Pre Midterm Flashcards
(153 cards)
1
Q
Business
A
An organization that seeks profit by providing goods and services to satisfy society’s needs
2
Q
Goods
A
Are physical, tangible products that we can see and touch. Examples include, tables, clothing, foods, cars, etc
3
Q
Services
A
Are intangible offerings that we experience or use. Examples include hospitals, governments, lawyers, stylists and etc.
4
Q
Standard of living
A
The amount of products available, the wealth of the nation and lifestyle oppurtunities
5
Q
Quality of life
A
General level of human well-being and happiness including access to healthcare, education and food. How do we measure happiness?
6
Q
Risk
A
The chance that an investments actual return will be different than expected. Potential for losing resources (i.e. time, money) or be unable to accomplish organizational goals.
7
Q
Revenue
A
The money a company earns from providing services or selling goods to a customer
8
Q
Costs
A
Expenses for rent, salaries, supplies, transportation and many other items that a business incurs from creating and selling goods and services
9
Q
Profit
A
The money left over after all expenses are paid
10
Q
Non profit organization
A
An organization that typically exists to achieve a social goal or goals as opposed to the usual business goal of profit
Don’t pursue profits
11
Q
Five factors affect the business environment
A
- Political
- Economic and Competitive
- Social
- Technology
- International
12
Q
Political
A
The 3 levels of government in Canada have different roles and responsibilities that affect business (e.g. taxation, banking, healthcare)
13
Q
Economic and Competitive
A
Size and health of economy must be considered when making business decisions (e.g. when a nation’s economy or a business’s profit trend negatively). High levels of competition force businesses to cut costs, develop new products, increase marketing efforts.
14
Q
Social
A
Changes in demographics influence what products companies offer including age, gender, ethnicity, cultural diversity (e.g. diversity, baby boomers retiring)
15
Q
Technology
A
Technology innovation has changed how businesses produce and distribute goods and how we communicate (e.g., social media)
16
Q
International
A
Access to global markets increases competition and need to enhance skills (e.g., China leads in electronics manufacturing)
17
Q
Federal Government has the Authority over:
A
Money and banking
Trade regulations
External Relations
Defense
Criminal Law
Employment Insurance
Copyrights
Transportation
18
Q
Provincial and Territorial Governments- Responsibilities
A
Protecting rights
Administration of labour laws
Education
Health and welfare
Protection of property and civil rights
Natural resources
Environment
Labour laws include: minimum working standards such as minimum wages, vacations, statutory holidays and over time.
19
Q
Municipal Government
A
Delivering the services such as:
Water
Sewer
Waste Collection
Encourages: economic development
Bylaws=regulation
20
Q
Governments as tax agents
A
Income taxes, sales taxes, property taxes and sin taxes.
The federal government provides significant financial support to assist the provinces and territories to provide the program and services they are responsible for in the form of transfer payments.
21
Q
Three main transfer payments (equalizing wealth) include
A
Canada’s health transfer (CHT)
Canada social transfer (CST)
Equalization program
22
Q
Government as regulators
A
Protect Canadian interested
Create competition
Protect the consumer
Promote social programs
Protect the environment
23
Q
Governments as providers of essential services
A
Reliable National Defense
Transportation means: roads
Hospitals
Economic development
Safe drinking water
Effective Police service
24
Q
Patents
A
Gives an inventor the exclusive right to manufacture, use and sell an invention for 20 years: need to meet requirements of being new, unique and useful. Protests authors, inventors and creators.
Includes: printed material (books, magazine articles, lectures), works of art (art, photographs, and movies)
25
Trademarks
A design, name or other distinctive mark that is used to identify products.
Creates uniqueness in the minds of consumers
26
Consumer protection
Consumerism
Warranties
Product liability law
Competition Act
27
Consumerism
Reflects the struggle for power between buyers and sellers. Movement seeking to increase rights and power.
28
Competition Act
Parallel pricing
Quota selling
Market sharing
Product specialization
29
Bankruptcy
The legal act by which individuals or businesses that cannot meet their financial obligations are relieved of some, if not all, of their debt.
