BADM 101 Chapter 1 - Fall 2024 PDF

Key Concepts in Business & Management BADM 101 Dr. Rania El Garem Assistant Professor of Management f Alumni Unit & Career Center-SOBF ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom....

Key Concepts in Business & Management BADM 101 Dr. Rania El Garem Assistant Professor of Management f Alumni Unit & Career Center-SOBF ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.  Chapter 1 Taking Risks and Making Profits within the Dynamic Business Environment ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.  Chapter Contents 1. Matching Risk with Profit 1. Requirements for the success in business. 2. Standard of Living & Quality of life 2. Business, goods and services. 3. Responding to the different Business Stakeholders. 3. The purpose and function of the 4. Using Business Principles in Nonprofit Organizations. business. 5. Outsourcing 4. Revenues, Profits, and Losses. 6. The Five Factors of Production 5. Generating Revenues & Financial 7. The 5 business environments sustainability A. The economic & legal environment o 6. The difference between goods & services. B. The technological Environment 7. Entrepreneur and his key characteristics. C. The competitive environment 8. Advantages and disadvantages of D. The social environment Entrepreneur. E. The Global environment 9. Value Proposition. 8. Sustainability 4 Thinking Activity Analyze this scene!!!! Ahmed Ramzy thought of Uber back in 1961 but Shoukry Sarhan killed the idea”  The most I liked about this is that: 1. He was able to smartly detect and identify a problem/challenge, 2. build a solution, 3. define a monetization business model, 4. develop a marketing plan, 5. launch the service, and 6. started the customers and drivers acquisition. 7 1- NOW, SUCCESS IN BUSINESS REQUIRES WHAT???? 8 Success in Business is based on: 1- Filling a gap in the market 2- Finding what customers want and need 3-Solving a consumer problem. 4- Constantly adapting to changes in Market. 9  2- Business, Goods & Services  Business — Any activity that seeks to provide goods and services to others while operating at a profit.  Goods — Tangible products such as computers, food, clothing, cars, and appliances.  Services — Intangible products (that can’t be held in your hand) such as education, health care, insurance, recreation, travel and tourism.  What is the main difference between goods & services?!!! Once you have developed the right goods and services, based on consumer wants and needs, you need to reach those consumers using whatever media they prefer, including TV, social media, online advertising, & more. 10  3- The Purpose and function of the business 11  The Purpose of the  The Function of the business business  the function of a business  The purpose of a business refers to the specific activities refers to its underlying reason and operations it performs to for existence or the broader fulfill its purpose and achieve objective it aims to achieve. its goals.  It encompasses the mission,  Functions can include vision, and values that guide production, marketing, finance, the organization's activities. human resources, and more. 12  Activity 1 1-Purpose: To provide convenient and affordable transportation Please mention the type of the business and its function. 13 Company: Ride-sharing companies like Uber & Careem Function: connect drivers and passengers through a mobile app, offering a convenient alternative to traditional taxis. 14 2-Purpose: To connect people worldwide through social networking. Please mention the type of the business and its function. 15 Company: Facebook Function: A leading social media platform, provides a digital space for users to connect, share content, and communicate with others. 16  4- Revenues, profits & Losses 17  4- Revenues, Profits, and Losses Revenue — The total amount of money a business takes in during a given period by selling goods and services. Profit — The amount of money a business earns above and beyond what it spends for salaries and other expenses. Loss — When a business’s expenses are more than its revenues. 5- Generating Revenues & Maintain Financial Sustainability 19 Activity 2  Please mention how the following companies GENERATE REVENUES AND MAINTAIN FINANCIAL SUSTAINABILITY? A. Hotels B. Restaurants C. Banks 20  A-Hotels  Revenue Generation:  Financial Sustainability:  Hotels generate revenue  Hotels maintain financial through sustainability by 1. room bookings, 1. optimizing occupancy 2. conference services, rates, 3. food and beverage sales, 2. managing operational costs, 4. additional services like spa treatments, 3. implementing revenue management strategies, 5. parking fees, 4. providing exceptional guest 6. partnerships with travel experiences, agencies 5. investing in marketing and 7. online booking platforms promotional activities 21  B-Restaurants  Revenue Generation:  Financial Sustainability: Restaurants generate Restaurants maintain revenue through financial sustainability by 1. food and beverage sales, 1. managing food and labor 2. including dine-in, takeout, costs, and delivery services. 