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Chapter 1

COMM 103 - Chapter 1 Notes.docx

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Queen's University
COMM 103
Ian James Cromb

Comm 103 – Chapter 1 – What is Business? Business is a system of integrated actions which ensures an organization develops and grows a market for its goods/services, which creates wealth for its stakeholders. Aspects of a Business Foundation 1. Commercial Endeavors: refers to the markets in which the organization serves (and the products/services it offers). A combined understanding of supply/demand & cost/price determines how profitable a company will be. 2. Employee Interaction: refers to value of employees. Leveraging production of goods/delivery of services skills enables value to be created. 3. Organizatonal Efficiency & Structure: reflects complexities of business activities (development of infrastructure, transaction processes which service marketplace) 4 Core Fundamental Resource Areas Assets + Labour + Capital + Managerial Acumen = Business Model Assets: represent the infrastructure and resource base of the organization (buildings, process & infrastructure base i.e. e-commerce, bricks/mortar, raw materials, brand power) Labour: human resource requirements of the business Capital: money needed to support asset-based expenditures, invest in development of new products, meet cash flow requirements, etc. Managerial Acumen: knowledge, ability, foresight, etc. of organization’s key individuals. Significant component of MA is visionary leadership.  Visionary Leadership: ability of managers to establish a direction for the organization based on needs of market and mission of organization. The role of a business owner/management team is recognize opportunities to create a product/deliver a service which is felt to be unique, important, or of value to customer. This is realized via the effective application of assets, labour, and capital. Strategy & 3C Assessment: Capabilities, competencies, capacity. Involves analyzing capabilities, competencies, and resources available. This defines the capacity of what the company can do. Competitive Advantage: when a company can offer customers a product/service that has more value than similar products. Company Company Strategy & 3C Business Plan Business Plan Performance & Growth and Assesment Development Execution Profitability Reinvention - * Cycle * - Designed to: direct positioning within marketplace, create business plan (made to achieve objectives of planning period), ensure plans are consistent with vision/mission, and develop required operational tactics. - Objectives should be SMAC (Specific, Measurable, Actionable, Controllable) - If an organization does not achieve its objectives because of poor positioning and/or poor execution, then they were most likely not profitable and need to change strategy. See Planning Cycle Outcome (pg. 9) Fundamental Objectives of Business 1. Short-Term Profit: needed to pay bills and reinvest in the future. Ensures immediate survival of firm. 2. Long-Term Growth & Profitability: needed to develop new products/services to ensure ongoing profitability and expand into new markets to grow 3. Social & Environmental Responsibility: supports brand image because consumers want to see ethical behaviour from the people they deal with. Includes “green” initiatives, tr
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