Business in Action: Thriving in the Digital Enterprise PDF

Business in Action: Thriving in the Digital Enterprise Tenth Edition Chapter 1 Developing a Business Mindset Copyright © 2024,...

Business in Action: Thriving in the Digital Enterprise Tenth Edition Chapter 1 Developing a Business Mindset Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Learning Objectives What does “value added” mean? How do we categorize businesses? How do you go from consumer to business professional? Which 5 major environments surround every business? What are the 6 functional areas of a business? What are the 7 most important business professions? What is disruptive innovation? Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved What is a Business? “I plan to major in business.” “The current exchange rate is viewed as disadvantageous to Turkish exporting business.” “Our furniture business earned record profits last.” “Apple is a successful business.” Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved What is a Business? Any profit-seeking organization that provides goods and services designed to satisfy the customers’ needs. Profit is generated through ‘value creation’ You must be able to transform lower-value inputs into higher-value outputs. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved What is a Business? Any profit-seeking organization that provides goods and services designed to satisfy the customers’ needs. Profit is generated through ‘value creation’ You must be able to transform lower-value inputs into higher-value outputs. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Value Creation Adding Value to Satisfy Customers Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Adding Value: The Business of Business Revenue – Money that a company brings in through the sale of goods and services. Business model – A concise description of how a business intends to generate revenue. Profit – Money left over after all the expenses involved in doing business have been deducted from the revenue. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Adding Value: The Business of Business The basic ‘problem’ of a business is how to convince customers to give them money in exchange for what the company is offering. – “I don’t need it.” – “I don’t want it.” – “I can make it at home.” – “What is that? Never heard of it…” – “I can buy it cheaper at Y.” COMPETITION – “X has a better one.” – Etc. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Competing to Attract and Satisfy Customers Competitive advantage – Some aspects of a product or company that make it more appealing to its target customers. Barrier to entry – Any resource or capability a company must have before it can start competing in a given market. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Types of Businesses Not-for-profit organizations – Organizations that provide goods and services without having a profit motive; these are also called not-for-profit organizations. – Examples? Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Types of Businesses Goods-producing businesses – Companies that create value by making “things” – Most goods are tangible (vs. intangible) Service businesses – Companies that create value by performing activities that deliver some benefit to customers. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Risk, Reward, and Moral Hazard Relationship between risk and reward is fundamental to every modern economy. A company needs to see some promise of reward before it will decide to accept the risks involved in creating and selling products. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Risk, Reward, and Moral Hazard The connection between decisions and risks must be maintained. If there is no connection between business decisions and risks, firms may start acting ‘irresponsibly’. Having a connection between decision and risk means if a decision turns out to be bad, the company will suffer the consequences. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Risk, Reward, and Moral Hazard Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Role of Business in Society Offering valuable goods and services Providing employment Paying taxes Contributing to national growth, stability, security BUT ALSO Generating pollution and waste Creating health and safety risks Disrupting communities Causing financial instability Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Exhibit 1.4 Positive and Negative Effects of Business Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved What is the Business Mindset? A view of business that considers the various decisions that must be made and the many problems that must be overcome before companies can deliver the products that satisfy customer needs. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Exhibit 1.3 (1 of 2) The Business Mindset Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Exhibit 1.3 (2 of 2) The Business Mindset Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Categorizing Businesses By product types and ranges – Goods vs services By size small and medium enterprises vs multinational corporation – SME vs MNC By geographic reach – Local, regional, national, multi-national By ownership – Single vs partnership vs public Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Categorizing Businesses Goods-producing businesses are often capital-intensive businesses. sermaye yoğun şirketler Service businesses tend to be labor-intensive businesses. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Multiple Environments of Business Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Multiple Environments of Business Social environment – Trends and forces in society at large Stakeholders – Internal and external groups affected by a company’s decisions and activities. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Multiple Environments of Business Technological environment – Forces resulting from the practical application of science to innovations, products, and processes – Disruptive technologies ▪ Those that fundamentally change the nature of an industry ▪ Can be powerful enough to create or destroy entire companies Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Multiple Environments of Business Economic environment – The conditions and forces that affect the cost and availability of goods, services, and labor and thereby shape the behavior of buyers and sellers Legal and regulatory environment – Laws and regulations at local, state, national, and even international levels Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Multiple Environments of Business Market environment – A company’s target customers, the buying influences that shape the behavior of those customers, and competitors that market similar products to those customers. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Functional Areas Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Functional Areas Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Functional Areas Research and development (R&D) – Functional area responsible for conceiving and designing new products Information technology (IT) – Systems that promote communication and information usage through the company, or that allow companies to offer new services to their customers. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Functional Areas Manufacturing, production, and operations – An area where the company makes whatever it makes (for goods-producing businesses) or does whatever it does (for service businesses) – Purchasing, logistics, and facilities management Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Functional Areas Marketing – Charging with identifying opportunities in the marketplace – Working with R&D to develop the products to address those opportunities – Creating branding and advertising strategies to communicate with potential customers and setting prices Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Functional Areas Finance and accounting – Responsible for virtually every aspect of a firm’s finances – Ensuring that the company has the funds it needs to operate – Monitoring and controlling how those funds are spent – Drafting reports for company management and outside audiences such as investors and government regulators Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Functional Areas Human resources (HR) – Responsible for recruiting, hiring, developing, and supporting employees Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Functional Areas Business services – Exist to help companies with specific needs in law, banking, real estate, and other areas Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved