Chapter 1 02/06/2014
Objectives of Business
Business principles are used in for profit, non profit, not for profit and government agencies. Oftentimes,
goals are other than making a profit for their owners or organizers.
Risk Reward Trade offs
Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove
Market (Business to consumer/B2C)
Products that are purchased for personal use
Product is purchased for resale or for use in the manufacture of other products or for daily operations
What makes countries rich today is a combination of entrepreneurship and the effective use of knowledge.
Clean air, water and good health care, quality of life and low rates of crime can make a business better
Technology affects productivity which is the amount of output you generate given the amount of input. It
also affects effectiveness which means producing the desired result while efficiency means producing
goods and services using the least amount of resources.
Social Media Marketing
There are two dimensions to social media marketing
Consumer generated online marketing efforts to promote brands and companies for which they are fans
and non fans. Marketers use of online tools and platforms, networking sites such as Facebook, Linked in, Twitter, blogs,
wikis, and podcasts.
The Legal and Regulatory Environment
Governments can do a lot to lessen the risk of starting and running a business through laws
Freedom of ownership
Elimination of corruption
People are willing to start new businesses if they believe that the risk of losing their money isn’t too great.
Part of that decision is affected by governments work with businesses.
The Economic Environment
One looks at income, expenditures, and resources that affect the costs of running a business. Businesses
review the results of major economic indicators such as consumer spending, employment levels and
As population growth slows, costs rise and available resources tighten, firms find that they must work
harder to maintain their profits and market share, regardless of the form of the competitive market.
Michael Porter developed this business model to analyze industries and competitors.
Five competitive forces shape every s