Chapter 1 - the dynamic business environment

What are goods?

Tangible products that can be physically touched, such as clothing, computers, and furniture.

What are services?

Intangible products that cannot be physically touched, such as education, insurance, and vacations.

What is a business?

An activity that provides goods or services to others with the goal of making a profit.

What is the key to business success?

Identifying a customer need and satisfying it.

Who is an entrepreneur?

Someone who risks their own time and money to start and manage a business.

What is revenue?

The total money a business receives during a period.

What is profit?

The money remaining after a business pays its expenses. Profit = Revenue − Expenses.

What is a loss?

When a business's expenses are greater than its revenue.

What is business risk?

The possibility of losing time and money on an unsuccessful business.

What is standard of living?

The amount of goods and services people can afford with their money.

What is quality of life?

The overall well-being of people, including health care, education, political freedom, and the natural environment.

Standard of living vs. quality of life

Standard of living = what you can afford. Quality of life = how well you live.

Who are stakeholders?

People or groups affected by a business or interested in its activities, such as customers, employees, suppliers, investors, and government.

Why must businesses balance stakeholder needs?

Different stakeholders have different expectations, and balancing them helps a business succeed.

What is outsourcing?

Hiring another company to perform business functions, such as using an outside accounting firm.

What is offshoring?

Obtaining business inputs from another country, such as purchasing materials from China.

What is insourcing?

Keeping business functions within the company rather than hiring an outside company.

Outsourcing vs. offshoring vs. insourcing

Outsourcing = another company. Offshoring = another country. Insourcing = within the company.

What is a non-profit organization?

An organization focused on achieving a social or community mission rather than generating personal profits for owners.

Who is a social entrepreneur?

Someone who uses business principles to start or manage an organization that addresses social problems.

What is a social enterprise?

An organization combining a social or ethical mission with income-generating business activities.

What are the five factors of production?

Land, Labour, Capital, Entrepreneurship, and Knowledge. Memory trick: Little Lions Can Eat Kiwis.

What does land mean as a factor of production?

Natural resources used to produce goods and services, such as water, forests, and oil.

What does labour mean as a factor of production?

Human workers and their efforts used to produce goods and services.

What does capital mean as a factor of production?

Physical assets used in production, such as machines, tools, and buildings. In this chapter, capital does NOT mean money.

What does entrepreneurship mean as a factor of production?

Organizing resources, starting and managing a business, and taking risks.

What does knowledge mean as a factor of production?

Information, expertise, and skills used to create value.

What is the business environment?

External conditions and factors that can help or hurt a business's development and success.

What are the six elements of the business environment?

Legal, Economic, Technological, Competitive, Social, and Global. Memory trick: Little Elephants Take Cool Selfies Globally.

What is the legal environment?

The laws and regulations businesses must follow, including employment, financing, and consumer protection laws.

Why are ethics important in the legal environment?

Honesty, integrity, and ethical standards build trust and support a functioning economy.

What is the economic environment?

Economic conditions affecting businesses and consumers, including income, spending, production costs, and employment.

What is productivity?

How efficiently goods and services are produced using available resources.

What is the unemployment rate?

The percentage of the labour force that is unemployed.

What is inflation?

An increase in the general prices of goods and services.

What is foreign exchange?

The value of one country's currency compared with another country's currency.

What is the technological environment?

Innovations and technologies that change business operations, such as AI, software, smartphones, and the internet.

What are the benefits of technology for businesses?

Lower costs, increased efficiency, better customer service, and personalized marketing.

What are disadvantages of technology?

Potential job losses, privacy concerns, and identity theft.

What is creative destruction?

When new technologies or innovations replace older ways of doing business, improving efficiency but potentially eliminating jobs.

What is e-commerce?

Buying and selling goods and services online.

What is e-business?

Using information systems and technology to support business processes, including activities beyond online sales.

E-commerce vs. e-business

E-commerce focuses on online buying and selling. E-business is broader and includes technology-supported business operations.

What is B2B?

Business-to-business transactions, meaning one company sells goods or services to another company.

What is identity theft?

When someone steals another person's personal information and uses it illegally.

What is the competitive environment?

The competition businesses face and the strategies they use to attract and retain customers.

What are Porter's Five Forces?

Threat of new entrants, buyer power, supplier power, threat of substitutes, and existing rivalry.

What is the threat of new entrants?

The likelihood that new competitors will enter an industry.

What is buyer power?

The influence customers have over businesses, including prices and product choices.

What is supplier power?

The influence suppliers have over businesses, including prices and availability of resources.

What is the threat of substitutes?

The possibility that customers will switch to alternative products or services.

What is existing rivalry?

Competition between businesses already operating in the same industry.

What is employee empowerment?

Giving employees the authority to make decisions and respond to customers.

What is a customer-driven business?

A business that focuses on understanding and meeting or exceeding customer needs and expectations.

What is the social environment?

Social and population trends that influence businesses and consumer behaviour.

What is demography?

The statistical study of populations, including age, gender, income, population size, density, and race.

How does an aging population affect businesses?

It changes consumer needs and increases demand for certain products and services.

Why is diversity important to businesses?

A diverse population contributes different customers, workers, employers, and market opportunities.

How do changing family structures affect businesses?

Changes in household and family arrangements create different consumer needs.

What is the global environment?

Worldwide economic, social, and environmental changes that influence businesses.

What is globalization?

Increasing connections between countries that create business opportunities and greater competition.

Why does sustainability matter to businesses?

Climate change and environmental concerns increasingly influence business decisions.

What are goods-producing industries?

Industries that create physical products or extract natural resources, such as manufacturing, construction, agriculture, and mining.

What are service industries?

Industries providing intangible products, such as education, health care, insurance, finance, and tourism.

How has Canada's economy shifted over time?

Services have become increasingly important for employment, although manufacturing remains vital.

How has technology changed agriculture?

Improved farming productivity, allowing fewer farms to produce more output.

What is the Information Age?

A period when information and technology are transforming agriculture, manufacturing, and service industries.

What is intellectual capital?

The valuable knowledge, skills, and expertise employees possess that help businesses innovate and perform better.

Why is intellectual capital important?

It helps businesses develop products, attract customers, improve performance, and increase profits.