COMMERCE 1E03 Lecture Notes - Lecture 2: Retail, Offshoring, Insourcing
3 May 2018
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Lecture Day 2
Business fundamentals
• Success in business is finding a need for products (goods, services, and/or ideas) and
filling that need
• A business is any activity that seeks to provide products to others while operating at a
profit
• Since not all businesses make a profit, starting a business can be risky
Business objectives
• Business principles are used in for-profit, non-profit/not-for-profit, and government
agencies where oftentimes, goals are other than making a profit for their owners or
organizers
Risk/reward trade-offs
• People have different tolerances for risk
• Two ways to succeed in business include (1) starting your own company or (2) working
your way to the top within a company
• To decide which is the best choice for you, you have to calculate the risks and the
potential rewards of each decision
Two markets
• Market (Business to Consumer / B2C)
o Products that are purchased for personal use
o Laptops, pens, clothing, food
• Market (Business to Business / B2B)
o product are purchased for resale OR
o for use in the manufacture of other products OR
o for daily operations
o much larger
o transactions between companies
o ex. ford motor company buys tires (B2B)
• A business can sell to both types of markets
o Ford targets both businesses and consumers, sells vans to other companies and
mini-vans to families
Stakeholders
defined as all the people who stand to gain or lose by the policies and activities
of a business
• Customers want value
• Employees want security
• Investors want a strong ROI (return on investment)
• Suppliers want to be paid
• Dealers want support
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