Participating in the Dynamic

Business Environment

Chapter
1
THE FUTURE OF BUSINESS
Gitman & McDaniel
5th Edition
Chapter 1
 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?
6 What are the trends in global competition?
Chapter 1

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 1 Learning Goal 1

How do businesses and

not-for-profit organizations
help create our standard of living?
Chapter 1

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 1 THE NATURE OF BUSINESS

A business is an organization
that strives for a profit by
providing goods and services
desired by its customers.

… Goods and services

Businesses that are the basis of our
Provide… standard of living

… Jobs, goods and

services that help
Chapter 1

determine our quality of life

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 1 Profit
The money a company
Revenue earns from providing services
or selling goods to customers.
less

Expenses that a company

Costs incurs from creating and
selling goods and services.
equals

The money left over after

Profit all expenses are paid.
Chapter 1

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 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.
Not-for-profit
organizations
account for 28%
of economic activity Government is the
In the U.S. largest
not-for-profit group.
Chapter 1

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 1 Factors of Production

Natural Resources

Labor

Capital

Entrepreneurship

Knowledge
Chapter 1

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 2 Learning Goal 2

How are social trends,

such as more women entering
the workforce, affecting business?
Chapter 1

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 2 SOCIAL TRENDS

Attitudes

Social
Values
Factors

Lifestyles

 Growth of Component Lifestyles

 Increase in Two-Income Families
Chapter 1

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 3 Learning Goal 3

How are demographic trends

creating new opportunities
for business?
Chapter 1

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 3 DEMOGRAPHIC TRENDS

Age

Race
Demography
Ethnicity

Location
Chapter 1

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 3 Key Age Groups

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

Chapter 1

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 3 Diversity in America

 U.S. is becoming a multicultural society

 Minorities constitute one-third of the nation’s
population
 Minorities control $1 trillion in annual spending
Chapter 1

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 4 Learning Goal 4

What are the primary features

of the world’s economic systems?
Chapter 1

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 4 EVOLVING GLOBAL ECONOMIC SYSTEMS

Capitalism The private enterprise system

Command Economy Communism

Socialism Government ownership /control

Mixed Economies More than one system

Chapter 1

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 5 Learning Goal 5

How can technological effectiveness

help a firm reach its goals?
Chapter 1

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 5 Technological Trends

 Microelectromechanical systems (MEMS)

 Nanotechnology

 Internet
Chapter 1

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 6 Learning Goal 6

What are the trends in

global competition?
Chapter 1

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 6 TRENDS IN GLOBAL COMPETITION

 Advances in technology and communications

 Improvements in productivity

 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.
Chapter 1

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