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2Copyright © 2014 by Nelson Education Limited
Looking Ahead
LO1 Define business and discuss the role of business in the economy
LO2 Explain the evolution of modern business
LO3 Discuss the role of not-for-profit organizations in the economy
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LO4 Outline the core factors of production and how they influence the economy
LO5 Describe today’s business environment and discuss each key dimension
LO6 Explain how current business trends might influence your career choices
Looking Ahead
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LO1 Business Now:Moving at Breakneck Speed
– In the last decade, the players, what consumers want, and how we buy has changed
– Companies are being launched and growing faster than ever
– Mature firms are being merged, acquired, and dissolved
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Business – any activity that provides goods and services in an effort to
earn profit
Not-for-profit organizations –
focus on causes not profit
Business Basics
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Profit – the financial reward that comes from starting and
running a business; the money that a business earns in sales (or revenue), minus
expenses
Business Basics
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Business Basics
Entrepreneurs – people who risk time,
money, and other resources to start and manage a business Business drives up the
Standard of Living,which, in turn, contributesto the Quality of Life
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LO2 The History of Business:Putting It All In Context
Relationship Era
Marketing Era
1950s
Production Era
Early 1900s
Entrepreneurship Era
Second half of 1800s
Industrial Revolution
1700-mid 1800s
Mass Production
Factories
Work Specialization
Efficiency
Industrial Titans
Wealth Creation
Increase in Living Standard
Manipulation/Competition
Exploitation
Assembly Line
Refining Production
Productivity Gains
Decrease Costs
Hard Sell
No Customer Focus
Consumer Power
Growth in Consumerism
Product Differentiation
Customer Focus
Long-term Relationships
Satisfied Customers
Use of Technology
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LO3 Not-For-Profit Organizations and the Economy: The Business
of Doing Good– Not-for-profit organizations focus on health,
human services, education, art, religion, and culture
– Canada’s 161 000 non-profits contribute more than $80 billion to the economy
– While focused on “doing good” rather than financial gain, non-profits are businesses in every other sense: they employ people, take in revenue, and produce goods and services
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LO4 Factors of Production: The Building Blocks
– Businesses rely on some combination of these factors
– Entrepreneurial activity can kick-start an economy by harnessing the other factors of production
Natural Resources
Capital
Human Resources
Entrepreneurship
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LO5 The Business Environment: The Context for Business
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Government takes an active role to support businesses:
–Economic development is supported by Industry Canada
–Provinces promote economic development by providing investment and tax incentives
–Legislation supports enforceable contracts
Economic Environment
Free enterprise and fair competition flourish in Canada
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Economic Vulnerabilities
– CEO/Worker pay gap– Corruption and ethical
lapses– Consumer debt– Federal/provincial debt
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Competitive Environment
– Today’s competition is intense
– Companies must focus on loyal customers because they are the vocal promoters of their products/services
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Competitive Environment
– Companies must provide unsurpassed value
• Value is the size gap between benefit and price
• The cheapest product does not mean value
• The key to value is quality
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Competitive Environment
– How fast firms get products to market can be a competitive advantage• Bleeding edge firms launch products that fail
because they are ahead of the market• Leading edge firms offer products just as the
market is ready
Apple computers was not first to the MP3 market but they now own 75% market share
Employees are another key competitive
advantage
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Competitive Principles
– Avoid your competitors’ strengths and exploit their weaknesses; don’t try and beat them at their game
– Always be a little paranoid; never underestimate your competition
– Competitors will usually get better when pushed
– Competitors are sometimes irrational when pushed
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– Top 10 global brands all U.S.-based
– Japan, Germany, Finland, S. Korea, and France-based brands all included among the next 10 best
Insert exhibit 1.3, p. 8, C2e
Competition is Changing
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Inventions with Impact(Can you identify four Canadian inventions?)
Laptop
Blackberry
Viagra
Camcorder
Cat litter
Poutine
Insulin
Bikinis
Disposable diapers Zippers
Kool-Aid Astroturf
Great Inventions that have
impacted human life….for better or
for worse
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Technological Environment
– Business technology includes any tools that businesses can use to become efficient and effective• Source of competitive advantage• Industries have experienced dramatic change• New industries have emerged
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Technological Environment
– Technology continues to evolve at breakneck speed; the change in everyday life and business operations is almost unimaginable
– Companies that welcome change and manage it well will clearly be the winners
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Social Environment
– Diversity
– Aging population
– Rising worker expectations
– Ethics and social responsibility
– Diversity
– Aging population
– Rising worker expectations
– Ethics and social responsibility
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Shades of Green: The Six Sins of Greenwashing
Sin of hidden trade-off
Sin of no proof
Sin of vagueness
Sin of irrelevance
Sin of lesser of two evils
Sin of fibbing
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Global Environment
Terrorism is more of a threat today
Job Migration
China and India’s economies are
growing
TechnologyFree Trade
Natural Disasters
Blurred lines between countries/world
Technology is linking customers/suppliers
worldwide
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Global Environment
– Both China and India have been growing relatively fast due to foreign investment and internal development
– China has been a magnet for manufacturing jobs and India for high tech jobs
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LO6 Business and You:Making it Personal
– What are your passions?
– What are business careers that encompass your passions?
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Looking Back
– What is the role of business in the economy?
– How has business evolved?– What is the role of non-profits in the
economy?