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COMM 103 (179)
Chapter 1&4

Chapter 1 & 4 notes.docx

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Department
Commerce
Course
COMM 103
Professor
Gary Bisonnette
Semester
Fall

Description
Chapter 1 – What is Business? The Big Pic • 3 characteristics used to assess efficient and effective operating platform o Commercial endeavours  Markets which org. serves  goods and services it offers  needs it professes to meet in the marketplace  requires understanding of S&D, price/cost, deliver to have profitable outcome o employee interaction  value-creating skills employees bring  used in prod’n, allows business to create value and enables transactions to allow firm to make profit o organizational efficiency and structure  Reflection of complexities of business activities which circulate within org.  Development of infrastructure and transaction processes o E.g. Google  Many market offerings (Android, Youtube, etc.)  Developers, engineers, etc. to develop goods and services  Server farms, managerial hierarchy, and operating, decision- making and communication processes What is Business? • Business: mission-focused activities aimed at identifying needs of particular markets and development of a solution through acquisition and/or transformation of goods and services that can be delivered to marketplace for profit • Assets, labour, capital and managerial acumen to find most efficient and effective approach to marketplace • Business model system (company’s cost base and overall operating platform) o Assets: infrastructure and resource base of an org. e.g. land, buildings, raw materials, brand power, equipment, etc. o Labour: HR requirements o Capital: $ needed to support asset-based expenditures, operating cash requirements and invest in development of new products and/or services o Managerial acumen: foresight, drive, knowledge, ability, decision-making, competency and ingenuity of org.’s key individuals  Visionary leadership is key b/c managers establish direction for org. based on market needs • Competitive advantage: company offers goods and services that has more value to customers than similar goods and services by the other companies • Role of business owner and/or mgmt. team is to anticipate, recognize and sense opportunity to create a goods and services to deliver a service which is felt to be unique, important and of value to targeted customers • Market opportunity realized via the application of productive resources (assets, labour, capital) • Conduct a strategy & 3C assessment (capabilities, competencies, capacity) o Strategy: specific objectives which an organization hopes to achieve during the planning cycle o 3C assessment: analyzing resources available to the organization and the capabilities and competencies which it possesses  Defines the capacity of what the organization can or cannot do and defines what extent it can capitalize on its identified strategic opportunities which is superior to the competition • Failure to meet objectives of a planning cycle can be the result of poor positioning and/or operational execution • Business grows by executing series of planning cycles over time • Planning cycles o Direct positioning of company within the marketplace o orchestrate creation of business plan o Ensure linkage w/ vision and mission of org. o Develop required operational tactics to ensure plan executed o  growth and profitability • 3 fundamental objectives of business managers o Short-term profit o Long-term growth and profitability o Social and environmental responsibility • Too much emphasis on short-term profitability may result in decisions which are detrimental to long-term market opportunities and fall short of social responsibility expectations • Most common way of comparing how well a specific company is performing is by measuring profitability over a period of time and compare w/ industry competitors • Profits: bottom line results an organization has realized for a given period of time o Total rev – total expenses = profits • Profitability: efficiency and effectiveness of an organization to use its assets and capital to generate profits over a period of time o E.g. Bay tried to improve profitability by positioning the company as more of a high-end retailer • Value proposition: statement which summarizes whom a product/service is geared towards and the benefits the purchaser will realize from using the product and difference from competitors o value proposition = service benefits + product benefits + brand benefits + cost benefits + emotional benefits The Impact of Price/Value Proposition • buyer looking for a purchase which results in the benefits being obtained from the product > price paid • the more unique, important and value-driven your product is, the greater the opportunity to communicate a value proposition which has positive price/quality relationship and superior to competitors • not always about having lowest price, but understanding needs and wants of market and different segments within market • key is to recognize qualities of the product/service you’re offering and match to segment of market which will respond and deliver value proposition superior to competitor’s • 5 fundamental questions to form value proposition o What is my cost base? o Brand profile? o Emotional benefits? o Service benefits? o Can I create a strong enough value proposition which will enable me to successfully compete against other competitors in the market segment? Understanding Your Cost Base • A key component of managing any business is in understanding expenses which must be considered when setting the price of a goods and services offering • Asset-based expenditures: from starting a business operation/expanding capacity • Operating expenditures: result of normal business operations o E.g. wages, purchase of raw materials, ads, etc. Business Decision-Making Model • Visualize and assess business opportunities  confirm market size and profitability potential  determine market position, approach and continuity  assess company resources and capabilities  determine tactics required to achieve objectives • Strategy: development of plans and decisions to guide direction of the firm and determine its long-term performance • Tactics: immediate actions which a firm executes to meet short-term objectives in current planning cycle Interdependency of Strategy and Tactics • Well-directed and positioned strategy + efficient and effective tactics execution = business growth and profitability Chapter 4 – The Environment and Sustainable Business Practices • Societal response to environmental degradation o Unabated consumption  regulatory compliance legislation/standards  eco-management initiatives  full integration of business strategies and environmental responsibilities • Goal to design business processes in a way which, while allowing for increased wealth and enhanced competitive advantage, incorporate principles of humankind and resource protection and sustainability for the future • 5 critical sustainability challenges o Climate change o Pollution and health o Energy crunch o Resource depletion o Capital squeeze • How to build reduced-carbon economy o Improving energy efficiency o Decarbonizing energy supply o Transportation innovation o Biodiversity o Human behaviour modification • Top 6 toxic threats o Lead o
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