unit 1 chap 1-3

Building on the foundation of the Industrial Revolution, large-scale entrepreneurs emerged in the second half of the 1800s building business empires.

In the early part of the 1900s, major businesses focused on further refining the production process and creating greater efficiencies.

After World War II, the balance of power shifted away from producers and toward consumer, flooding the market with enticing choices.

Building on the marketing concept, today, leading-edge firms look beyond each immediate transaction with a customer and aim to build long-term relationships

shaped the internet and change pop culture with them not having any tolerance for bigotry

doesn’t remember a world without the Internet and smart phones—the defining event in their lives was typically the Great Recession, which means that many of them simply don’t trust business. They use their tactical technical prowess to actively seek the very best value and they tend to be great customers for no-frills, you-only-pay-for-what-you-get type service

Factors of Production

Inputs that offer value in their natural state such as land, fresh water, wind, and mineral deposits.

This factor includes machines, tools, buildings information, and technology--the synthetic resources that a business needs to produce goods or services

This factor encompasses the physical, intellectual, and creative contributions of everyone who works within an economy

Entrepreneurs are people who take the risk of launching and operation their own business, largely in response to the profit incentive. They create opportunities by harnessing other factors of produc.t

types of Business Environment:

Governments take active steps to reduce the risks of starting and running a business. The result: free enterprise and fair competition flourish. Another key element of the U.S. economic environment is legislation that supports enforceable contracts. Corruption also affects this.

Companies develop long-term, mutually beneficial relationships with customers with Speed-to-market provides competitive advantage

firms launch products that fail because they’re too far ahead of the market causing them to lose money.

firms that offer products just as the market becomes ready to embrace them.

is finding and holding the best talent contributes to a firm's competitive edge. Finding and holding the best talent will likely become a crucial competitive issue in the next decade as the baby boom generation begins to retire; however, some baby boomers are also working longer.

addresses how digital technology has transformed businesses with new industries have emerged, while others have disappeared or changed dramatically because of this mainly the creation of the World Wide Web which resulted in the rise of e-commerce.

it embodies the values, attitudes, customs, and beliefs shared by groups of people. It also covers demographics or the measurable characteristics of a population with a few key factors having the strongest impact.

Overage that occurs when revenue is higher than expenses over a given period of time.

Shortfall that occurs when expenses are higher than revenue over a given period of time.

The sum of all the money that the federal government has borrowed over the years and not yet repaid.

refers to the government's efforts to influence the economy through taxation and spending designed to encourage growth, boost employment, and curb inflation.

a cycle or series of cycles of economic expansion and contraction.

Period of economic downturn marked by rising unemployment

Marked by a decrease in the GDP for two consecutive quarters

deep and long-lasting recession.

Period of rising economic growth and employment

Period of strong economic growth and high employment

short term unemployment when you are looking for a job

long term unemployment is people who don't have jobs because the economy no longer needs their skills.

Government owns and operates key enterprises that directly affect public welfare. Most Western European countries--from Sweden to Germany, to the United Kingdom--developed powerful socialist economies in the decades after WWII.

Calls for public ownership of all enterprises under the direction of a strong central government. The communist concept was the brainchild of political philosopher Karl Marx. The communism that Marx envisioned was supposed to dramatically improve the lot of the worker at the expense of the super-rich; however, countries that adopted communism in the 1900s--most notably the former Soviet Union, China, Cuba, North Korea and Vietnam did not thrive.

Many competitors selling virtually identical products

Many competitors selling differentiated products

Handful of competitors selling products that can be similar or different

Single producer dominating the industry, leaving no room for competitors. A natural monopoly arises when a single supplier is more efficient than multiple, competing ones.

An economic system—also known as the private enterprise or free market system—based on private ownership, economic freedom, and fair competition.

Fundamental rights of capitalism

is the process of converting government-owned businesses to private ownership

Total value of all final goods and services produced within a nation's physical boundaries over a given period of time it s used to measure the economic performance of individual nations to compares the growth among nations.

The overall level of employment is another key element of economic health. Most nations track employment levels largely through the unemployment rate.

measure the value of one nation's currency relative to the currency of other nations. While this dose not directly measure global commerce, it certainly has a powerful influence on how global trade affects individual nations and their trading partners.

as the engine of future world growth but in early 2016 this started to change when they hit a wall with southeast asia and african countries taking their place because of them benefiting from the migration of labor-intensive, low-wage manufacturing jobs away from China.

Barriers to International Trade

include differences among countries in language, attitudes, and values. Understanding and responding to sociocultural factors are vital for firms that operate in multiple countries.

differences in how the economy is run compared to a other economy know as economic conditions with a few key factors being population, per capita income, economic growth rate, currency exchange rate, and stage of economic development.

given different political regimes around the world managers must carefully evaluate these factors and make plans to respond to them both now and as they changes.

key factors when considering economic differences.

Key Reasons for International Trade.

International trade offers a valuable opportunity for individual firms to capitalize on factors of production that simply aren't present in the right amount for the right price in each individual country.

Global trade reduces dependence on one economy, lowering the economic risk for multinational firms.

International trade can offer companies an invaluable source of new ideas

is a basic measure of the difference in value between a nation's exports and imports.

when the total value of a nation's exports is higher than the total value of its import.

when total value of a nation's imports is higher than the total value of its exports

is a measure of the total flow of money into or out of a country.

occurs when more money flows into a nation than out of the nation, while a balance of payments deficit means more money flows out of a nation than into the nation.

Shortfall that occurs when more money flows out of a nation than into that nation.

international trade by exchange of goods rather than by currency purchase as much as 25% of trade happens this way

means contracting with foreign suppliers to produce products. H&M, for instance, relies on a network for manufacturers around the globe, mostly in less developed parts of the world.

means buying products from overseas that have already been produced rather than contracting with overseas manufacturers to produce special orders. They don't carry the brand name of the company buying them

is the most basic level of international market development. It simply means producing products domestically and selling them in foreign nations.

.Strategies for Reaching Global Markets

involves authority granted by a domestic firm to a foreign firm for rights to produce and market its product or to use its trademark/patent rights in a defined geographical area

is a specialized type of licensing. A firm that expands through foreign franchising , called a franchisor, offers other businesses, or franchisees, in other countries the right to produce and market its products according to specific operating requirements.

in foreign production and marketing facilities represents the deepest level of global involvement. The cost is high, but companies with direct investment have more control over how their business operates in a given country. Firms acquire foreign firms or develop new facilities from ground up in foreign countries.

involves two or more companies join forces to pursue specific opportunities.

A formal, long-term agreement

less formal, less encompassing agreement