Participating in the Dynamic
Business Environment
Chapter 1
1
Chapter
THE FUTURE OF BUSINESS
Gitman & McDaniel
5th Edition
Prepared by
Deborah Baker
Texas 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 world’s economic
systems?
5 How can technological effectiveness help a firm reach
its goals?
Chapter 1
6 What are the trends in global competition?
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2
1
Learning Goal 1
How do businesses and
not-for-profit organizations
Chapter 1
help create our standard of living?
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3
THE NATURE OF BUSINESS
1
A business is an organization
that strives for a profit by
providing goods and services
desired by its customers.
Chapter 1
Businesses
Provide…
… Goods and services
that are the basis of our
standard of living
… Jobs, goods and
services that help
determine our quality of life
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4
Profit
1
Revenue
The money a company
earns from providing services
or selling goods to customers.
less
Costs
Expenses that a company
incurs from creating and
selling goods and services.
equals
Chapter 1
Profit
The money left over after
all expenses are paid.
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5
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.
Chapter 1
Not-for-profit
organizations
account for 28%
of economic activity
In the U.S.
Government is the
largest
not-for-profit group.
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6
1
Factors of Production
Natural Resources
Labor
Capital
Entrepreneurship
Chapter 1
Knowledge
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7
TRENDS IN BUSINESS
1
The Environment
of Business
Demographic
Change
Chapter 1
Entrepreneurs
Managers
Workers
Customers
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8
2
Learning Goal 2
How are social trends,
such as more women entering
Chapter 1
the workforce, affecting business?
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9
SOCIAL TRENDS
2
Attitudes
Social
Factors
Values
Lifestyles
Chapter 1


Growth of Component Lifestyles
Increase in Two-Income Families
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10
3
Learning Goal 3
How are demographic trends
creating new opportunities
Chapter 1
for business?
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11
DEMOGRAPHIC TRENDS
3
Age
Race
Demography
Ethnicity
Chapter 1
Location
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12
Key Age Groups
Chapter 1
3
Generation Y
Born between 1979-1994
Generation X
Born between 1965-1978
Baby Boomers
Born between 1946-1964
Older Consumers
Over 60 years of age
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13
3
Diversity in America
 U.S. is becoming a multicultural society
 Minorities constitute one-third of the
nation’s population
Chapter 1
 Minorities control $1 trillion in annual
spending
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4
Learning Goal 4
What are the primary features
Chapter 1
of the world’s economic systems?
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15
Chapter 1
4
EVOLVING GLOBAL ECONOMIC SYSTEMS
Capitalism
The private enterprise system
Command Economy
Communism
Socialism
Government ownership /control
Mixed Economies
More than one system
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16
5
Learning Goal 5
How can technological effectiveness
Chapter 1
help a firm reach its goals?
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17
Technological Trends
5
 Microelectromechanical systems (MEMS)
 Nanotechnology
Chapter 1
 Internet
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18
6
Learning Goal 6
What are the trends in
Chapter 1
global competition?
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19
6
TRENDS IN GLOBAL COMPETITION
 Advances in technology and communications
 Improvements in productivity
Chapter 1
 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 nation’s borders in a year.
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20