Business

Intro to Business

Stakeholders- are all the people who stand to gain or lose by the policies and activities of a business. Stakeholders include customers, employees, stockholders, supplies, dealers, bankers, and people in the surrounding community.

Nonprofit Organization- is an organization whose goals do not include making a personal profit for its owners or organizers.

Factors (5) of Production- 1. Land- land and other natural resources are used to make homes, cars and other products. 2. Labor- people have always been an important resource in producing goods and services, but many people are now being replaced by technology. 3. Capital- capital includes machines, tools, buildings, and other means of manufacturing. 4. 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. 5. Knowledge- Information technology has revolutionized business, making it possible to quickly determine wants and needs and to respond with desired goods and services.

Macroeconomics- looks at the operation of a nation's economy as a whole.

Microeconomics- looks at the behavior of people and organizations in particular markets.

Competition levels (4) in free markets- Perfect: exist when there are many sellers in a market and no seller is large enough to dictate the price of a product. Monopolistic: exist when a large number of sellers produce products that are very similar but are perceived by buyers as different. Oligopoly: is a form of competition in which just a few sellers dominate a market. Monopoly: occurs when there is only one seller for a product or service.

Mixed Economics- exist where some allocation of resources is made by the market and some by the government.

Gross Domestic Product (GDP)- is the total value of final goods and services produced in a company in a given year.

Price Indexes (Consumer and Product)- Consumer- consists of monthly statistics that measure the place of inflation or deflation. Product- measures prices at the wholesale level.

Types (4) of unemployment:

Frictional unemployment- refers to those people who have quit work because they didn't like the job, the boss or the working conditions and who haven't yet found a new job.

Structural unemployment- refers to unemployment caused by the restructuring of firms or by a mismatch between the skills (or location) of job seekers and the requirements (or location) of available jobs.

Cyclical unemployment- occurs because of a recession or a similar downturn in the business cycle (the ups and downs of business growth and decline over time). This type of unemployment is the most serious.

Seasonal unemployment- occurs when demand for labor varies over the year, as with the harvesting of corps.

Comparative Advantage Theory- states that a country should sell to other countries those products that it reduces most effectively and efficiently, and buy from other countries those products it cannot produce as effectively or efficiently.

Balance Trade- is the total value of a nation's exports compared to its imports measured over a particular period.

Strategies (4) for Reaching Global Markets-

Licensing- the right to manufacture its product or use its trademark to a foreign company (the licensee) for a fee (a royalty). A licensing agreement can be beneficial to a firm in several different ways.

Exporting- As global competition intensified, the U.S. Department of Commerce created Export Assistance Centers (EACs): EACs provide hands-on exporting assistance and trade-finance support for small and medium-sized businesses that wish to directly export goods and services.

Franchising- is an arrangement whereby someone with a good idea for business sells the rights to use the business name and sell a product or service to others in a given territory in a specified manner.

Contract Manufacturing- involves a foreign company producing private-label goods to which a domestic company then attached its own brand name or trademark.

International Joint Ventures and Strategic Alliances- A joint venture is basically a partnership in which two or more companies (often from different countries) join to undertake a major project. Joint ventures are often mandated by government such as Chine as condition of doing business in their country. A strategic alliance is a long-term partnership between tow or more companies established to help each company build competitive market alliances.

Foreign Direct Investment- is buying of permanent property and businesses in foreign nations. The most common form of foreign direct investment is a foreign subsidiary. A foreign subsidiary is a company (called the parent company).

Exchange rate- is the value of one nation's currency relative to the currencies of other countries.

Tariff- is basically taxes on imports, thus making imported goods more expensive to buy.

Import Quota- limits the number of products in certain categories that a nation can import.

Embargo- is a complete ban on the import