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.
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
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