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COMM 103 Chapter Notes.docx

44 Pages

Course Code
COMM 103
Gary J Bissonette

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COMM 103 Chapter Notes Chapter 1: Learning Objectives Base understanding of what business is Exposure to 4 major components of business model and their impact on competitive advantage Understanding of business planning Differences between profit and profitability Importance of creating a well-differentiated value proposition Overview of relationship between strategy and tactics 1. Big Picture Commercial endeavors Interaction with customers Organizational structure and efficiency 2. What is Business a) Assets are the resource base for a company I. land, buildings, process and infrastructure base, equipment, raw goods, brand power b) Labor - human resources c) Capital - assets needed d) Managerial acumen - foresight, drive, knowledge, ability, etc. of managers Key to have Visionary Leadership: establish direction of the company to meet needs of marketplace and company mission E] 4 previous points = Business Model Composition A. Competitive Advantage: product with more value added B. Planning Cycles reposition company in the marketplace year-to-year, month-to-month, etc C. Fundamental Objectives a) Short-Term Profit b) Long-term growth c) Social and Environmental Responsibility 3. Business Model and Profitability -Profit: bottom line (revenue-expenses) -Profitability: efficiency and effectiveness to use assets to generate profit over time 4. Creating a Value Proposition Service benefits Emotional benefits Cost benefits Product benefits Brand benefits 5. Business Decision-Making Landscape Strategy: plans that will guide firm in future Tactics: intermediate actions to meet short term objectives 6. Management Reflection - Focus on Business Chapter 2: CANADIAN ECONOMIC SYSTEM A] Economic System -natural resources, skilled labor force, and high-tech have allowed for prosperity 1. Keys to Success a)Productivity gains b) Strong business investment c) technology innovation d) moderate wage increases e) Favorable Currency exchange rate B] Key Economic Influencers 1. Contributing Factors a) Natural Resources: Canada has a comparative advantage to other countries b) Foreign Direct Investment c) Low Inflation d) Not Corrupt e) Effective Legal System f) Manageable Debt g) Established Factors of Production h) Strong Banking System I) Political Stability 2. Underlying Economic Model a) Supply and Demand -ability of a market to determine a product's price -demand can be elastic(when price does seriously effect demand) ex: TV , or inelastic(when price doesn't contribute to serious change in demand) ex:gas -supply is how much producers are willing to sell at a given price point Law of S/D: the price will be the point where the is equalization (supply and demand curve intersect) b) Allowance for Private Ownership c) Government Involvement -gov. Can be a customer, regulator, manager (bank of Canada), tax agent, economic stimulator, competitor, etc d) Open System: governed by S/D, Controlled System: minimal external trade, Mixed e) Canada has a Mixed System -can regulate through taxation, regulations, debt targets, provincial transfers, and monetary policy control C] The Economy in Simple Terms 1. Productivity is based on four key factors: economic activity= all four combined a) Expenditures -purchases to support day-to-day activity (food, housing, clothing, transportation, etc) b) Savings -dollars set aside to support wealth generation in the future (Roth IRA, RRSP, etc) c) Capital Asset Investments - investments today to further expand productivity and overall capacity (additional truck, factory, etc) d) Credit -borrowing of dollars to support expenditures/investments being made D] Economic Growth Cycle -total value of economy is measured in GDP(total market value of goods/services over a period of time) a) Factors that determine GDP: goods/services produced and sold domestically, investments within economy, goods for export, government spending b) GDP Drivers -consumer spending, natural resource sectors, technology center, energy-production sector c) Growth Cycle 1. GDP Growth increases corporate revenues and tax revenues 2. Increased capacity to invest, leading to further economic growth 3. Increased activity to hire new employees 4. More dollars to spend to continue the growth E] Managing the Movement in the Economy -banks want to maintain equilibrium between growth and inflation -western provinces are growing faster than are eastern and central ones F] Trends that Impact 1. Inflation -negative impact on growth -gas, energy, and food prices are rising because of inflation 2. Geographic Clustering - a number of distinct regional economies develop (interdependency decreases) -western provinces are very distinct from east/central ones 3. Currency Exchange Rate -increased currency value in Canada has positive and negative consequences a) Pos: reduction in prices from imported goods/services b) Neg: tourism is down because it is more expensive -Parity: currencies are for the most part equal (USD and CAD) 4. Branch Market Impact -PPP (Purchasing Power Parity): adjusts total value of economy by factoring in costs of living and inflation) -when you lose control of economic base (firms being bought by overseas firms) 5. Long-Term Competitiveness -will always be competitive in natural resources -future relies on the growth of knowledge-based sectors (education, banking, financial services) 6. Small Business Focus 7. Globalization -inter connectivity of the world -increased opportunities and increased competition G] Managing the Times 1. 3 Fundamental Questions -what area the general indicators (S/D)?
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