Business Unit Quiz notes

Glossary of Business Terms

• Business: An organisation engaged in commercial, industrial, or professional activities, to satisfy the needs, wants and demands of consumers.

• Organisation: A group of people who come together for a particular purpose or reason.

• Commercial Activities: Relating to commerce (money) such as selling goods and services to make a profit.

• Industrial Activities: Relating to industry such as manufacturing, storage, material handling, maintenance, treatment and disposal, etc.

• Professional Activities: Where a person uses their knowledge and skills to provide a service to someone else, such as accountants, electricians, lawyers, doctors, schools, etc.

• Goods: Items that can be seen & touched = "tangible".

• Service: Assistance to others, but no physical item = "intangible".

• For-Profit Business: Produces or sells goods and services to satisfy the needs, wants, and demands of consumers for the purpose of making a profit.

• Profit: The sales income left after all costs and expenses involved in running the business are paid.

• Nonprofit/Not-for-Profit Organisations: Operates strictly to help people in a community, raises funds for a specific goal. They use any surplus funds to improve the services offered to its members, but do not generate profit for owners.

  • Example: Charities and charitable organizations, recreational sports clubs.

• Entrepreneur: A person who starts a business and takes risks in order to satisfy needs and/or wants.

• Entrepreneurship: The process of identifying opportunities, designing, launching and running a new business, taking on its financial risks.

• Venture: A business undertaking involving some risk, established with the expectation of gain or profit.

• Opportunity: Arises from a change or a trend that resulted in the generation of a problem, need, or want.

• Risk: The chance of possible loss of money or reputation that entrepreneurs take when starting a new venture.

• Entrepreneurial Skills: The skills entrepreneurs need to be successful: creative thinking skills, critical thinking skills, relationship skills, practical skills.

  • Creative: ability to generate and market their ideas, and identify opportunities.

  • Practical: ability to plan, organize, negotiate, network, keep records.

• Triple Bottom Line: Refers to the three P's: Profit, People, and Planet.

  • Profit: the financial aspect, how does the company generate revenue?

  • People: the social impact, including employees, customers, and communities.

  • Planet: the environmental impact.

• Marginalised: People or groups who are left out or treated unfairly because of who they are, like their race, gender, or ability, and do not get the same opportunities as others.

• Underrepresented: When a group of people, such as a particular race or gender, has fewer opportunities or isn't as visible or included as they should be in a certain field, community, or activity.

• Inclusivity: Creating an environment where everyone feels welcome, respected, and valued, no matter their background or identity, so that everyone has a chance to participate and succeed.

• Invention: Something new, e.g., telephone, automobile.

• Innovation: A change to something that already exists, e.g., cell phone, hybrid cars.

Project Management Process

• Stages: Initiating, planning, executing, monitoring, closing.

  • Initiating: Determine goals, define deliverables, identify stakeholders, obtain approval.

  • Planning: Identify tasks, determine resources, create a project plan, analyze risks.

  • Executing: Implementing the plan, manage changes, lead the team, create deliverables.

  • Monitoring: Track progress, monitor schedule and budget, conduct status reviews, document lessons learned.

  • Closing: Ensure completion, submit deliverables, complete checklist, reflect and improve.

Needs vs. Wants

• Needs: Things you must have in order to live a safe, healthy life.

• Wants: Things you enjoy. You can wait to buy them because they're not needed to survive. The ‘extras’ that make your life more pleasant.

Maslow's Hierarchy of Needs

• Self-fulfillment needs: Self-actualization, esteem needs.

• Psychological needs: Belongingness and love needs, safety needs.

• Basic needs: Physiological needs.

Industry

• A group of businesses that make similar products or offer similar services, like technology, agriculture, or manufacturing.

Economic Resources

• Economic resources include everything that a business makes use of in order to produce goods and services for its customers: land (natural resources), labour (human effort), capital (equipment to manufacture goods & services), entrepreneurship.

The Economic Problem

• Problem arises because resources are limited, but human wants and needs are unlimited. This means we have to make choices about how to allocate our scarce resources.

Market Concepts

• Market: An environment where transactions happen in order to exchange goods and services.

• Demand: How much of a product people are willing and able to buy at different prices.

  • Spending: When people buy more, businesses earn money.

  • Production: High demand means more products are made.

  • Jobs: More production can create more jobs.

  • Prices: Demand affects prices—popular items may cost more.

  • Economy: Strong demand indicates a healthy economy.

Law of Demand

• When prices go down, demand for that product or service goes up.

• As price goes up, demand goes down.

• Complementary Goods: Goods that are often bought together; as prices decrease, the quantity demanded will increase (and vice versa).

  • Example: Ink cartridges and printers, or computers and software.

• Substitute Goods: Goods that are the same or similar to another product; the quantity demanded will increase when the price of the substitute is increased.

