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Chapter 1

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Queen's University
COMM 200
Gary J Bissonette

COMM200 Week 2 Readings Chapter 1 The Big Picture - Business (broadest context): system of integrated actions, designed to ensure an organization develops and grows a market for its goods and/or services in a manner which creates organizational value (wealth) on behalf of its stakeholders o Accomplished by:  Successfully identifying solutions to marketplace needs  Creating mechanism for delivering solutions to right customer, place, time for right price o Three fundamental characteristics to assess whether efficient/effective operating platform:  Commercial Endeavours: markets the organization serves; products and services it offers; needs it professes to meet in the marketplace • Reflects understanding of marketplace demand/supply relationships + capacity and capabilities of each of the competitors to deliver products/services in the market • ^ relationships + understanding price/cost requirements needed to produce goods and services enables creation of a business system which delivers a profitable outcome to the organization  Employee Interaction: value-creating skills an organization’s employees bring • Leveraging of these skills in the production/delivery of goods/services enables a business to create value and enables transactions to occur which allow the firm to make a profit  Organizational Efficiency and Structure: reflection of complexities of business activities which circulate within an organization • Reflective of development of infrastructure and its related culture an organization creates + transaction processes developed in order to service marketplace o These three characteristics assessed jointly -> allow an understanding of a business system whose end result is the design, production, distribution and communication of goods and services What is a business? - Business: mission-focused activities aimed at identifying the needs of a particular market or markets, and the development of a solution to such needs through the acquisition and/or transformation of goods and services that can be delivered to the marketplace at a profit o Four core fundamental resource areas [for efficient/effective management of activities]:  Assets: infrastructure and resource base of the organization • e.g. land, buildings, process & infrastructure base, equipment and/or technology framework, raw materials, brand power  Labour: human resource requirements of the business  Capital: money needed to support asset-based expenditures, meet operating cash requirements, and invest in the development of new products and/or services the organization desires to introduce  Managerial Acumen: foresight, drive, knowledge, ability, decision making competency, and ingenuity of the organization’s key individuals [owners or top- level managers] • Visionary leadership: ability of managers to establish a direction for the organization on needs identified and company mission -> strategic plan o Assets + Labour + Capital + ManagerialAcumen = Business model composition - Role of business owner/management team = anticipate and recognize opportunity to create unique and important product and services o 1) How? Strategy & 3C (capabilities, competencies, capacity) assessment  Strategy: specific objectives an organization hopes to achieve during the planning cycle  3CAssessment: analyzing resources available and capabilities and competences it possesses – helps define how it can capitalize on identified strategic opportunities o 2) Through the S3C process, the team develops a business plan via a process called The Business Planning Cycle (BPC)  BPC outlines focus + methodology for using its resources to create valuable products and services to create a unique position in the marketplace • Unique position built around a competitive advantage o 3) Business plan execution o 4) Company Performance and Profitability o 5) Company Growth and Reinvestment Business Planning Cycling Stage - 1) Direction/Positioning o Businesses need to identify and set objectives which will enable them to achieve a defined position in the marketplace and detail an implementation strategy which will enable them to achieve the desired position o Objectives need to be SMAC:  Specific  Measurable  Actionable  Controllable - 2) Implementation o Allocate resources + leverage company’s capabilities to produce desired results - 3)Assessment o Assess success of company in achieving desired objectives and determine adjustments required to further grow company within upcoming planning cycles - Failure to meet the objectives of a planning cycle can be the result of poor positioning, poor operational execution, or a combination of the two Not only for-profit companies - Not-for-profit organizations also need a business plan, operating model, and business system that will enable them to cover their operating costs and employ strategies to fund the ongoing delivery of meaningful services The Fundamental Objectives of Business - Three objectives: - 1) Short-Term Profit o Necessary in immediate term – pay bills and reinvest in the future - 2) Long-term growth and profitability o Businesses are constantly searching for new markets and new opportunities to further grow the scope and focus of their organizations o New products and services will need to be developed in order to ensure the organization remains healthy and continues to grow - 3) Ethics, social responsibility, and environmental sustainability o Green initiatives, truth in advertising, environmentally-sustainable resource practices, and other environmental and social codes of conduct are challenging businesses to position themselves as good corporate citizens in order to acquire and retain customers - Same fundamentals hold true for the not-for-profit sector as well o NFP ROLES  Need to create operational surpluses and/or acquire ext
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