BSM 100 Midterm Review PDF

BSM 100 - Midterm Review Lecture 1 - Role of Business in Economy & Society Business Fundamentals Success = find a need for goods & services, fill those needs w/ team, marketing, finance, operation Business: seeks to provide goods & services operating for profit Reliable a...

BSM 100 - Midterm Review Lecture 1 - Role of Business in Economy & Society Business Fundamentals Success = find a need for goods & services, fill those needs w/ team, marketing, finance, operation Business: seeks to provide goods & services operating for profit Reliable accountant Goods: tangible products (physical - food, clothing...) Good lawyer Services: intangible products (education, insurance...) Strong managers Entrepreneur: individual who risks time & money to start a business Entrepreneurship: accepting risk and running business Revenue: total amount of money received for goods sold and services provided (quantity x price) Profit: amount of money a business earns (revenue - expenses = profit) Loss: business expenses are more than its revenue HUGE RISKS can = HUGE PROFITS Risk: chance of losing time & money in business Standard of Living: amount of goods and services people can buy w/ the money they have Quality of Life: general well-being of society - political freedom, healthcare, education, safety... Business Stakeholders Stakeholders: who stand to gain/lose by business actions (shares of the company) PRIMARY - business would not exist without their participation SECONDARY - influence is not essential to the survival of the business I Offshoring: require sourcing part of the purchased inputs outside of the country (Canada offshore w/ US) Outsourcing: contracting w/ other companies to do some/all functions of a firm Risk: offshore companies could use info from firms to produce Insourcing: initiative to return jobs to companies exist in various industries competitive products. Non - profit Organization: do not make personal profit, financial gains for social or educational Social Entrepreneurs: individuals who use business principles to start and manage non-profit organization, help address social issues Social Enterprise: ventures created by social entrepreneurs to address social/environmental needs 5 Factors of Production Land - (natural resources - used to make homes, cars...) Labour - (workers - source of producing goods/services) All factors of production Capital - (physical assets - machines, tools... production of goods) affect each other. Entrepreneurship - (resources low value unless used for business) Entrepreneurship + knowledge = wealth Knowledge - (info tech to determine wants + needs w/ products) Lecture 2 - Business Opportunities Product Development adapt products to new competition & markets Key activity in any modern business to compete and design for the best VALUE & QUALITY Value: good quality at a fair price Consumers calculate value of a product, view benefits, subtract cost to see if benefit exceed costs Total Product Offer (value package) everything that consumers evaluate when deciding whether to buy something (*tangible & intangible factors*) Product Line: group of products that are physically similar or intended for a similar market (iPhone 15, Mini, Pro, Pro Max) Product Mix: combination of product lines offered by a business (iPhone, iPad, Mac, Airpods...) Product Differentiation: creation of real/perceived product differences Bundling: combines goods/services for a single price Packaging Changes Products Packaging changes and improves basic products, more ATTRACTIVE to retailers Attract Provide info of contents Protect goods Provide price/value Easy to open and use Info on warranties, warnings customer matter UPC (Universal Product Codes): help control inventory, barcode provides product’s price, size & colour RFID (Radio Frequency Identification): track products, carry more information than barcodes IoT (Internet of Things): data-collecting technologies, objects can communicate with one another (sensors, actuators, cameras, data collection, cloud computing, data analysis, AI) Value Proposition Canvas Focus on customer needs, pains, gains and fit of the product/service and the market Customer Jobs: what customers are trying to get done in their work and lives Customer Pains: bad outcomes, risks, obstacles related to customer jobs Customer Gains: the more or less expected benefits the customers are seeking Products & Services: a list of all the products & services a value proposition is built around Pain Relievers: how your products and services kill or alleviate customer pains Gain Creators: how your products and services create customer gains Lecture 3 - Identifying Customers Marketing Process PRODUCT - meet the need based on research PLACE - distribution system PROMOTION - design promotional program PRICE - set a price Market Research: analyze markets to determine opportunities and challenges, find info to make business decisions 1. Define - the question (problem/opportunity), determine the present situation 2. Collect - primary or secondary data 3. Analyze - analyze and identify patterns in data for info 4. Choose - best solution and implement Primary Data: facts, figures, and opinions that you gathered yourself (survey, personal interview, observation, focus group) Secondary Data: not the first one to gather them (newspaper, internal sources, databases, google…) Environmental Scanning: process of identifying factors that can affect marketing success Business Model Broader view of business, resource, revenue, streams, cost structure... How you plan to make sales ($), REVENUE MODEL - COST MODEL 1. Customer: WHO? - who will buy your product? Target group/Demographic? 2. Problem/Pains - define problem 3. Solution/Key - what specific features of your solution 4. Value Proposition - what is your product/service? 5. Channels - how will reach customers? 6. Revenue Stream - how will you charge for product/service? Price? 7. Cost Structure - what will you need to spend money on? 8. Key Metrics - how will you measure your progress & benefit to customers? 