Chapter 1: Business Now Change is the Only Constant.

Chapter 1: Business Now

Change is the Only Constant

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


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


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


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


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


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


Business Encourages Entrepreneurial Spirit


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


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


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


LO5 The Business Environment: The Context for Business


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


Economic Vulnerabilities

– CEO/Worker pay gap– Corruption and ethical

lapses– Consumer debt– Federal/provincial debt


Competitive Environment

– Today’s competition is intense

– Companies must focus on loyal customers because they are the vocal promoters of their products/services



– 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

17Copyright © 2014 by Nelson Education Limited 17Copyright © 2011 by Nelson Education Limited


– 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


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


– 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


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


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


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


Social Environment

– Diversity

– Aging population

– Rising worker expectations

– Ethics and social responsibility

– Diversity

– Aging population

– Rising worker expectations

– Ethics and social responsibility


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


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


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


LO6 Business and You:Making it Personal

– What are your passions?

– What are business careers that encompass your passions?


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?


Looking Back

– What are the core factors of production?– What are the elements of the environment

affecting business?– How are business trends impacting

careers?

Chapter 1: Business Now Change is the Only Constant.

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Transcript of Chapter 1: Business Now Change is the Only Constant.