3. Additional revenue streams 2. optimizing menu pricing, may include catering 3. maintaining consistent services, quality and service, 4. private events, 4. building customer loyalty, 5. partnerships with food delivery platforms, 5. effectively marketing their 6. merchandise sales offerings 22  C-Banks  Financial Sustainability:  Revenue Generation:  Banks maintain financial  Banks earn revenue through sustainability by: various channels, including: 1. managing their loan 1. interest income from portfolios effectively, loans, 2. maintaining a healthy 2. fees charged for services balance between interest like account maintenance, income and interest 3. transaction fees, expenses, 4. credit card fees, and 3. controlling operating costs, 5. investment banking 4. continuously monitoring and activities. managing credit risk. 23 6- Difference Between Goods & Services 24  Activity 3: In Restaurants, What is the difference between Goods & Services? 25  In restaurants, the different types of goods and services can be categorized as follows: Goods in Restaurants  Food Products: This includes ingredients such as meat, poultry, seafood, vegetables, fruits, grains, dairy products, spices, and condiments used in the preparation of meals.  Beverages: This includes like soft drinks, juices, coffee, tea, water.  Ingredients and Supplies: Restaurants require various supplies and ingredients for their operations, including cooking26oils, flour, sugar, salt, cleaning supplies, utensils, cutlery, plates,  Services in Restaurants 1. Meal preparation 2. Serving beverages 3. Dining Experience. 4. Customer Service. 5. Payment Processing The combination of quality goods and excellent service is essential for the success of a restaurant. 27  7- Entrepreneur 28 Entrepreneur A person who risks Time and Money to start and manage a business. He is someone with the Foresight drive & Ambition to take a risk & solve business or consumer problems. 29  Activity 4: A- Which Entrepreneur is known for his ventures in the electric vehicle industry?  a) Steve Jobs  b) Elon Musk  c)Mark Zuckerberg  d) Jeff Bezos 30 Which company did Elon Musk co-found in the electric vehicle industry?  a) General Motors  b) Ford Motors  c) Tesla Motors  d) Toyota Motors 31 What was Elon Musk's goal with Tesla Motors?  a) Accelerating sustainable transportation  b) Dominating the luxury car market  c) Creating affordable electric vehicles for the masses  d) Revolutionizing space exploration 32  ELON MUSK  is a South African-born entrepreneur known for his ventures in the electric vehicle industry, space exploration, and renewable energy.  He co-founded Tesla Motors, an electric car manufacturer, with the aim of accelerating the world's transition to sustainable transportation.  Musk recognized the need for environmentally friendly vehicles 33 Examples of Entreprene urs 34  Egyptian Entrepreneu rs 35 Bill Gates  Most entrepreneurs cringe at the prospect of contending with unhappy clients, but Bill Gates considers them an asset.  According to Bill Gates,  “Your most unhappy customers are your greatest source of learning.”  If you want your startup to thrive, pay attention to what your unhappy customers are saying. They are your best hope in learning truthfully about the flaws in your products and services, so you can easily rectify them in future. 36  ‫‪A True Story‬‬ ‫وصلت شركة جنرال موتورز األمريأحد زبائنها يقول إن سيارته تعاني من حساسية شديدة من أحد أنواع اآليس‬ ‫كريم‪..‬وتحديدًا بطعم الفانيليا‪..‬وقال في رسالته انه يعرف جيدًا أنه أمر جنوني ولن يلومهم إذا لم يصدقوه‬ ‫ولكن هذه هي الحقيقة وهذا هو ما يحدث معه‪..‬فيوميًا بعد العمل يقوم بالذهاب لشراء األيس كريم‪..‬وإذا‬ ‫اشتري أي نوع غير الفانيليا فإن السيارة تعمل جيدًا أما إذا كان األيس كريم بطعم الفانيليا فإن محرك السيارة‬ ‫‪..‬ال يدور‬ ‫لم تهمل الشركة الرسالة و أرسلت مهندسًا ليفحص شكوي الرجل‪..‬ليصاب المهندس بالذهول عندما اكتشف‬ ‫أن شكوي الرجل صحيحة وحقيقية‪..‬فقام بقيادة السيارة بنفسه وذهب وحده بها لشراء األيس كريم‪.‬ليحصل‬ ‫علي نفس النتيجة‪..‬بطعم الفانيليا ال تدور السيارة‪..‬بأي طعم آخر تدور السيارة وال اشكال‪..‬‬ ‫ولكن كانت المالحظة التي وضعها المهندس هي أن شراء أيس كريم الفانيليا ( والذي يتوفر كثيرًا للطلب‬ ‫المرتفع وعبواته جاهزة) ال يستغرق وقتًا في الشراء‪..‬بينما أي طعم آخر غير جاهز فيستغرق وقتًا أطول‪..