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110 Cards in this Set
- Front
- Back
What are the advantages of a sole proprietorship?
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1. Owner retains all profit
2. Easy to form and dissolve 3. Owner has flexability |
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What are the disadvantages of a sole proprietorship?
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1. Unlimited financial liability
2. Financial limitations 3. Management deficencies 4. Lack of continuity |
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What are the advantages of a partnership?
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1. Easy to form
2. Can benefit from complementary management skills 3. Extended financial capacity |
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What are the disadvantages of a partnership?
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1. Unlimited financial liability
2. Interpersonal conflict 3. Lack of continuity 4. Difficult to dissolve |
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What are the advantages of a coorporation?
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1. Limited financial liability
2. Specialized management skills 3. Expanded financial capacity 4. Economies of scale |
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what are the disadvantages of a coorporation?
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1. Difficult and costly to form and dissolve
2. Tax dissadvantages 3. Legal Restrictions |
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What is comparative advantage?
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1.If you can make for less than you can buy you should make…if you can buy for less than you can make…you should buy
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not-for-profit organization
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A businesslike establishment that has primary objectives, such as public service, other than returning a profit to its owners.
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Bretton Woods Facts
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1. Small Town in New Hampshire
2. Economic Conference 3. 1944 4. 44 countries attended |
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Bretton Woods Focus
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1. Financial Issues
2. Stability 3. International Trade 4. Comparative Advantage |
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Adam Smith
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1. Wrote Wealth of Nations
2. Productivity and the invisible hand |
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competition
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battle among businesses for cosumer acceptance
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advantages of small organizations
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1. innovation
2. superior customer service 3. low costs 4. filling isolated market niches |
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disadvantages of small organizations
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1. management shortcomings
2. inadequate financing 3. government regulation |
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productivity
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relationship between the number of units produced and the number of human and other production imputs necessary to produce them.
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business
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all profit-seeking activities and enterprises that provide goods and services necessary to an economic system
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profits
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rewards for businesspeople who take the risks involved to offer goods and servies to customers
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factors of production
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four basic inputs for efective operation: natural resources, captial, human resources, and entrepreneurship
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private enterprise system
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economic system that rewards businesses for their ability to identify and serve the needs and demands of customers
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competition
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battle among businesses for consumer acceptance
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entrepreneur
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risk taker in the private enterprise system
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brand
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name, term, sign, symbol, design, or some combination that identifies the products of one firm and differentiates them from competitors' offerings
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relationship management
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collection of activities that build and maintain ongoing, mutually beneficial ties between a business and its customers and other parties
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value
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customer's perception of the balance between the positive traits of a good or service and its price
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customer satisfaction
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ability of a good or service to meet or exceed a buyer's needs and expectations
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productivity
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relationship between the number of units produced and the number of human and other production inputs necessary to produce them
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entrepreneurship
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the willingness to take risks to create and operate a business
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economics
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social science that analyzes the choices made by people and governments in allocating scarce resources
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microeconomics
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study of small economic units, such as individual consumers, families, and businesses
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macroeconomics
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study of a nation's overall economic issues, such as how an economy maintains and allocates resources and how government policies affect the standards of living of its citizens
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demand
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willingness and ability of buyers to purchase goods and services
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supply
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willingness and ability of sellers to provide goods and services
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private enterprise system
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economic system that rewards businesses for their ability to identify and serve the needs and demands of customers
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pure competition
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a market structure in which large numbers of buyers and sellers exchange homogeneous products, so no single participant has a significant influence on price.
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monopolistic competition
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a market structure in which large numbers of buyers and sellers exchange relatively well-differentiated products, so each participant has some control over price.
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oligopoly
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a market situation in which relatively few sellers compete and in which high start-up costs form barriers to keep out new competitors
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monopoly
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a market structure in which a single seller dominates trade in a good or service for which buyers can find no close subsitutes
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communism
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an economic system in which all property would be shared equally by the people of a community under the diretion of a strong central government
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socialism
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an economic system which is characterized by government ownership and operation of major industries, but allows private ownership in industries considered less crucial to social welfare.
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recession
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cyclical economic contraction that lasts for six months or longer
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planned economy
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government controls determine business ownership, profits and resource allocation to accomplish government goals rather than those set by individual businesses.
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productivity
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relationship between the goods and services produced in a nation each year and the inputs needed to produce them.
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inflation
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rising prices caused by a combination of excess consumer demand and increases in the costs of raw materials, human resources, and other factors of production
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monetary policy
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government action to increase or decrease the money supply and change banking requirements and interest rates to influence bankers' willingness to make loans
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fiscal policy
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government spending and taxation decisions designed to control inflation, reduce unemployment, improve the general welfare of citizens, and encourage economic growth.
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budget
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organization's plan for how it will raise and spend money during a given period of time
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exports
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domestically produced goods and services sold in other countries
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imports
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foreign goods and services purchased by domestic customers
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balance of trade
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difference between a nation's exports and imports
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balance of payments
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difference in money flows into or out of a country.
