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Lecture 1

MGTA01H3 Lecture Notes - Lecture 1: Profit Motive


Department
Management
Course Code
MGTA01H3
Professor
Bill Mc Conkey
Lecture
1

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Business
Refers to human organization
Businesses need to make a profit or else they will face losses
Strategies to increase profit
o Branding
o Advertising
o Better, quality products
o Sell products at a lower cost than competitors, selling more products/units as a result
However, this does not work on some products such as jewellry
o Differentiation method: Method to increase profit by making products different from
competitors and charge more for them
As products change, prices and demand change as well
Need to be aware of costs of product in relation to its revenue
o Another competitor may beat out the original
The Profit Motive
“oe people like Ada “ith supported the profit otie hile others like Karl Mar did’t
Karl Marx
o Said that the means of creating should be in the hands of everyone
o Risk and Return
Idea that businesses can and do make losses
o No ecoo that is a pure Mar’s sste; soe ecooies ith o profit otie hile
other economies do
Rather than greed, profit is seen as healthy
o Drive and motive pushes us to be responsible with our resources, be creative,
communicate with the market
No guarantee that ou’re goig to ake a profit
Risk
Defined as the uncertainty of an outcome
Two dimensions
o Probability of the risk happening
o What the outcome is should the risk happen
After, should consider how to manage the risk
Supply and demand
o Demand is related to revenue
o Supply is related to costs and expenses required to run the business
find more resources at oneclass.com
find more resources at oneclass.com
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