UARK Business Foundations Final Exam

Business

an entity that is engaged in commercial, industrial, or professional activities that produce and/or sell goods or services for profit

Organizational Structure

determines the flow of work

Culture

values that create a unique environment

Operations

relates to processes used to get the daily work done, and the data collected from this work and your customers to better inform decision-making

Business Operations

is about understanding how all of the components fit together to make the organization function

Global Trade

the exchange of goods and services between countries

Importing

the buying of products overseas and reselling them in one's own country

Exporting

the sale of domestic products to foreign customers

Trade Restriction

a government policy that limits the flow of goods and services between countries

Protectionism

a set of government policies designed to defend domestic industries against foreign competition

Trade Surplus

occurs when a nation imports more than it exports

Tariff

a tax or duty paid on imported goods

Growth Mindset

- Your intelligence and thinking skills are not fixed.

- Become passionate in learning and allow your mind to stretch in challenging situations.

- Think of other people you admire, and their growth mindset.

- Begin right now.

Grit

passion and perseverance in the pursuit of long-term goals

Relationship between growth mindset and grit

people with growth mindset tend to have higher levels of grit

Opportunities

create businesses

The Idea Classification Matrix

• Successful idea

• Inventions

• Improvements

• Irrelevant ideas

The Four Parts of a Business Model

- Offering

- Customers

- Infrastructure

- Financial Viability

Customer Value Proposition

explain how your products and services and help customers do something more inexpensively, easily, effectively, or quick than before

The Most Common Components of a Business Model

• The Problem

• The Solution

• Key Resources

• Customer Segments

Customer Segmentation

includes a variety of factors including age, occupation, stage of life, gender, location and more

Distributor

Buy directly from farmers and sell to supermarkets

Retailer

a business whose sales come primarily from retailing (Walmart, Target)

Franchising Business Model

franchisor sells a franchisee the right to use his brand (Wendy's)

Subscription Business Model

Netflix, Hulu, Peacock, etc.

Aggregator Business Model

• Amazon Marketplace

• Airbnb

Advertising Business Model

Google AdWords

Software as a Service

- Photoshop

- Click Up. HubSpot

Utility and Usage Business Model

Hotels. Cell Phone and Internet Carriers

Professional Business Model

• Lawyers

• Accountants

Licensing Business Model

• Coca-Cola licensing name to manufacturers

• Universal Studios licensing movie rights to Netflix

Freemium Business Model

LinkedIn, Spotify

Business strategy

a plan of action that helps companies develop a path to compete in an industry

Industry

a grouping of similar companies based on their primary business activities

Strategy

focuses more on how each business competes in an industry, whereas marketing focuses on markets or consumers

Competitive rivalry

A few competitors offer the same products and services in a growing industry and customers have the benefit of switching from one to the other

Bargaining power of suppliers

how easily can suppliers raise prices? Limited suppliers and costly to switch

Bargaining power of customers

Fewer consumers with the opportunity to easily switch sellers tend to have the most power

Threat of new entrants

easier it is to enter the market, greater threat to established businesses

Threat of substitute products and services

can customer needs be met in a different way?

Marketing

is about communicating the brand and the overarching messaging, big strategic view

Sales

is about creating relationships to customers

Product

Tangible or intangible goods offered by the company

Price

The cost of the product/ service, its perceived value, and how much the cost can be adjusted

Place

where the product or service is distributed to the market

Promotion

the various ways companies communicate with their customers

Cost Plus Pricing

determining your cost of making the product and adding a markup for selling price (ex: most retail products - clothing especially)

Competitive Pricing

setting prices based upon what the competition is charging (Walmart used this in the beginning and still does with price matching)

Value Based Pricing

priced based upon customers' perceived value of the product or service (ex: designer handbags, diamonds)

Price Skimming

Setting an initial high price when entering the market and gradually lowering as the market evolves (ex: Apple iPhone or Sony PlayStation for each new release)

Penetration Pricing

initially uses low prices to attract customers to a new product or service in an effort to tempt them away from competition (ex: Internet and cable providers like Cox and AT&T)

Customer

someone who pays for a product or service

Market

a place where people can sell goods and services (the supply) to people who wish to buy those goods and services (the demand). Markets are composed of people who buy similar products

End Users

customer actually using your product

Influencers

(opinion leaders) - customers with a large following who have the power to influence the end users (social media influencers)

Recommenders

other customers who recommend the product (paid reviewers or bloggers for instance)

