Participating

Participatingininthe
theDynamic
Dynamic
Business
BusinessEnvironment
Environment
Chapter
1
THE
THEFUTURE
FUTUREOF
OFBUSINESS
BUSINESS
Gitman
Gitman&&McDaniel
McDaniel
55ththEdition
Edition

Prepared
Preparedby
by
Chapter 1

Deborah Baker
Deborah Baker
Texas
Texas ChristianUniversity
Christian University
 Learning Goals

1 How do businesses and not-for-profit organizations

help create our standard of living?
2 How are social trends, such as more women entering
the workforce, affecting business?
3 How are demographic trends creating new
opportunities for business?
4 What are the primary features of the worlds economic
systems?
5 How can technological effectiveness help a firm reach
its goals?
6 What are the trends in global competition?
Chapter 1

Copyright 2005 by South-Western, a division of 2

 1 Learning Goal 1

How do businesses and

not-for-profit organizations
help create our standard of living?
Chapter 1

Copyright 2005 by South-Western, a division of 3

 1 THE NATURE OF BUSINESS

A business is an organization
that strives for a profit by
providing goods and services
desired by its customers.

Goods
Goods andand services
services
Businesses that
that are
are the
the basis
basis ofof our
our
Provide standard
standard ofof living
living

Jobs,
Jobs, goods
goods and
and
services
services that
that help
help
Chapter 1

determine
determine our
our quality
quality of
of life
life
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 1 Profit
The
Themoney
moneyaacompany
company
Revenue
Revenue earns
earnsfrom
from providing
providing services
services
or
or selling
selling goods
goodstoto customers.
customers.
less

Expenses
Expensesthat
that aacompany
company
Costs
Costs incurs
incursfrom
fromcreating
creatingand
and
selling
selling goods
goodsand
and services.
services.
equals

The
Themoney
moneyleft
left over
overafter
after
Profit
Profit all
allexpenses
expensesare
arepaid.
paid.
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 1 Not-for-Profit Organizations

A not-for-profit organization
Is an organization that exists
to achieve some other goal
than the usual business goal
of profit.
Not-for-profit
Not-for-profit
organizations
organizations
account
account forfor 28%
28%
of
of economic
economic activity
activity Government
Government is is the
the
In
In the
the U.S.
U.S. largest
largest
not-for-profit
not-for-profit group.
group.
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 1 Factors of Production

Natural
Natural Resources
Resources

Labor
Labor

Capital
Capital

Entrepreneurship
Entrepreneurship

Knowledge
Knowledge
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 1 TRENDS IN BUSINESS

The Environment Demographic

Change
of Business

Ev om
Ec ste
ge
al

olv ic
Sy
on m s
Soci
Chan

ing
Entrepreneurs
Entrepreneurs
Managers
Managers
Workers
Workers
Customers
Customers

Co Glo in g
m ba er g ogy
pe l l
tit Em hno
io c
n Te
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 2 Learning Goal 2

How are social trends,

such as more women entering
the workforce, affecting business?
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 2 SOCIAL TRENDS

Attitudes
Attitudes
Social
Social Values
Values
Factors
Factors
Lifestyles
Lifestyles

Growth of Component Lifestyles

Increase in Two-Income Families
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 3 Learning Goal 3

How are demographic trends

creating new opportunities
for business?
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 3 DEMOGRAPHIC TRENDS

Age
Age

Race
Race
Demography
Demography
Ethnicity
Ethnicity

Location
Location
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 3 Key Age Groups

Generation
Generation YY Born
Born between
between 1979-1994
1979-1994

Generation
Generation XX Born
Born between
between 1965-1978
1965-1978

Baby
Baby Boomers
Boomers Born
Born between
between 1946-1964
1946-1964

Older
Older Consumers
Consumers Over
Over 60
60 years
years of
of age
age
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 3 Diversity in America

U.S. is becoming a multicultural society

Minorities constitute one-third of the
nations population
Minorities control $1 trillion in annual
spending
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 4 Learning Goal 4

What are the primary features

of the worlds economic systems?
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 4 EVOLVING GLOBAL ECONOMIC SYSTEMS

Capitalism
Capitalism The
Theprivate
privateenterprise
enterprisesystem
system

Command
CommandEconomy
Economy Communism
Communism

Socialism
Socialism Government
Governmentownership
ownership /control
/control

Mixed
MixedEconomies
Economies More
More than
thanone
onesystem
system
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 5 Learning Goal 5

How can technological effectiveness

help a firm reach its goals?
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 5 Technological Trends

Microelectromechanical systems (MEMS)

Nanotechnology

Internet
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 6 Learning Goal 6

What are the trends in

global competition?
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 6 TRENDS IN GLOBAL COMPETITION

Advances in technology and communications

Improvements in productivity

The impact of terrorism on global business

Gross Domestic Product (GDP)

is the total market value of all final
goods and services produced
within a nations borders in a year.
Chapter 1

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