Objectives • Define business. • Define management & manager. • Explain the relationship between business & management. • Identify & describe the 3 major functions of a business.
Group Activity • Brainstorm and invent a product. Use the top ½ of poster paper for the following; • Title = name for your business • Product Description = explain what your product does. • Diagram = product sketch or flow chart (service) • Competitors = list of other existing products that you compete with • Core Competencies = factors that are essential for success • Business Statement = The purpose of our business is to _______________
What is a business? • An organization that creates & satisfies customers
9/12 Warm-up • Identify the purpose of a business (why does a business exist?) • Explain the role of management in a business; • Why is management needed? • What does management do?
Objectives • Define management & manager. • Explain the relationship between a business & its management. • Identify & describe the 3 major functions of a business.
Mind Mapping Activity • Brainstorm a list on what you need to start and run your business and write on bottom ½ of poster. • People • Materials, Equipment, Machinery
Management& Managers Management Managers Anyone responsible for contribution to the results of an organization Results = impact on organization Generate income Define its direction Its performance • Businesses grow, become complex & require organization • Variety of tasksperformed in cooperation, synchronization and communication
What do Managers Do? • Integrate resources into a viable growing organization • Set objectives – organizational goals • Organizes • Motivates & communicates • Measures– establishes targets & yardsticks • Develops People – including themselves
9/13 Warm-up • Which sector (Primary, Secondary or Tertiary) dominates the U.S. economy? • Explain why this sector dominates? • Give an example of a business in each sector.
Marketing is … • Defining customer’s needs & designing products that answer these needs • Done from the customer’s viewpoint • Does target customer want to buy what we are selling? • What is the customer buying? • Not- What are we selling? • How does the customer distinguish us from the competition?
9/14 Warm-up • Explain how and why marketing impacts all aspects of a business.
The Marketing Function Target Customer Identify their needs, realities and values. What do they want to buy? What satisfactions are they looking for? Product Benefits – how it improves customer’s life Differentiation – how & why customer believes it is better than competitors “Process” Development, Pricing, Promotion & Distribution
The Operations FunctionTransforming Inputs into a Product Customer Feedback • Inputs • People • Facilities & Processes • Technologies • Materials • Outputs • Goods • Services The Transformation Process Performance Information
The Finance Function Obtaining the money to fund the start-up, expansion and day-to-day running of the business • Paying for fixed assets • long-term function • used repeatedly • define the scale of the business (production capability) • usually expensive • decline in value over time (depreciation) • Paying Expenses • Direct costs • Wages, raw materials, stock (inventory) • Indirect (overhead) costs • Rent, Advertising, Insurance, Electricity • Interest, Taxes Capital Expenditures Revenue Expenditures
Functions for Your Business • Marketing • Describe your target customer • Identify the benefits (how product improves their life) • Differentiation (how is your product different from competitors) • Operations • Resources needed (human (labor), capital (equipment), materials) • Transformation process • Finance • Funding needed to start-up business? • Sources of funding (where will you get this money?)
Objectives • Identify how a business adds value. • Describe business activity in the primary, secondary & tertiary sectors.
Warm-up • For a business, what is the function of profit? • Do all businesses need to make a profit?
Adding Value = “Utility” How Business makes a product capable of satisfying customer’s needs • Form Utility • Place Utility • Time Utility • Information Utility • Possession Utility
Utility Types • Form Utility • creating use • putting pieces together • combining ingredients • Place Utility • put product where people can buy it • Time Utility • available when people want to buy it • Possession Utility • facilitating exchange • Information Utility • communicating to customer • branding
Adding Value Selling cookies that cost $0.23 for $0.33 How is that $0.10 of value created? Information Utility Possession Utility $0.10 Profit (per cookie) Time Utility Place Utility Form Utility
Group Activity • Explain how your business creates value