30
Deregulation
The removal of rules and regulations governing business competition
31
Income taxes
Based on income of businesses and individuals
32
Property taxes
Imposed on real and personal property and based on an assessment
33
Payroll taxes
Collected by the employer and remitted to the federal government (deductions)
34
Sales taxes
Levied on goods and services when they are sold (Percentage of the price)
35
Excise taxes
Taxes imposed on specific items like gasoline, alcohol and tobacco
36
Economic Systems
Determine how wealth is made and distributed in a country:
Affects business opportunities to make income and create wealth
Affects the choices of consumers and the prices they pay
37
Economy
The way in which people deal with the creation and distribution of wealth
38
Economics
The study of how society uses resources to produce and distribute goods and services
39
Macroeconomics
The sub-area of economics that focuses on the economy as a whole by looking at aggregate data for large group of people, companies or products
40
Microeconomics
The sub-area of economics that focuses on individual parts of the economy such as households or businesses
41
Natural Resources
Commodities that are useful inputs in their natural state
42
Labor
Economic contributions of people
43
Entrepreneurs
Combination of natural resources, labour, and capital to produce goods and services
44
Knowledge
The combined talents and skills of the workforce
45
Capital
Inputs used to produce goods and services and get them to the customers
46
Capitalism
An economic system in which individuals own and operate the majority of businesses that provide goods and services
Invisible hand
47
Individual hand
A term created by Adam Smith to describe how an individual’s personal gain benefits others and a country’s economy
48
Free-Market Economy
An economic system in which businesses and individuals decide what to produce and buy and the market determines prices and quantities sold
49
Mixed Economy
An economic system where most land and business are privately owned but with various levels of government involvement
50
Command economy
An economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced and who owns and controls the factors of production
51
COMPETITION
Rivalry among businesses for sales to potential customers.
‘Affect the number of choices an individual has and the prices he or she pays for products of an industry: helps business owners and employees to choose effective business strategies
52
Market Structures
Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly
53
Perfect Competition
large # of small firms, similar products, available information, low barriers to entry/exit
Real world examples: Corn, wheat, peanuts, many agricultural products
54
Monopolistic Competition
many firms, differentiated substitutes, relatively easy entry.
Real world examples: clothing, shoes
55
Oligopoly
Few firms, large capital requirements (high barriers to entry)
Real world examples: Automobiles, cereals
56
Monopoly
1 firm controls all industry sales, no entry of new firms
Real world examples: Software protected by copyright, many local public utilities
57
Equilibrium price
Price at which the quantity demanded is exactly equal to the quantity supplied
58
Supply
The quantity of a product that producers are willing to sell at each various prices
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Demand
The quantity of a product that biuyers are willing to purchase at each of various prices
60
Economic Performance
Economies fluctuate between high and low points resulting in business cycles consisting of four phases:
1 peak or boom (economy is doing really well)
2. Recession or contraction (two or more consecutive three-month periods of a decline in a country’s GDP) unemployment rate increase
3. Depression
4. Expansion or recovery
Long ways from recovery to the peak
61
Measuring performance
Gross domestic product (GDP)
Price Indexes
Purchasing power
Unemployment rate
Housing starts, commodity prices, stock markets
62
Gross Domestic Product (GDP)
Total dollar value of all goods and services produced by all people within the boundaries of a country during a one year period. Growth in GDP increases employment and incomes (does not include exports)
63
Price Indexes
Inflation, disinflation, deflation, consumer price index (CPI), producer price index (PPI)- average prices of all the goods
64
Purchasing power
The value of what money can buy- all prices increased after COVID
65
Unemployment rate
Percentage of a country’s labour force unemployed at any time. Calculated as the number of unemployed divided by the number of people currently in the labour force (doesn’t include disabled people, retired or people choosing to stay at home)
66
Housing stars
One house for every 4 people
67
Commodity prices
What we buy in the wholesale markets (not the retail markets)
68
Stock markets
If it is up it means the economy is growing (people have enough money to invest in stock)
69
Inflation
Tracks the increase in general level of prices of goods and services over a period of time. To a total of 3% it is good for the economy, when it exceeds that it isn’t good.
It is always there
It’s good because it makes entrepreneurs more profitable and then cycles back into the economy
70
Deflation
Decrease in the price of goods and services; the opposite of inflation. Employment goes down
71
Consumer price index (CPI)
A monthly index that measures the changes in the prices of a fixed basket of goods typically purchased by typical consumer in an urban area
72
Two types of inflation
Demand pull inflation
Cost push inflation
73
Demand pull inflation
When demand for goods and services is greater than the supply
74
Cost push inflation
Triggered by increases in production costs
Supplies price increases, minimum wage increases, raw materials increases
75
Why do we need information for a business?