  • Example: Pepsi and Coca-Cola, or gasoline vehicles and electric vehicles.

Supply Concepts

• Supply: The quantity of goods and services that a business is willing and able to provide, within a range of prices that consumers are willing to pay.

• Law of Supply: As the price of a product goes up, the supply goes up (to maximize profit), and as the price goes down, the supply goes down (to minimize losses).

Market Equilibrium

• Equilibrium Point: It happens at the price where the amount people want to buy is the same as the amount sellers are willing to sell. (Supply and demand are equal).

• Surplus: Occurs when quantity supplied exceeds quantity demanded.

• Shortage: Occurs when quantity demanded exceeds quantity supplied.

Market Structures

• Perfect Competition: Many businesses sell identical products, and no single firm can influence market prices.

• Monopolistic Competition: Many businesses sell similar but slightly different products, giving them some control over prices.

• Oligopoly: A few businesses dominate the market and make decisions that can significantly affect market prices and competition.

• Monopoly: A single business controls the entire market, setting prices without competition.

Market Forces

• The factors that influence the prices and availability of goods and services in an economy.

Business Ownership Types

• Sole Proprietorship: The simplest form of ownership because there is only one owner. The owner assumes all the benefits and risks of running the business.

• Partnership: A partnership is owned by two or more people who share the benefits and risks of running the business. Usually, a partnership agreement is created to protect the partners.

• Corporation: A business that is owned by its shareholders. A Board of Directors governs the decisions of the business and each share gets one vote. Financial rewards and risks are determined by the number of shares.

• Co-operative: A business that is owned by its members, who may be either customers, employees, or both. Each member gets one vote, regardless of the number of shares. Co-operatives are usually not-for-profit businesses.

• Franchise: A business that involves two parties: the franchisor who owns the concept and the franchisee who owns the local store and leases the concept by paying franchise fees. A franchisee can be a sole proprietor, partnership, or corporation.

• Crown Corporation: A business owned by the government.

• Public Corporation: A business owned by shareholders who buy and sell their shares publicly. Anyone with the money to purchase a share in a public corporation can do so and become an owner.

• Private Corporation: Owned by individuals, partners, or groups, as in the case of co-operatives or private corporations. A private corporation is one where the shares are not sold on the stock market but are held by a few private investors or owners who want the limited liability provided by a corporate structure. As private businesses, they have no legal obligation to report profits or losses, except to the government for taxation purposes.

Trade Concepts

• International Trade: All the business transactions necessary for creating, shipping and selling goods and services across national borders.

• Domestic Transaction: Is the selling of items produced in the same country.

• International Transaction: Is the selling of items produced in other countries. These items contribute to the global economy.

• Imports: Goods and services bought in one country that were produced in another.

• Exports: Goods and services that are produced in one country and sold to buyers in another.

• Trade Agreements: International trade agreements are agreements between nations that govern exports, imports, tariffs, and taxes.

Marketing Basics

• Marketing: The process that connects businesses with consumers.

• Target Market: A specific group of consumers that a business aims to reach with its products or services.

• Demographics: Age, gender, income, education.

• Psychographics: Interests, lifestyle, values, and attitudes.

• Geographics: Where they live or spend time.

Behavioural Patterns

• Habits, brand loyalty, preferences, etc.

  • Example: A company might target teens who are into tech gadgets or adults who prioritize eco-friendly products.

• Mission Statement: A short description that explains the purpose of a business. It outlines what the company aims to achieve, who it serves, and how it operates.

  • Purpose: Why the company exists (its reason for being).

  • Values: The principles or beliefs the company follows.

  • Goals: What the company hopes to accomplish in the long term.

The Marketing Mix (4 P's)

• Product: What products to make or sell. The goods or services a business offers to meet the needs of the target market, including design, quality, features & benefits, service and support.

• Price: The amount of money customers must pay for the product. Compared with the competition, quality of product = value, cost of doing business consideration.

• Place: The location or distribution channels where customers can buy the product.

• Promotion: The strategies businesses use to inform and persuade customers.

Channels of Distribution

• A distribution channel is the chain of businesses that a product or service passes through until it reaches the final consumer.

  • Direct: Sells directly.

  • Indirect: Intermediary is involved.

  • Specialty: Indirect but not a retail store.

Promotion Strategies

• The strategies businesses use to inform and persuade customers.

• Advertising: The paid-for promotion of a business’s goods and services over a variety of mass media to a target market of consumers.

• Publicity: Information about a business carried by media that the business doesn’t pay to use. Since the advertiser hasn’t paid for the broadcast time or print space, the company doesn’t control what is said about it.

• Sales Promotions: Encourage customers to buy NOW; examples include coupons, contests, premiums, samples, and special events.

Market Research

• The process of gathering information to ensure your product meets the needs of your potential customers.

