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Participating in the Dynamic Business Environment
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THE FUTURE OF BUSINESSGitman & McDaniel
5th Edition
THE FUTURE OF BUSINESSGitman & McDaniel
5th Edition
Chapter1
Participating in the Dynamic Business Environment
Participating in the Dynamic Business Environment
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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 world’s economic systems?
5 How can technological effectiveness help a firm reach its goals?
6 What are the trends in global competition?
Learning Goals
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Learning Goal 1
How do businesses and
not-for-profit organizations
help create our standard of living?
1
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THE NATURE OF BUSINESS1
BusinessesProvide…
… Goods and services that are the basis of our
standard of living
… Goods and services that are the basis of our
standard of living
… Jobs, goods and services that help
determine our quality of life
… Jobs, goods and services that help
determine our quality of life
A business is an organization that strives for a profit by providing goods and services desired by its customers.
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Profit1
RevenueRevenueThe money a company earns from providing services or selling goods to customers.
The money a company earns from providing services or selling goods to customers.
less
CostsCosts
ProfitProfit
equals
Expenses that a company incurs from creating and selling goods and services.
Expenses that a company incurs from creating and selling goods and services.
The money left over afterall expenses are paid.
The money left over afterall expenses are paid.
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Not-for-Profit Organizations1
A not-for-profit organization Is an organization that exists to achieve some other goal than the usual business goal of profit.
Government is the largest
not-for-profit group.
Government is the largest
not-for-profit group.
Not-for-profit organizations
account for 28% of economic activity
In the U.S.
Not-for-profit organizations
account for 28% of economic activity
In the U.S.
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Factors of Production1
Natural ResourcesNatural Resources
LaborLabor
KnowledgeKnowledge
CapitalCapital
EntrepreneurshipEntrepreneurship
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Learning Goal 2
How are social trends,
such as more women entering
the workforce, affecting business?
2
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SOCIAL TRENDS2
SocialFactors
SocialFactors
AttitudesAttitudes
ValuesValues
LifestylesLifestyles
Growth of Component Lifestyles
Increase in Two-Income Families
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Learning Goal 3
How are demographic trends
creating new opportunities
for business?
3
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DEMOGRAPHIC TRENDS3
DemographyDemography
AgeAge
RaceRace
EthnicityEthnicity
LocationLocation
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Key Age Groups3
Generation YGeneration Y
Generation XGeneration X
Baby BoomersBaby Boomers
Older ConsumersOlder Consumers
Born between 1979-1994Born between 1979-1994
Born between 1965-1978Born between 1965-1978
Born between 1946-1964Born between 1946-1964
Over 60 years of ageOver 60 years of age
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Diversity in America3
U.S. is becoming a multicultural society
Minorities constitute one-third of the nation’s population
Minorities control $1 trillion in annual spending
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Learning Goal 44
What are the primary features
of the world’s economic systems?
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EVOLVING GLOBAL ECONOMIC SYSTEMS4
CapitalismCapitalism
Command EconomyCommand Economy
SocialismSocialism
Mixed EconomiesMixed Economies
The private enterprise systemThe private enterprise system
CommunismCommunism
Government ownership /controlGovernment ownership /control
More than one systemMore than one system
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Learning Goal 55
How can technological effectiveness
help a firm reach its goals?
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Technological Trends
Microelectromechanical systems (MEMS)
Nanotechnology
Internet
5
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Learning Goal 66
What are the trends in
global competition?
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TRENDS IN GLOBAL COMPETITION6
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 finalgoods and services produced within a nation’s borders in a year.
