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Characteristics of business Ch. 1 – business management Sections 1-1, 1-2

Characteristics of business Ch. 1 – business management Sections 1-1, 1-2. Instructor: Coach Griffin. Objective. Explain the general types and changing nature of businesses Describe how global competition has affected the way American Business Operates. Nature of business. Business

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Characteristics of business Ch. 1 – business management Sections 1-1, 1-2

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  1. Characteristics of businessCh. 1 – business managementSections 1-1, 1-2 Instructor: Coach Griffin

  2. Objective • Explain the general types and changing nature of businesses • Describe how global competition has affected the way American Business Operates

  3. Nature of business • Business • Purpose is to produce or distribute a good or service • Profit • The difference between earned income and costs • Manufacturing Firms (Example: Mecalux – specialization design metals) • Service Firms (Example: Retailer – Express Clothing Store) • Major Activity of Business • Production • Marketing • Finance

  4. Which is it… • Manufacturing or Service Business • Watch repair shop - SERVICE • Hand made Jewelry - MANUFACTURING • Lawnman - SERVICE • Shop that makes minute timers - MANUFACTURING

  5. Types of Businesses • Industrial Business • Produce goods used by other businesses or organizations to make things • Example: Diamond Manufacturing – metals, plastic, and other materials (in Cedar Hill) • Commercial Business • Engaged in marketing , finance, and providing services • Example: Texas Trust Bank (in Cedar Hill)

  6. Impact of Global Competition • Early 1800’s – 1900’s • Immigrants came to America seeking a better life, abandoning poverty, wars, and religious persecution • American Leader • Led the way in producing new goods and services for sale around the world. Workers from around the world came to American factories to seek employment • Over the last 30 years • Other countries have become more industrialized, inventing and producing products for consumers. American businesses are purchasing from foreign companies. • Global Competition • Ability to make profit-making organizations to compete with businesses in other countries.

  7. Importance – International Business • Materials, parts, and demand • Global Opportunities • Improved political relations

  8. Achieving Effectiveness & Efficiency Effectiveness making the right decisions about what products or services to offer customers and how to produce and deliver them. Efficiency Producing needed goods or services quickly and at low cost • Success = • Low cost • (+) • Quality • _____________________ • Successful Business!

  9. Achieving Effectiveness & Efficiency Firms Effective, but not efficient Efficient, but not effective Managers Focus on both effective and efficiency • Achieving Effectiveness • Knowledge and skills • Know your customer • Buying Habits • Gathering Info • Focus Groups • Product Extension • Additional Features • Highest Quality

  10. Achieving Effectiveness & Efficiency • Achieving Efficiency • Output • Quantity produced in a given time • Productivity • Largest quantity in the least amount of time • Specialization • Referring to skill of an employee • Mass production (assembly line, equipment) • Technology & Innovation • Equipment, manufacturing processed, materials • Reorganization • Downsize • Empowerment of employees

  11. Group Work As a group determine: A) Effectiveness and Efficiency B) Effectiveness, but not efficient C) Efficient, but not Effective D) If Effective, how was it achieved. E) If Efficient, how was it achieved.

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