To make the right decisions
To be successful
76
Critical success factors
Encouraging creativity and innovation
Achieving Financial Performance
Gaining Employee Commitment
Providing value-quality products at a reasonable price
Achieving Financial performance
Meeting and Exceeding customers needs
77
SWOT Analysis
Internal: strength and weaknesses
External: Opportunities and threats
78
Situational analysis: PESTEL
Political
Economic
Social
Technological
Environmental
Legal
79
Porter’s Five Forces
Forces that shape competition within an industry:
1. Risk of new entry by potential competitors
2. Degree of rivalry among existing competitors
3. The bargaining power of buyers
4. The bargaining power of suppliers
5. The threat of substitute products (less substitutes, the threat is less and more substitutes the threat is more)
80
Three most critical stakeholder groups
Owners of the business
Employees of the business
Customers
81
Ratio analysis
Help to answer many questions concerning the company’s cash flows, liquidity, funding, return on investments, payback, net investment and net annual return
82
Cost/benefit analysis
Compare the costs and benefits of a particular decision
83
Corporate level startegy
Vision
Mission
Business level strategy
84
Vision
Clear, concise picture of the company’s future direction (used to guide and inspire)
85
Mission
Clear, concise articulation of how the company intends to achieve its vision and how it is different from the competition.
86
Business Level Strategy
Describes a company’s competitive position (market, product, service)
87
Future of analyzing a business
Customers
Environment
Society
88
Why do countries trade?
No one country can produce all the products that its people want and need
Nations who cannot produce what they want and need will want to trade with countries who can and have a surplus.
Some countries have an abundance of natural resources but lack the technological know how to retrieve them.
Other countries have the technology but lack the natural resources
Example- free trade
89
Free Trade
Is the movement of goods and services among nations without political or economic trade barriers
90
Why nations trade
Absolute advantage
Comparative advantage
91
Absolute advantage
The ability to produce a specific product more efficiently than any other nation
Or a country is the only provider of a product
92
Comparative Advantage
The ability to produce a specific product more efficiently than any other product
The concept that a country should specialize in the products that it can produce most readily and cheaply, and trade these for goods that foreign countries can produce most readily and cheaply
93
Why go Global
Earn additional profits
leverage a unique product or technological advantage
Potential for cost savings
Possess exclusive market information
Saturated domestic markets and excess capacity
94
Exports
Goods and services made in one country and sold to others
95
Imports
Goods and services that are bought from other countries
96
Balance of trade
The difference between the value of a country’s exports and the value of its imports during a certain time
97
Trade surplus
A Favourable balance of trade that occurs when a country exports more than it imports
98
Trade Deficit
An unfavourable balance of trade that occurs when a country imports more than it exports
99
Balance of payments
The difference between money coming into the country and money leaving the country
100
Currency exchange rate
Value of one currency in relation to another:
Economic factors impact exchange rate fluctuations
Interest rates
Inflation and economic strength
Balance of trade and trade flow
101
Licensing
The legal process allowing a company use a manufacturing process, franchise, trademark, patent, trade secret, or knowledge
102
Contract manufacturing
A foreign company manufacturers private label goods under a domestic company’s brand
103
Joint Ventures
Two or more businesses combine for a specific project or business venture
104
International Direct Investment
Active ownership of a foreign company/manufacturing/marketing facility
105
Fostering Global Trade
Anti dumping laws
World Trade Organization (WTO)
World Bank
International Monetary Fund (IMF)
106
Economic community
Organization of countries formed to promote free movement of resources and products among member nations (also referred to as regional economic integration- European Union (EU), United States- Mexico- Canada Agreement (USMCA), Asia Pacific Economic Cooperation (APEC))
107
Goals of economic communities
Reduce trade barriers
Increase flow of international trade
Promote peaceful relationships between countries
Provide Increased prosperity for the citizens of each member country
108
Barriers to International trade
Political considerations
Economic environment
Natural Barriers
109
Tariff Barriers
Tariff: a tax imposed on imported goods.
Protective tariff: make imports less attractive to buyers than domestic products
110
Non-tariff Barriers
Import Quota: limit on the quantity of a certain good that can be imported.
Embargo: a complete ban on imports or exports of a product.
Exchange controls: laws that require a company earning foreign exchange from its exports to sell the foreign exchange to a control agency.
Customs Regulations: regulations on products that are different from generally accepted international standards
111
Fear of Trade and Globalization
Canadians have lost jobs because of imports/production shifts
Others fear losing their jobs
Employers often threaten to export jobs when facing labour disputes with employees
Service and white-collar workers are increasingly seeing their operations moving offshore
Competition is beneficial for consumers but can hurt producers
Global Political/Economic Unrest: we are interconnected
112
Benefits of globalization
Productivity grows faster with a comparative advantage
Global competition keeps prices down, less likely to face inflation
Open economy spurs innovation
Export jobs often pay more than other jobs available
113
The future of the global marketplace
Canada- exporting our technologies
Canada- seeking new markets (resources, stable banking, business friendly)
The Emergence of BRICS economic power
Currency fluctuations
Global Competition
Global political/economic unrest
114
Sole Proprietorship
A business with one owner who is personally responsible for all aspects of the business
115
Partnership
A business with two owners
116
Corporation
A legal entity that is separate and distinct from its owners.
