Fundamentals of Business – Beck – Dickinson College
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business
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any profit seeking organization that provides goods and services designed to satisfy customers needs
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revenue
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money a company brings in through the sale of goods and services
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business model
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a concise description of how a business intends to generate revenue
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profit
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money left over after all the costs involved in doing business have been deducted from revenue
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competitive advantage
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some aspect of a product or company that makes it more appealing to target customers
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not for profit organization
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organizations that provide goods and services without having a profit motive - nonprofit
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goods producing businesses
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create value by making things which are tangible - digital products are exception
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service businesses
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companies that create value by performing activities that deliver benefit to customers
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barrier to entry
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any resource or capability a company must have before it can start competing in a given market
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business mindset
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a view of businesses that consider the myriad of decisions that must be made and the many problems that must be overcome before companies can deliver products to satisfy customer needs
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social environment
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trends and forces in society at large
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stakeholders
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internal and external groups affected by a company's decisions and activities
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technological environment
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forces resulting from the practical application of science and innovations, products and processes
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economic environment
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the conditions and forces that affect the cost and availability of goods, services, and labor and thereby shape the behavior of buyers and sellers
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legal and regulatory environment
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laws and regulations at local, state, national and even international levels
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market environment
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a company's target customers, the buying influences that shape the behavior of those customers and competitors that market similar products to those customers
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research and development (R&D)
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functional area responsible for conceiving and designing new products
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information technology (IT)
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systems that promote communication and information usage through the company or that allow companies to offer new services to their customers
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operations management
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management of the people and processes involved in creating goods and services
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professionalism
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the quality of performing at a high level and conducting oneself with purpose and pride
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etiquette
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the expected norms of behavior in any particular situation
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economy
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the sum total of all the economic activity within a given region
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economics
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the study of how a society uses its scarce resources to produce and distribute goods and services
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microeconomics
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the study of how consumers, businesses and industries collectively determine the quantity of goods and services demanded and supplied at different prices
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macroeconomics
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study of big picture issues in an economy
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natural resources
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land, forests, minerals, water and other tangible assets usable in their natural state
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human resources
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all the people who work in an organization or on its behalf
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capital
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the funds that finance the operations of a business as well as the physical, human made elements used to produce goods and services
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entrepreneurship
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combination of innovation, initiative, and willingness to take the risks required to create and operate new businesses
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scarcity
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a condition of any productive resource that has finite supply
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opportunity cost
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the value of the most appealing alternative not chosen
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economic system
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the policies that define a society's particular economic structure; the rules by which a society allocates economic resources
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five-market system
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economic system in which decisions about what to produce and in what quantities are decided by the markets buyers and sellers
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capitalism
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economic system based on economic freedom and competition
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planned system
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economic system in which the government controls most of the factors of production and regulates their allocation
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socialism
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economic system characterized by public ownership and operation of key industries combined with private ownership and operation of less-vital industries
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nationalizing
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a governments takeover of selected companies or industries
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privatizing
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turning over services once performed by the government to private businesses
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demand
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buyer's willingness and ability to purchase products at different price points
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supply
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a specific quantity of a product that the seller is able and willing to provide at various prices
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demand curve
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a graph of the quantities of a product that buyers will purchase at various prices
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supply curve
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a graph of the quantities of a product that sellers will offer for sale regardless of demand at various prices
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equilibrium point
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the point at which quantity demanded equals quantity supplied
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competition
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rivalry among businesses for the same customers
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pure competition
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a situation in which so many buyers and sellers exist that no single buyer or seller can individually influence market prices
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monopoly
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a situation in which one company dominates a market to the degree that it can control prices
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monopolistic comepetition
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a situation in which many sellers differentiate their products from those of competitors in at least some small way
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oligopoly
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a market situation in which a very small number of suppliers, sometimes only two, provide a particular good or service
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recession
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a period during which national income, employment and production all fall, defined as at least six months of decline in the GDP
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business cycles
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fluctuations in the rate of growth that an economy experiences over a period of several years
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unemployment rate
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the portion of the labor force (everyone over 16 who has or is looking for a job)
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inflation
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an economic condition in which prices rise steadily throughout the economy
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deflation
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an economic condition in which prices fall steadily throughout the economy
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regulation
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relying more on laws and policies then on market forces to govern economic activity
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deregulation
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removing regulations to allow the market to prevent excess and correct itself over time
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monetary policy
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government policy and actions taken by the Federal Reserve Board to regulate the nations money supply
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fiscal policy
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use of government revenue collection and spending to influence the business cycle
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economic indicators
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statistics that measure the performance of the economy
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consumer price index (CPI)
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a monthly statistic that measures changes in the prices of a representative collective of consumer goods and services
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producer price index (PPI)
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a statistical measure of price trends at the producer and wholesaler levels
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gross domestic product (GDP)
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the value of all the final goods and services produced by businesses located within a nation's borders: excludes outputs from overseas operation of domestic companies