‬‬ ‫وبالتالي كان السؤال المنطقي الذي طرحه المهندس هو لماذا يمتنع المحرك عن العمل عند إعادة تشغيله بعد‬ ‫مدة قصيرة (الفانيليا) بينما يعمل بشكل طبيعي بعد التوقف لفترة أطول (أي طعم آخر) لتقوم الشركة‬ ‫ببحث طويل وتكتشف ظاهرة تحدث للبنزين تسمي وفيها يتحول بعض البنزين من سائل إلي )‪(vapor lock‬‬ ‫غاز فيمنع تدفق البنزين داخل المحرك‪..‬وعندما ُيترك المحرك فترة أطول ليبرد تنتهي تلك الظاهرة‪..‬‬ ‫لألحداث تختلف عندما تمتلك علمًا ُيمّكنك من تحليل األمور والوصول إلي حلول تطور من ذاتك‪..‬بينما ال‬‫‪37‬‬ ‫"رؤيتك‬ ‫‪"..‬يمنحك الجهل إال الخرافة‬ 38 THINKING ACTIVITY 7- What are the Key Characteristics of Entrepreneurs? 39 The key characteristics of Entrepreneurs: A- Passion for your business concept  It is that passion that helps to pinpoint business opportunities where others can’t see.  The competition never scares them; It only serves to drive them to do better. 40 B- Innovation, Innovation, Innovation  They are always looking for innovation and reinventing themselves.  Flexibility to accept and adapt to change for the growth of their business. 41 C-Persistence to turn their business into reality  There is a difference between thinking about a business idea and pursuing a business idea and making it work, those with perseverance native follow ideas and realize their dreams.  Persistent, but not headstrong to fail to acknowledge when new methods can outperform existing ones.  They have entrepreneurial spirit. 42 D- Resourceful  A key success for any entrepreneur is to maximize the resources they have at hand.  Create a network of people that they trust.  Time management.  The ability to find out what works before scaling it up by launching a minimum viable product/service is a major trait of any successful entrepreneur. 43 Xplode, is an Egyptian brand of rice crackers, by great foods, that has lived in the market for only 1 year. The product was introduced with 6 flavors all at once with a media plan of 3 million spending on TV ads. 44  E- Comfortable taking risk  These risks must be well- calculated, weighing up the potential benefits of taking such risk.  And not too proud to ask for specialist financial & legal advise when they need it most. 45 Thinking Activity 8- What are the advantages & Disadvantages of Entrepreneurs? 46 47 48 To summarize: 1. Requirements for the success in business. 2. Business, goods and services. 3. The purpose and function of the business. 4. Revenues, Profits, and Losses. 5. Generating Revenues & Financial sustainability 6. The difference between goods & services. 7. Entrepreneur and his key characteristics. 8. Advantages and disadvantages of Entrepreneur. 49 Activity 5 Role play of Entrepreneur  A role-play scenario for a student who wants to discuss a business idea with his/ her parents:  Role-play: Student Pitching a Business Idea to Parent  Characters: Student (S)  Parent (P) 50 9- Value Proposition  A value proposition is a statement or promise that communicates the unique value and benefits a product, service, or business offers to its target audience.  It defines why customers should choose a particular product or service over alternatives available in the market. 51 52 Restaurant Value Proposition  Restaurant Value Proposition: "Our restaurant offers a diverse menu of delicious, freshly prepared dishes made from locally sourced ingredients.  We provide a warm and inviting atmosphere, friendly service, and a commitment to delivering an exceptional dining experience. Our focus on quality, taste, and customer satisfaction sets us apart, ensuring that every visit is a memorable one for our guests." 53 10- Matching Risk with Profit  Risk — The chance an entrepreneur takes of losing time and money on a business that may not prove profitable.  Businesses take risks, but with big risks could come big profits. 54 Women at work As one woman put it in a recent article, “Today, women have choices that their grandmothers could not have imagined. The challenge lies in recognizing that having choices carries the responsibility to make them wisely.” For many, that choice is entrepreneurship. 55  Businesses improve the economic system through 11- CREATING: Standard A HIGHER STANDARD OF of Living LIVING & & Quality of life A BETTER QUALITY OF LIFE for everyone. 56 Standard of Living  It is The amount of goods and services people can buy with the money they have.  The United States has one of the highest standards of living in the world as compared to Germany & Japan.  Workers in other countries may make more money, but prices for products are higher.  It is the general well-being of a society in terms of its political freedom, natural environment, education, health care, safety and amount of leisure that add to the satisfaction and joy that other goods and services Quality of provide. Life High quality of life requires combined efforts of businesses, nonprofits, and government agencies.  