Introduction to Business Organizations & Strategy

Introduction to Business Organizations & Strategy

• Lecture #1 covers Introduction to Business Models by Prof. Fabrice Léger
• The objectives of this lecture are to understand the key principles influencing the corporate environment
• Learn about industry analysis tools and models to understand the business environment
• Understand what a business is and does, as well as its profitability or not
• Grasp main strategy concepts

Lecture Schedules

• Introduction to Business Models
• Entrepreneurship and start-ups
• Industry Analysis: Structure, Five Forces, and Competitive Environment
• Resources and Capabilities, and Resource-Based View of Organizations
• Developing Competitive Advantages
• Developing a business through a successful product portfolio strategy (BCG, Ansoff, and McKinsey Matrix)
• Market types, differentiations, and repositioning
• Innovation in the organisation
• Organizational Design, structure, and dynamics; Leading the organisation through organisational change
• Managing the Human Capital within and outside of the organisation
• Global market expansion

Seminars

• Established Company
  • Applying business concepts to existing businesses
  • Demonstrating understanding and critical thinking about business operations through presentations
• New Venture from Your Own Idea
  • Creating business plans
  • Applying business concepts to create successful entrepreneurial projects

Logistics

• Course details and technical information are in the syllabus
• Lecture materials are posted on the blackboard

Evaluation

• Final Exam (90 min): Written exam, 50% weighting, 40% pass mark, Pass/Fail criteria
• Group Project: Coursework, 40% weighting, N/A pass mark, Fail criteria
• Individual Participation: Coursework, 10% weighting, N/A pass mark, Fail criteria

Challenges and Expectations

• Connect the dots between different lectures
• Use textbooks to clarify any confusion
• Be self-reliant on group projects

Achieving Professionalism

• Performing at a high level and conducting oneself with purpose and pride

Elements of Professionalism

• Be the best: Strive for excellence in every aspect of work.
• Be dependable: Keep promises, meet commitments, and take responsibility for errors.
• Be ethical: Work responsibly, consider options carefully, and avoid ethical lapses.
• Be a team player: Contribute to the larger goal, and help improve others around you.
• Be clear: Improve communication skills to enhance business development
• Be respectful: Respect others’ time and opinions through good business etiquette

Being a Team Player

• Professionals contribute to a larger cause.
• Effective team players support others and make them more effective.
• Loyalty and protecting the employer's reputation are important aspects of being a team player.

Communicating Effectively

• Listen actively while communicating
• Deliver practical information
• Offer facts, not vague impressions or opinions as facts
• Present information concisely and efficiently
• Clarify expectations and responsibilities
• Provide compelling and persuasive arguments and recommendations

Demonstrating Etiquette

• Adhere to the expected behavioral norms in any given situation.

Maintaining a Confident, Positive Outlook

• Successful people are optimistic.
• They buckle down and complete tasks despite obstacles.
• Positive energy is contagious, while negativity is detrimental.

Part 2 - What do businesses do?

• Businesses are any profit-seeking organization offering goods and services to satisfy customer needs.
• They are also referred to as enterprises or firms.

Understanding What Businesses Do

• Companies make profit by selling goods
• Important to figure out what value is being added
• Difficulty in understanding how start-ups like TikTok make profit.

Ecosystem

• Companies often operate in interconnected chains
• Companies strategize to generate revenue through their choices

Adding Value - The Business of Business

• Revenue is the money made by selling goods and services.
• A business model describes how a business plans to earn revenue
• Profit is the remaining money after subtracting all business costs from revenue

Profit

• Amazon's figures (2014):
  • Revenue: US$88.0988 billion
  • Net income: US$ -241 million.
• Amazon's figures (2015):
  • Revenue: US$107 billion
  • Net income: US$596 million.
• The difference between money coming in and money going out

Competing to Attract and Satisfy Customers

• Competitive advantage means a company or product that is more appealing to its target customers.

Some Businesses Are Nonprofit

• These organizations provide goods or services without profit motives
• They are also called nonprofit organizations
• They must function efficiently to achieve goals

Identifying Major Types of Businesses

• Goods-producing businesses manufacture tangible goods like products from manufacturing or construction.
• Service businesses perform activities that benefit the client, such as healthcare or financial services.
• These are sometimes labor-intensive, and are currently accounting for 75% in developed countries.

Categorize the firms

• Categorizing different types of companies based on products and services offered (Goods, Services, Both). (Example companies include Apple, Ford, M&M’s and a Landscaping company.)

Risk and Reward

• Healthy situation: Decisions have positive and negative outcomes depending on whether a course of action results in success or failure.
• Moral hazard: The risk is taken by someone else, and the consequences are dealt with by others (e.g., other companies, consumers)

Business Sales Models

• Business-to-business (B2B): One business sells to another
• Business-to-consumer (B2C): A business sells to a consumer
• Consumer-to-consumer (C2C): One consumer sells to another
• Consumer-to-business (C2B): One consumer sells to a business

Big Companies and Their Profits

• Data for different companies (such as Apple, Walmart, and ExxonMobil) regarding profit and revenue is presented to demonstrate business figures.

Positive and Negative Effects of Business

• Business has potential contributions like providing goods and services, creating jobs, and collecting taxes, but it also has the potential negative effect of harming the environment.

Part 3 - Business core functions

• Outline of a business's different departments. (Example: financial/accounting, production, marketing)

Major Functional Areas in a Business Enterprise

• Different areas of a business that are responsible for specific functions (finance, production, marketing, human resources, and business services.

Major Functional Areas in a Business Enterprise (1-6)

• Detail regarding each department's function, responsibilities, and role
  • Research & Development
  • Information Technology
  • Manufacturing, Production, or Operations
  • Marketing
  • Finance and accounting
  • Human resources
  • Business Services

Part 4 - The Economic Environment – Key Definitions

What Is This Thing Called The Economy?

• Economy: The combination of all economic activities in a region
• Economics: The study of how a society allocates scarce resources to produce and distribute goods and services

Factors of Production

• Natural resources (land, water, minerals)
• Human resources (workers)
• Capital (tools, equipment, money)
• Entrepreneurship (innovation, initiative for creating new businesses)
• Knowledge (experience, wisdom)

The Economic Impact of Scarcity

• Scarcity: A condition where resources are limited.
• Opportunity cost: The value of the most appealing alternative that was not chosen.

Economic Systems

• Economic system: The policies which determine how a society manages the allocation of resources
• Free market vs. planned economy: Different ways of handling economic resource allocation.

TO DO for F2F lecture session

• Preparation for a live lecture session
• Select a major company
• Discuss industry, sector, added value.
• Be able to describe key concepts in your own words

Apply what you've learned

• Set of questions for review and application of the material learned.
• Defines business, adds value, types of businesses, functional areas, factors of production.