MGTA01H3 Lecture Notes - Canadian Business, Kodak, Lemonade Stand

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Published on 15 Apr 2013
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MGTA03 Intro to Management
- Read Chapter 1 Understanding the Canadian Business System to Page 10
Main Points of Today’s Lecture
- Definition of “Business”
- Profit and Loss
- Factors of Production
- Economic Systems
Business Defined
- An organized effort
- To make or sell something
- To sell to customers/patrons/clients
- Who need or want something
- In order to make a profit
o Ex. Pizza shop, Rogers (People need telephone services, internet services & etc),
Lemonade stand
Business: Characteristics
- Pizza store This business exists because people may be hungry
- Lemonade Stand This business exists because people may be thirsty
- Customers need and want things and they will pay for them
Business: Definitions
- The money that comes in are called Revenue or Sales (These two words mean the same thing)
Business: Characteristics
- Customers pay, get something in return. The business must provide a pizza
Profit (Definition)
- The difference between
o $$$ in (revenues or sales)
o $$$ out (Costs or expenses)
Profit: Simple Example
- Business sells small, plain pizza
o Revenue (sales) = $6.00
o Less Expenses (costs) = -$5.00
o Profit = $1.00
Profit
- Fundamental reason for a business to exist
- Not all organizations are businesses Ex. Hospitals, universities, churches
o Hospitals An organized effort , has customers
o Universities An organized effort? Mostly
Not a business: UofT does give out scholarships; therefore not making profit.
Our university tuition only pays 30% of our actual cost to be in school
o Churches An organized effort, you don’t have to give them money. They let your
conscience decide
Profit versus Loss
- Loss; When expenses more than sales
o Ex. It costs more to produce the products, and run the business, than the business can
generate through sales
Ex. Blockbuster, Hostess (Manufacture of Twinkies), Kodak (Film), GM (General
Motors); GM lost so much money because they had useless car companies
(Hummer); They weren’t fuel effiecnts; They paid different people to do the
same thing; Paid people in USA instead of China, Indonesia and etc. ; There
products cost a lot; When sales went down, there prices were fixed
Loss- Making Businesses
- Examples of Loss- Making Businesses:
o General Motors (2008) Loss of $31 bn
o Chrysler ( 2008) Loss of $6 bn
o Phoenix Coyotes People that live in the desert, don’t understand hockey. They have a
small fan base

Document Summary

Read chapter 1 understanding the canadian business system to page 10. In order to make a profit: ex. Pizza shop, rogers (people need telephone services, internet services & etc), Pizza store this business exists because people may be hungry. Lemonade stand this business exists because people may be thirsty. Customers need and want things and they will pay for them. The money that comes in are called revenue or sales (these two words mean the same thing) The difference between: 22723$ in (revenues or sales, 22723$ out (costs or expenses) Business sells small, plain pizza: revenue (sales) = . 00, less expenses (costs) = -. 00, profit = . 00. Not all organizations are businesses ex. Not a business: uoft does give out scholarships; therefore not making profit. Our university tuition only pays 30% of our actual cost to be in school: churches an organized effort, you don"t have to give them money. Loss; when expenses more than sales: ex.