Stakeholders —All the people 12- who stand to gain or lose by the policies and activities of a Responding business. to the Various They can affect or be affected by the organization's actions, Business objectives and policies. Stakeholder s A primary challenge is to recognize and respond to the needs of stakeholders. A Business and Its Stakeholders A typical business 60 Internal Stakeholders  Stockholders  Employees o Managers o Senior Executives o Board members External Stakeholders All other individuals and groups with some claim on the company such as:  Customers and suppliers  Creditors  Governments  Unions  Local communities Will be to recognize and respond to the needs of their stakeholders. For example; A primary  The need for the business to make profits may be challenge balanced against the needs of employees to earn sufficient income or the need to protect the for environment. organizatio  Ignoring the media, may lead them to attack your business with articles that hurt sales. ns of the 21st  Oppose the local community, and it may stop you from expanding. century 63  13- Using Business Principles in Nonprofit Organizations  Nonprofit organization — An organization whose goals doesn’t include making a personal profit for its owners or organizers.  They use financial gains to meet social or educational goals.  They usually rely on the donations from others to keep operating. Such as government agencies, public schools, & charities,—make a major contribution to the welfare of society. 14- Staying competitive, may call for OUTSOURCING  Outsourcing —an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally; such as accounting, production,.. 15- The Five Factors of Production  Have you ever wondered why some countries are relatively wealthy and others poor? Economists have been studying the issue of wealth creation for many years. They began by identifying five factors of production that seemed to contribute to wealth. 66 Land (or natural resources). They are used to make homes, cars, and other products. Labor (workers). People have always been an important resource in producing goods and services, but many people are now being replaced by technology. Capital. (This includes machines, tools, buildings, or whatever else is used in the production of goods. It may not include money; money is used to buy factors of production but is not always considered a factor by itself.) Entrepreneurship. All the resources in the world have little value unless entrepreneurs are willing to take the risk of starting businesses to use those resources. Knowledge. Information technology has revolutionized business, making it possible to quickly determine wants and needs and to respond with desired goods and services. 67 16-The Business Environment It consists of the surrounding factors that either help or hinder the development of businesses. A. Economic and legal environment B. Technological environment C. Competitive environment D. Social environment E. Global business environment LO 1-2 Today’s Dynamic Business Environment Jump to long description in appendix LO 1-2 A-The Economic and Legal Environment  People are willing to risk starting new businesses if they believe the risk of losing their money is acceptable.  The economic system and the way government works with or against businesses 70 can have a strong impact  The Economic and Legal Environment Some ways for government to actively promote entrepreneurship 1. Allowing private ownership of businesses. In some countries, the government owns most businesses, and there is little incentive for people to work hard or create profit. 2. Minimizing interference with the free exchange of goods and services. 3. Passing laws that enable businesspeople to write enforceable contracts & Warranties. 4. Establishing a currency that’s tradable in world markets 5. Minimizing corruption What type of economy does Egypt have? LO 1-3 72 73 74  Activity 6 8- sources of start- up financing https://www.bdc.ca/en/ articles-tools/start-buy- business/start-business/ start-up-financing-sources 75  2- The Technological Environment Technology — Everything from phones to computers, robots, Internet, social media & the various software programs that make business processes more effective, efficient, and productive. How Technology Benefits Workers and You Effectiveness — Producing the desired result. Efficiency — Producing goods and services using the least amount of resources. Productivity — The amount of output you generate given the amount of input (e.g., hours worked). E-commerce — The buying and selling of goods over the Internet. LO 1-4 77  Using Technology to Be Responsive