Comprehensive Business Studies: Chapters 1-14 Key Concepts

For-Profit

Earn profit by selling goods/services.

Nonprofit

Provide social/educational services.

For-Profit Social Enterprises

Profit + social mission (ex: TOMS Shoes).

Management

Planning, organizing, directing, controlling.

Operations

Converting resources → goods/services.

Marketing

Creating, communicating, delivering value.

Accounting

Recording & analyzing finances (financial vs managerial).

Finance

Managing funds, investments, raising capital.

IT

Collecting/distributing info for decision-making.

External Forces on Business

Technology, economy, government, consumer trends, global factors.

Resources

Land, labor, capital, entrepreneurship.

Key Questions

What to produce? How to produce? Who receives it?

Systems

Pure capitalism vs pure socialism.

Competition

Perfect competition, monopolistic competition, oligopoly, monopoly.

GDP

Value of goods/services produced.

Indicators

Leading (predict future, ex: unemployment claims), Lagging (confirm trends, ex: length of unemployment).

Monetary Policy

Federal Reserve - money supply.

Fiscal Policy

Government spending & taxation.

Entrepreneur

Identifies opportunity, takes risk, creates business.

Small Business Definition (SBA)

Independently owned/operated, not dominant in industry.

Importance of Small Businesses

50% of GDP, job creation, innovation, opportunities for women/minorities, support large businesses.

Industries

80% Service-based (professional, retail, trade), 20% Goods-producing (construction, manufacturing).

Advantages of Small Business

Independence, financial rewards, lifestyle, learning.

Disadvantages of Small Business

Risk, stress, time, undesirable tasks.

Franchise Pros

Brand, support.

Franchise Cons

Fees, less control.

Business Plan Sections

Executive summary, description, industry analysis, mission/values, management plan, marketing, financials.

Factors to Consider in Business Ownership

Control, profit-sharing, liability, financing, setup costs, taxes, skills.

Sole Proprietorship

72% of U.S. businesses.

Sole Proprietorship Pros

Full control, all profits, easy/cheap setup.

Sole Proprietorship Cons

Unlimited liability, hard to raise funds, ends with the owner.

Partnership

Shared liability/profits.

Limited Partnership

General partner (unlimited liability) + limited partners (risk = investment).

Corporation

Separate legal entity.

Ownership in Corporation

Ownership = stockholders; run by Board + CEO.

S-Corp

Limited liability + avoids double taxation, strict rules.

LLC

Flexible profit distribution, fewer restrictions.

Cooperative

Owned by members; share profits.

Merger

Two companies combine.

Acquisition

One buys another.

Hostile Takeover

Target resists.

Product

Anything marketed to satisfy needs/wants.

Goods

Tangible (phones, clothing).

Services

Intangible (banking, healthcare).

New Product Development Process

Idea generation (R&D, employees, customers, competitors), Idea screening (feasibility), Business analysis (costs, profit), Prototype development, Product testing (consumer feedback), Market testing (limited release), Commercialization (full launch).

Product Differentiation

Branding: Name, symbol, design; Packaging: Protects, informs, attracts; Labeling: Ingredients, instructions, warnings; Quality: Drives satisfaction and loyalty.

Product Life Cycle (PLC)

Introduction: High costs, low/no profit; Growth: Sales up, competition grows; Maturity: Peak sales, strong competition; Decline: Sales drop, possible discontinuation.

Brand Loyalty

Repeat buyers.

Brand Equity

Market value of brand name (ex: Apple, Nike).

Teams

Complementary skills, interdependent, authority, shared goals.

Groups

Work independently, share info only.

Effective Teams

Trust, interdependence, encouragement, shared leadership.

Group Cohesiveness

Members like belonging → stronger performance.

Groupthink

Too much conformity → poor decisions.

Leadership Skills

Influence, integrity, consistency, encouragement, conflict resolution.

Communication

Transfer of info sender → receiver.

Barriers to Communication

Noise, poor listening, cultural/functional differences.

Email

Clear, respectful, professional.

Memos

Short, persuasive, organized.

Presentations

Plan, prepare, practice, present with visuals.