Timely delivery (for effective business performance)

Customers

• Importance: Attracting and retaining customers through desired products/services, reasonable pricing, and adequate quality

Interaction among Stakeholders

• Circular flow of business (owners investing capital, employees running the business, creditors lending money, customers buying products)

Creating a Business Idea

• Steps: Identify competitive advantage, differentiate from competitors, determine necessary resources , assess feasibility

Business Environment

• Components: Social, economic, technological, competitive, legal and regulatory, and global

Key Functions of Business

• Management: Managing resources and employees; means by which employees and resources are used by the business.
• Marketing: Developing, pricing, and promoting products and services
• Finance: Obtaining and using funds for firm operations

Other Functions of Business

• Accounting: Summarise and analyses financial status
• Information Systems: Provide appropriate information for effective decision making.

How Business Decisions Affect a Firm's Earnings

• Connection of management, production, marketing, and finance decisions to revenue, expenses, and profit.

Common Business Decisions

• Management decisions: Determining needed equipment and employee numbers; motivating employees
• Marketing decisions: Setting prices, making product more appealing
• Finance decisions: Obtaining capital; short-term or long-term borrowing; investing in new projects

Business Plan

• Description: Detailed description, product/service description, customer types, competition, production facilities.

Developing a Business Plan

• Assess the business environment: economic, industry, global
• Develop the management plan: Organizational structure, production, human resources
• Develop the marketing plan: Target market, product characteristics, pricing, distribution promotion
• Develop the financial plan: Financing and feasibility
• Assess the business plan: Potential revenues, potential demand, potential expenses and profit potential.

Case 1: Apple (on Moodle)

• Case study on Apple's business practices