Economic Buyers

in B2B it might be the merchant or the person who chooses to stock the item, in B2C it might be the person who ultimately pays for it

Decision Makers

either a higher-level merchant in B2B OR at the B2Clevel it is the ultimate decision maker (perhaps the parent)

Target Market

a group of specific people who are most likely to buy the company's products and services

Market Segmentation

dividing a target market into approachable groups based on wants, needs, common interests, common behaviors, and demands

Demographic Segmentation

Hermès Birkin bag ($25,000-35,000) appeals to the highest income demographic for the brand compared to the silk scarves ($550) which are more accessible to other income groups

Psychographic Segmentation

a gym may segment members into one group who enjoys weightlifting and another who enjoys spin classes based upon interest

Behavioral Segmentation

Starbucks rewards program will reward you based upon your loyalty and repeat purchases with stars and free items

Geographic Segmentation

Walmart stores in Denver vs. Tuscaloosa will carry different items based upon the climate in November

Organizational Structure

a system that coordinates the people, tasks and activities necessary to carry out a particular purpose

Top Managers

set the organization's direction and make decisions that affect everybody (i.e. CEO, CFO, EVP, Directors.)

Middle Managers

report to upper management and direct the work of first-line managers; they are also responsible for divisions or departments. (i.e. VP, Managers, etc.)

First-Line Managers

direct daily activities for producing goods and services (i.e. Project Managers, Assistant Managers, etc.)

Vertical Organizational Structure

Structure based on a chain of command - top passes down orders to lower-level workers

Horizontal Organization Structure

Structure that focuses on teamwork and collaboration with shared tasks to achieve collective goals

Organizational Life Cycle

Organization becomes more mechanistic and bureaucratic as they grow

Birth Stage

little staff, no written rules, few formalized processes

Youth Stage

growth, more people, rules and guidelines first established

Midlife Stage

company growing with new hires, more centralized structure

Maturity Stage

risk of company becoming stagnant due to rules and restrictions

Symbols

objects that convey meaning to others about an organization's culture

Practices

activities within an organization that occur frequently and give an indication of the type of organizational culture in an organization

Rituals

activities and ceremonies that celebrate important occasions and accomplishments within an organization

Myths

narratives based on true events that are repeated to emphasize an important component of an organization's culture

Planning

setting goals for the future, designing appropriate strategies, and acquiring the right resources to achieve organizational goals

Organizing

the process of orchestrating people, structure, actions, resources and decisions to achieve goals

Leading

influencing people to achieve goals

Controlling

monitoring activities such as financials, policies, measuring results, comparing them with goals and correcting performance where necessary

Human Resource Management

the practice of recruiting, hiring, deploying, and managing an organization's employees

Talent Management

the processes involved in managing the flow of well-qualified employees into an organization and through various positions within the organization

Strategic Human Resource Management

The process by which managers design the components of an HRM system to be consistent with each other, with other elements of organizational architecture, and with the organization's strategy and goals.

Job Analysis

the process of gathering and analyzing information about the content and the human requirements of jobs, as well as the context in which jobs are performed

Job Description

a written description of the basic tasks, duties, and responsibilities required of an employee holding a particular job

Job Specification

qualifications- skills, knowledge, and abilities needed to perform the job

Communication

the act of transmitting information, thoughts, and processes through various channels

Verbal communication

the exchange of information, ideas, and processes through speech

- Examples: speeches, presentations, meetings

Nonverbal communication

the transmission of wordless behaviors and actions between people

-Examples: facial expression, eye gaze, gestures, tone of voice, the way you walk, stand or dress

Virtual Communications

-Verbal exchange of information through email, video conferencing, blogs, etc.

-Emails and texts make up 75% of electronic communication between workers but video calls are also on the rise.

Barriers to Communication

Obstacles that interrupt flow of messages

Listening

the active effort to understand others

Active listening

the act of concentrating on the true meaning of what other people are saying

Difference between listening and active listening

Listening:

-Simply hearing the words being spoken

- Often passive; you may not be fully focused

Active Listening

- Fully concentrating, understanding, and responding thoughtfully

- Involves eye contact, nodding, and verbal affirmations like “I see” or “Go on.”

Operations

The wide range of activities that businesses engage in to keep a company running and earn a profit

Production Process

transforming inputs into outputs

Retail Business Operations

ensure that there is enough product in stock for customers with items priced appropriately for the target market