117
General partnerships
A partnership in which all partners share in the management and profit each can act on behalf of the company and has unlimited liability for all its business obligations
118
Limited Partnership
A partnership with one or more general partners who have unlimited liability, and one or more limited partners whose liability is limited to the amount of their investment
119
General Partners
Partners who have unlimited liability for all of the company’s business obligations and who control its operations
120
Limited Liability partnership (LLP):
A partnership in which each partner is protected from responsibility for the acts of other partners, and each party’s liability is limited to harm resulting from that party’s own actions.
121
Public corporation
A corporation whose shares are widely held and available to the general public.
122
Private Corporation
A corporation whose number of shareholders is limited; normally restricts the transfer of shares to third parties, and shares do not trade on a recognized stock exchange
123
Crown corporation
Government owned
124
Corporate governance
Owners/stockholders (elect board of directors)
Board of directors (hire officers)
Officers (set corporate objectives and select managers (supervise employees)
Employees
125
Cooperative
A legal entity typically formed by people with similar interests, such as suppliers or customers, to reduce costs and gain economic power; has limited liability, an unlimited lifespan, and elected board of directors, and an administrative staff, all profits distributed to the member-owners in proportion to their contributions
126
Joint ventures
Two or more companies form an alliance and agree to contribute resources to pursue a particular business project, sometimes for a specified time
127
Mergers
A business transaction that combines two or more companies into one new entity
128
Acquisitions
A corporate transaction where one company buys another company or its assets
129
Horizontal merger
A business combination between companies that compete in the same industry
130
Vertical merger
A combination of two or more companies that operate at different stages of a supply chain
131
Conglomerate merger
A combination of companies in different industries or geographic areas.
132
Hostile takeover
A type of acquisition where a company takes control of another company without the approval or consent of the target company’s board of directors
133
What is an entrepreneur
People with vision, drive, and creativity who are willing to take the risk of starting and managing a new business to make a profit or to challenge the scope and direction of an existing company
134
Classic Entrepreneurs
Accept the risks that come with starting their own companies based on innovative ideas
135
Multipreneur
Start a series of companies
136
Interpreneurs
Apply their entrepreneurial spirit within large corporation rather than starting companies of their own
137
Angel investors
Private individual investors or groups of experienced investors who provide early stage financing for start up businesses in exchange for ownership
138
Venture capital
Money invested in high growth companies that have significant potential. often receive an ownership interest and a voice in management
139
Crowdfunding
Inviting people to contribute to a business or project, via online platform
140
Franchises
A form of business based on a business arrangement between a franchiser, which supplies the product concept and the franchisee, who sells the goods or services of the franchiser in a certain geographic area
141
Famous Entrepreneurs
Steven Jobs
Walt Disney
Sam Walton
Oprah Winfrey
Anita Roderick
Elon Musk
Ingvar Kamprad
142
Canadian Entrepreneurs
John W. And Alfred Billes
J.W. Sobey
Alban Leon
Kenneth Colin Irving
N. Murray Edwards
Brett Wilson
Jim Treliving
Chip Wilson (lululemon)
Tonia Jahshann
143
Management
Coordinating people and other resources to achieve the goals of an organization
144
Leadership
The relationship between a leader and the followers who want real changes, resulting in outcomes that reflect their shared purposes
145
Managerial Process
Renewing/ Changing
Guiding Personnel
Coordinating Resources
Anticipating Change
146
Four functions of management
Planning
Organizing
Leading/Motivating
Controlling/ Evaluating
147
Strategic Planning
Broad
Long-range
Goal-setting
By top managers
148
Tactical Planning
Specific
Short-range
Objectives/identification
By lower managers
149
Contingency planning
Backup plans in case primary plans fail
150
Operational planning
Setting work standards and schedules
151
Mission Statement
A clear, concise articulation of how the company intends to achieve its vision-how it is different from its competition and the keys to its success
152
Strategic Planning process
Establishing an organization’s major goals and objectives and allocating resources to achieve them
153
Vision statement
A clear and concise outline of an organization’s values and goals that it would like to achieve