  • It helps businesses make informed decisions about:

    • What products to offer.

    • How to price them.

    • Where to sell them.

    • How to promote them.

  • Primary Research: Data collected directly from your target audience (surveys, interviews, focus groups).

  • Secondary Research: Data collected from existing sources (reports, articles, industry data).

Value Proposition

• A statement that explains why customers should choose your product over competitors.

  • It communicates the unique benefits or value your product offers and why it matters to the target market.

  • Examples:

    • Apple iPhone – "A seamless, intuitive experience for staying connected."

    • Dollar Shave Club – "A better shave for a low price, delivered right to your door."

    • Spotify – "All the music you want, anytime, anywhere."

Competitive Advantages

• The characteristics that give your product an edge over competitors.

  • Types:

    • Cost advantage (lower price).

    • Differentiation (unique features).

    • Niche focus (specialized for a particular group).

• Examples:

  • Amazon – Extensive product selection and fast shipping.

  • Tesla – Innovative electric vehicles with cutting-edge technology.

  • Lush – Natural, eco-friendly beauty products.

Prototype

• An early sample or model of a product, used to test and refine ideas before the final version is created.

• Low-Fidelity Prototype: Simple sketches, models, or representations; quick and inexpensive to create (e.g., a sketch of a smartphone app interface).

• High-Fidelity Prototype: More detailed and closely resemble the final product (e.g., a 3D printed model of a new device or a digital demo of a game).

Functions of Management (PLOC)

• Planning: The process of setting short- and long-term goals and deciding how to achieve them.

  • Upper-Level Managers: CEOs and vice-presidents, set profit goals and strategic objectives for the entire organization. They have a long-term outlook for the organization as a whole.

  • Middle Managers: Directors, branch managers and regional managers, implement the corporate goals within their division or branch. They report to upper-level managers and are responsible for the lower-level managers.

  • Lower-Level Managers: Managers ensure that their department contributes to the overall plan. Often, they train and manage front-line employees who come into direct contact with customers, ensuring that corporate objectives are met.

• Leading: Management is also responsible for directing, leading, and motivating people.

  • Includes delegating responsibilities, decision-making, and encouraging teamwork and collaboration to commit to the business’ vision.

• Organising: An entrepreneur will need to organize human, material, and financial resources clearly.

  • Organisational Chart: Indicates the hierarchy of management.

• Controlling: A manager must monitor their resources to ensure the plans are being carried out effectively.

  • Human: employee discipline, performance appraisals.

  • Material: inventory control.

  • Financial: ensuring financial info is up to date for business decisions and taxation purposes.

Leadership Styles

• Autocratic: Take control of all situations and dictate how things are to be done, do not allow employees to participate in decision making.

  • Advantages: Useful when quick decisions are needed, works well with less skilled labor.

  • Disadvantages: Can lead to backlash or conflict, inhibits creativity.

• Democratic: Consult with employees and involve them in decision making.

  • Advantages: Builds team spirit through involvement, increases employee job satisfaction.

  • Disadvantages: Slows down decision making, only effective if employees are competent.

• Laissez-Faire: Give employees full freedom.

  • Advantages: Useful when employees are highly skilled, builds independence.

  • Disadvantages: Can reduce output, lack of control.

Code of Conduct

• Many companies have a code of ethics or conduct that managers use to guide their team’s actions and uphold CSR values.

Corporate Social Responsibility (CSR)

• The idea that businesses have a responsibility to consider the social and environmental effects of their actions in addition to their economic impact.

Human Resources

• Deal with the people in an organization:

  • Recruitment and hiring.

  • Set up training programs.

  • Manage compensation and benefits.

  • Create a safe work environment.

Employability Skills

• Skills needed to enter, stay in, and progress in the world of work.

The Ontario Human Rights Code

• Protects employees from discrimination and harassment based on various factors such as age, race, gender identity, etc.

The Canadian Human Rights Act

• Covers workplaces under federal jurisdiction and protects from discrimination and harassment.

Factors of Production

• Six Factors: Natural resources, Raw materials, Labour, Capital, Information, Management.

  • Ingredients: Raw materials that are combined or converted into finished products.

  • Supplies: Raw materials used in the product creation process, but do not become part of the finished product.

Outsourcing

• The hiring of another company to perform tasks for the company, offering cost-saving options.

Capital Types

• Liquid Capital: Money invested in the business that is cash, stocks, bonds, or accounts receivable.

• Non-Liquid Capital: Money invested in the business in the form of machinery and operational items.

The Production Process

• Steps: Purchasing > Grading > Processing > Quality Control.

  • Purchasing: Acquiring necessary items needed to produce products.

  • Grading: Measuring products against accepted standards.

  • Processing: Conversion of raw materials into finished goods.

  • Quality Control: Ensuring products meet quality standards.