9. Unfair Advantage - why is your offer better than others? (what no one else can) Lecture 4 - Understanding Business Environment Business Environment The business environment consists of the surrounding factors that either help or hinder the development of businesses. Laws & Regulatory Environment Regulations are laws and rules (by politicians) affects how business can operate Willing to start new businesses, if they believe the risk is not too great Part of that decision is affected by how governments work with businesses Freedom of ownership Contract laws Elimination of corruption Government can lessen the risk of starting and running a business through laws Examples of laws: Canada Small Business Financing Act, Consumer Packaging and Labelling Act, and the Trade Unions Act. Economic Environment Income, expenditures, and resources that affect the cost of running a business Business reviews results of economic indicators - consumer spending, employment levels, productivity Tradable currency Minimum taxes and regulation Imports and exports Employment levels and productivity Foreign Exchange - the movement of a country’s currency relative to other currencies Entrepreneurship - the degree of entrepreneurship that is present Technological Environment Inventions or innovations from applied science or engineering research Information and technology Databases & barcodes The Internet Social Media Wireless communications The use and application of technology affects productivity Productivity = amount of output you generate given the amount of input ‣ The more you can produce in a period of time, the more money you are worth Productivity Effectiveness - producing the desired result Efficiency - producing goods and services using the least amount of resources E-Commerce Websites that allow transactions so customers can buy products online. (subset of e-business) Millions of people using web-based content = rise in risks associated with personal security Identity Theft - act of obtaining personal information about a person, such as social insurance number, credit card #, using that information for illegal purposes, such as making purchases. Types of e-commerce transactions: Business-2-Consumer (B2C): regular business that companies do online w/ individual customers Business-2-Business (B2B): business partners w/ other businesses (suppliers of materials to a manufacturer) Business-2-Government (B2G): business w/ government agencies & departments to supply goods/ services (web service supporting the ministry of health.) Government-2-Consumer (G2C): business the government does online w/ people (renewing license or applying for permits) Social Media Marketing Youtube, Facebook, Twitter, Instagram, Pinterest, Blogging Competitive Environment All environments are important, but the degree to which you need to deal w/ depends on whether you do/do not have competition Customer service Stakeholder recognition Employee service Concern for the environment Competing by giving employees decision-making authority: empowerment To meet customer needs, businesses must give front-line workers (office clerks, front-desk, salespeople...) the responsibility, authority, freedom, training, and equipment required to respond quickly and effectively to customer requests to produce quality goods and services. Competitive Strategies Exceed customer expectations ◦ Business is becoming customer-driven Deliver faster (speed) ◦ Service, new product introduction Restructuring and empowerment ◦ Responsibility, authority, autonomy, training, and equipment to front line Concern for environment Social Environment (social-cultural environment) Particularly interested in the demographic trends that most affect businesses and career choices. Demography: the statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income. ◦ Diversity, demographic changes, family The Aging Population More people are living longer due to: better medical knowledge and technology better health habits (proper nutrition, more exercise, a reduction in the number of smokers) Managing Diversity Canada has a strong multicultural population Welcomed close to 2.7 million permanent residents in the last ten years Global Environment How do global changes affect you? As businesses expand to serve global markets, new jobs will be created in both manufacturing and service industries Global trade also means global competition Rapid changes create a need for continuous learning Ecological Environment Few issues have captured the attention of the international business community Climate change - temperature movement of the planet up/down overtime. Issue: global warming Carbon emissions were reduced by 7% as major industrial and transportation activities were forced to slow down during the COVID-19 pandemic Different Economic Systems Capitalism (free-market): production & distribution of goods/services owned by individuals for profit State Capitalism: combination of free makers and some government control Communism: government makes economic decisions and factors of production of consumers Socialism: basic business should be owned by the government so profits can be distributed equally Mixed Economy: combines capitalism and socialism, government involvement and social equality Capitalism: Free Markets The free market: what to produce and in # of quantities made by the market ◦ Buyers and sellers negotiating prices for goods and services. Buyers and sellers trading freely determine prices at which they will exchange goods/services The constant interplay between supply & demand determines an equilibrium price at which a transaction will occur Economic Concept of Supply and Demand Supply: quantity of products manufacturers are willing to sell at different prices at a specific time ◦ amount supplied will increase price, sellers can make more $ w/ higher price Demand: quantity of products that people are willing to buy at different prices at a specific time ◦ quantity demanded will increase as price decreases Equilibrium Point: point where quantity demanded and supplied meet Market Price: is determined by supply and demand Competition within Free Markets 1. Perfect Competition: many sellers in a market and no seller is large enough to dictate the price of a product (flea market) 2. Monopolistic: a large # of sellers produce goods that are very similar but are perceived by buyers as different 3. Oligopoly: a few sellers dominate a market (tobacco, cars, aircraft) 4. Monopoly: only one seller for a good or service, controls the total supply of a product & price (water, cell services - essentials)