to Customers Database — An electronic storage file for information. Businesses use bar codes to identify the products we buy, its size, quantity & color. Data base enable stores to carry only the merchandise that their local customers want. Identity theft — The obtaining of individuals’ personal information, such as Social Security and credit card numbers, for illegal purposes. LO 1-4  3- The Competitive Environment Customers want good quality products at low prices with great customer service. A- Competing by exceeding customer expectations B- Competing by Restructuring & Empowerment LO 1-5  A- Competing by exceeding customer expectations Successful companies must LISTEN TO CUSTOMERS to determine their wants and needs and then adjust their products, policies, and practices to meet these demands. They must Exceed customer expectations.  B- Competing by Restructuring & Empowerment Since, business is more Customer-Driven, some managers give frontline employees more decision-making power. Empowerment — Giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests.  4- The Social Environment Demography is the statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income. Population shifts are leading to new opportunities for some firms & to declining opportunities for others. Managing Diversity A. Today diversity includes older adults, people with disabilities, married people, singles, & so on. B. The number of legal and illegal IMMIGRANTS has had a dramatic impact on cities and businesses. LO 1-6 Critical thinking What are the new social trends, opportunities for businesses now in our community? The Social Environment The Increase in the Number of Older Citizens People aged 65 to 74 are currently the richest demographic group. Different types of products and services for this group. The Increase in the Number of Single-Parent Families Growth of single-parent households has encouraged businesses to implement programs such as family leave and flextime. LO 1-6 Single-Parent Families More and more working families consist of single parents who must handle the demands of a job and the responsibilities of raising children. What can managers do to try to retain valued employees who face such challenges? LO 1-6 © Julie Toy/Photographer’s Choice/Getty Images  5- The Global Environment Globalization has grown due to many factors most important are communication systems such as the Internet. How Global Changes Affect You As businesses expand to serve global markets, new jobs will be created. Rapid changes create a need for continuous learning. The Ecological Environment Climate change — The movement of the temperature of the planet up or down over time. Greening — The trend toward saving energy and producing products that cause less harm to the environment. LO 1-7  17- Sustainability 87 SUSTAINABILI TY  Sustainability can be defined as the processes and actions through which humankind avoids the depletion of natural resources and trying to keep an ecological balance so that society’s quality of life doesn’t decrease.  Reducing carbon emissions, maintaining clean water  Using renewable sources of energy such as:  Solar energy, wind energy, hydro energy. 88 What a Great Sustainability Idea!!  A Japanese Company produced pencils that ends with a seed.  When the child finishes the pencil; he plants the seed to have a tree.  This is kind of a gift and to compensate the nature for the trees being cut to make these pencils 89 90  1- Green Buildings and Energy Efficiency: sustainable building practices and designing facilities that are energy-efficient. This includes incorporating renewable energy sources, optimizing lighting & utilizing sustainable materials in construction. Sustainabil E.g. solar panels, use energy-efficient lighting. ity in 2- Waste Management and Recycling: HI generate significant amounts of waste, Business including hazardous materials. To promote sustainability, many healthcare facilities have implemented waste management programs that focus on proper waste segregation, recycling, and responsible disposal of hazardous materials. 91 3- Water Conservation: such as low-flow faucets and toilets, and adopting strategies to reduce water consumption. 4- Sustainable Procurement: energy-efficient equipment, environmentally friendly cleaning supplies, and sustainable food options 5- Green Transportation: Institutions are exploring sustainable transportation options to reduce their carbon emissions. This includes promoting alternative transportation methods for staff, patients, and visitors, such as cycling, carpooling, and public transportation. Some institutions also provide electric vehicle charging stations 92 Kahoot On-line Game QUESTION S 94 THANK YOU 95