IB Business Unit 1

The process of enhancing a product or service to increase its worth or appeal to customers, often through improvements in quality, features, or functionality.

Entities that engage in commercial activities and aim to generate profit by providing goods or services to customers.

The ones who actually use a product.

The ones who purchase the product, not necessarily using it.

Individuals who start and manage their own businesses, taking on financial risks in order to pursue opportunities and create innovative solutions in the market. They are driven by a strong desire for independence, success, and the ability to make a positive impact on society.

The collective knowledge and experiences of entrepreneurs, and the process of starting and running one’s own business.

Specific items that one can physically purchase/use.

The basic necessities that a person needs to survive.

Business involved in the cultivation/extraction of natural resources.

Businesses that are involved with the production and manufacturing of certain products.

Businesses involved with the provision of services.

A sub-category of the Tertiary Sector that offers knowledge based services to the general public.

Intangible products sold to costumers.

The process of creating goods and/or services, adding value in the process.

specific things one would like to have.

• Capital

• enterprise

• land

• labour

*add Value to item

• H.R

• Finance

• marketing

• Operations management

• the Good or Service

• H.R, responsible for workforce

• Finance, responsible for gaining capital/and staying in legal boundaries

• marketing, responsible for finding what the costumers are looking for and how to sell it

• operations management, responsible for overlooking workforce operations/practices

1. product

2. price

3. place

4. promotion

5. people

6. processes

7. physical evidence

1. extraction

2. Manufacturing

3. services

4. consumers

Primary Sector’s purpose, obtain raw materials

Secondary Sector, convert raw materials into a product

Tertiary, or Quaternary

for-profit social enterprises that are run by their own members, employees, and/or customers of a certain status in the company that work towards the business goal.

a limited liability business that is owned by shareholders

There is a difference between the owners of a business and the company itself

When a business sells its stocks for the first time on the stock exchange.

a restriction on the amount of money that an owner can lose if the business claims bankruptcy.

private sector not for profit social enterprises that operate for the benefit of others.

private sector businesses owned by an entity of 2 or more people

part of the economy run by private individuals and businesses rather than the government

a business owned by shareholders, with limited liability but who shares can’t be bought by or sold to the general public. shareholders have to be approved by the business owners.

owned by the government

self-employed person who runs a business on their own

you can lose any/everything

the legal documents that are signed claiming you are in a partnership with another

revenue generating companies with social objectives

• make a surplus

• use the surplus to benefit a part of society (TOMs)

provide businesses w/ a targeted direction for the future

vision/mission/strategies/tactics

• market standing: how much presence the company has in the industry

• image: consumer beliefs and conceptions of a firm

• market share: firm’s revenue as a percentage of all that’s made in the industry.

the conscientious consideration of ethical and environmental practice related to business activity.

anyone who has a direct interest in your company!

internal and external

members of the firm. employees, managers/directors, shareholders (those with stocks)

anyone has an interest in a company’s succession, good or bad! Customers, Suppliers, financiers (banks), pressure groups, competitors

when the avg. cost of production decreases as the organization increases the size of its operations

when a company becomes to large it has production inefficiencies and avg. costs increase.

inside the firm/within the firms control

1. technical, machinery and mass production

2. financial, borrow large sums from banks with lower interests

3. managerial, experienced managers

4. specialization, specialized labour

5. marketing, sell items in bulk, advertising

6. purchasing, buy resources in bulk, some discounts

7. risk-bearing, some risks are covered by other areas of benefit

the entire industry

1. technological progress, innovation

2. improved transportation networks, better infrastructure=better for economy

3. abundance of skill, training facilities and education

4. regional specialization, certain countries are known for certain specialites

1. high rent

2. local market conditions

3. traffic

4. context specific problems

a business grows by using its own capabilities and resources

growth through dealing with the outside organizations

economies of scale, lower prices, brand recognition, customer loyalty

cost control, more control, financial relief, government aid, flexibility

• mergers and acquisitions (m & a’s)\

  merger= 2 firms combine

  acquisitions= 1 company buys another with agreement of board

• Takeovers (hostile takeovers)= company buys another without the agreement of the boards

• Joint Ventures (JV’s)= 2 companies split costs and risks, for a specific amount of time

• Strategic alliances (SA’s)= 2 or more firms cooperate in a business venture for mutual benefit

• Franchising= person/business gets a license to trade using another firm’s name

  Franchisor, sells

  Franchisee, buys

an organization operating in 2 or more countries

the countries that let a multinational company work there

the value of a country’s annual output or national income

measures imposed by a country to reduce the competitiveness of imports (tariffs)