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exchange rate
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value of one nation's currency relative to the currencies of other countries
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tariff
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tax imposed on imported goods
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World Trade Organization (WTO)
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135-member international institiution that monitors GATT agreements and mediates international trade disputes
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North American Free Trade Agreement (NAFTA)
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1994 agreement among the U.S., Canada, and Mexico to break down tariffs and trade restricitons.
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European Union (EU)
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24-nation European economic alliance
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multinational corporation (MNC)
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firm with significant operations and marketing activities outside its home country
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global business strategy
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offering a standardized, worldwide product and selling it in essentially the same manner throughout a firm's domestic and foreign markets.
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multidomestic business strategy
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developing and marketing products to serve different needs and tastes of separate national markets.
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small business
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firm that is independently owned and operated, not dominant in its field, and meets industry-specific size standards for income or number of employees
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business plan
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written document that provides an orderly statement of a company's goals, the methods by which it intends to achieve those goals, and the standards by which it will measure achievements.
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Small Business Administration (SBA)
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federal agency that assists small businesses by providing management training and consulting, financial advice, and support in securing government contracts.
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business incubator
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organization that provides low-cost, shared facilities on a temporary basis to small start-up ventures
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franchising
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contractual agreement that specifies the methods by which a dealer can produce and market a supplier's good or service.
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sole proprietorship
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form of business ownership in which the company is owned and operated by one person
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partnership
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form of business ownership in which the company is operated by two or more people who are co-owners by voluntary legal agreement
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corporation
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business that stands as a legal entity with assets and liabilites separate from those of its owner(s)
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stockholder
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person or organization who owns shares of stock in a corporation
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board of directors
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elected governing body of a corporation
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merger
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combination of two or more firms to form one company
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acquisition
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procedure in which one firm purchases the property and assumes the obligations of another
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entrepreneur
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person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business
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classic entrepreneur
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person who identifies a business opportunity and allocates available resources to tap that market
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intrapreneur
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entrepreneurially oriented person who develops innovations within the context of a large organization
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change agent
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manager who tries to revitalize an established firm to keep it competitive
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seed captial
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initial funding needed to launch a new venture
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debt financing
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borrowed funds that entrepreneurs must repay
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equity financing
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funds invested in new ventures in exchange for part ownership
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venture capitalists
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business firm or group of individuals who invest in new and growing firms
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angel investors
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wealthy individuals who investdirectly in a new venture in exchange for an equity stake
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intrapreneurship
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process of promoting innovation within the structure of an existing organization
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4 Business Environments
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1. Legal and Regulatory
2. Social and Cultural 3. Competitive and Technological 4. Economic and Political |
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Legal and Regulatory Environment
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1. ensures competition
2. employment practicies 3. environment and product safety |
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Social and Cultural Environment
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1. demographics
2. lifestyle 3. changing values |
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competitive and Technological Environment
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1. using technology
2. change and flexibility 3. workforce skill 4. research and development 5. exponential changes over time |
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Economic and Political Environment
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1. supply-side vs. keynesian economics
2. republicans vs. democrats 3. global economy |
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Demographics
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1. aging of America
2. increasing minority populations 3. declining birthrate |
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Lifestyle
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1. time conscious
2. delaying marriage 3. more divorce |
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Changing Values
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1. no longer homogeneous
2. more diversified 3. huge media role |
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Stages in Business
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1. production
2. product 3. selling 4. marketing 5. social responsibility |
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Production Stage
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mass production
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Product Stage
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1. color
2. size 3. improvement |
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Selling Stage
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1. pressurized sales
2. getting people to buy stuff 3. post world war 2 |
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marketing Concept Stage
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1. find out what people want before we make it
2. market research |
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Social responsibility
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1. Present?
2. legal or illegal 3. responsible or irresponsible |
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Pure Competition
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1. hard to differentiate
2. natural resource 3. lots of suppliers 4. no control of price |
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Monopolist Competition
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1. product differentiation
2. some control of price 3. retail items |
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Oligopoly
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1. few large competitors
2. barriers to entry 3. more control over price |
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monopoly
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1. regulated entities
2. one provider 3. complete control over price |
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Serendipity
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something that happens by accident
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Cybernetics
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goal-oriented action
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Accomplishment of Bretton Woods Conference
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1. created world bank
2. created International Monetary Fund 3. fixed the price of gold |
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Problems with Comparative Advantage
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1. monoplies formed
2. alternative products caused disruptions 3. man-made advantages not counted on 4. goal was a static environment but problems caused dynamicenvironment |
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older organization
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1. set culutre
2. bureaucracy 3. limited high-impact opportunities |
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younger organization
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1. constant change
2. more work 3. contribution significance |
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small organization
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1. growth potential
2. cross-trained 3. relate to finished product 4. limited resources 5. risky (less stable) |
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large organization
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1. stable
2. more resources 3. pigeon-holed |
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for profit organization
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1. money is primary score card
2. private risk |
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not for profit organization
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1. primary mission is betterment of society
2. must operate in the black 3. private business concepts are necessary |
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manufacturing
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1. convertingraw materials
2. value added 3. high paying 4. technical skills 5. union based 6. heavy cost of entry 7. decline |
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service
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1. one owner; profits
2. lower wages for many 3. low-to-no value added 4. lower skills needed 5. time conscience 6. reflect higher standards of living 7. dramatic increase |