INTRODUCTION TO BUSINESS
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Transcript of INTRODUCTION TO BUSINESS
Business Environment
UNIT – 1Contents: Concept, Nature and Scope of
Business Business Organization Industry and Types Economy-Industry-Company
Interface Relevant Environment.
Concept of Business Business may be defined as an economic activity involving
the purchase, production and sale of goods and services with a motive of earning profits by satisfying human needs in society.
Business may be understood as the organized efforts of enterprises to supply consumers with goods and services for a profit
1884: Established by Dr S. K. Burman in Calcutta. In 1896, first production unit set up at Garia, Calcutta
Business may be defined as an economic activity involving
the purchase, production and sale of goods and services with a motive of earning
profits by satisfying human needs in society.
An economic activity
Production or procurement of
goods and services
Sale or exchange of goods and services for the satisfaction
of human needs
Dealings in goods and services on a
regular basisProfit earning
Uncertainty of return
Element of risk
Nature of Business
It’s an organized efforts of enterprises to supply consumers with goods & services for a profit
Purpose of business goes beyond earning profit
Characteristics of Business
Characteristics of
Business
Change
Large Size
Diversification
GlobalizationTechnology
Information
Competition
Government Control
BRITANNIA(1892)1892: A biscuit-making operation begins in a small house in Calcutta with an investment of Rs 295
1939-45: Britannia supplies biscuits to soldiers during World War II
1983: Sales cross Rs 100 crore
1993: Nusli Wadia of Bombay Dyeing takes control from Britannia Chairman Rajan Pillai, with the help of French food giant Danone
2009: Wadia buys out Danone and emerges the largest shareholder
Business Objectives
Vision: Vision is a broad & hazy explanation of why the firm exists & where it is trying to march ahead. Vision is beacon of light.
Business Objectives
Mission: It seeks to give a definite meaning to vision. If vision seeks to answer the question “where do we go from here” , mission answers “what business we are in right now?
Objectives
Objectives render mission statements more concrete. It makes mission statements more clear & specific. Represents the operational side of an organization.
Economic objectives
Improving
productivity
Earning
profits
Mar
ket
stan
ding
innovation
Objectives of business
It refers to the position of an
enterprise in relation to its competitors.
Every business must earn a reasonable
profit to survive and grow.
Every business enterprise must aim at greater productivity to ensure continuous survival and growth.
Business requires physical resources and financial resources to produce goods and services.
Physical & financial resources
It means introduction of new ideas or methods for producing goods and services.
Avoidance of anti-social
and unfair trade practices
Supply of desi
red
quality of p
roducts
Com
mun
ity
serv
ice G
eneration of
employm
ent
Welfare of employees
Large business units should undertake
community services like setting up
charitable dispensaries,
schools etc.
Business should produce and sell
products of proper quality to satisfy
custmer expectations
Business should generate employment opportunities to the disadvantaged sections of the society(e.g. physically handicapped people).
Social objectives
A businessman should avoid hoarding, black marketing, over charging, misleading advertisements etc.
Business should provide good working conditions and pay satisfactory wages/salaries to its employees.
industry
primary
These industries are
connected with:The
extraction and production of
natural
resources
Reproduction and
development of
living organisms .
Secondary industry
These industries are
concerned with :
using the materials
extracted at the primary
stage to produce goods
for final consumption of for further processing by
other industrial
units.
Tertiary industry
These industries provide service
facilities.
Primary industry
Extractive
These industries extract or draw out
various products from natural resources.
Farming
Mining
Fishing
Genetic
Genetic means heredity or parentage.
these industries involve breeding or
reproduction of plants and animals.
Cattle
breeding farm
s
Poultry
farms
pisciculture
Secondary industry
Manufacturing industry
These industries convert raw materials or semi-finished products into
finished products.
Analytical industry:
basic
raw material
is analysed
or separate
d into
a number of
products
.
An oil refinery separates crude oil into kerosene, diesel,
petrol.
Synthetical industry: two
or mor
e materials are combined or mixe
d together to
manufacture
a new product.
Cement, soaps, plastics, paints, fertilizers etc.
Processing industry:
involves successive
stages for
manufacturin
g finished products
.
Sugar, paper
Assemblin
g industry: various components or
parts
are brough
t together to produce a finished product
TV, car, computer, watches etc.
Construction industries
These industries are engaged in construction of buildings, bridges, roads, dams, canals
etc using the products of extractive and manufacturing
industries like bricks, sand, cement, Iron and steel wires
etc.
commerce
trade
Trade refers to buying and selling of goods and services with the objective of earning
profit.
Auxiliaries to trade
Activities which are meant for assisting trade are known as auxiliaries to
trade.
Types of trade
Internal trade: which takes place within a country
Wholesale trade
Wholesale trade refers to buying and selling of goods and services in large quantities for the
purpose of resale or intermediate use.
Retail trade
Retail trade refers to buying of goods and services in relatively small quantities; and
selling them to ultimate consumers.
External trade: which takes place between two or more
countries.
Import trade
If goods are purchased from
another country, it is called import trade.
Export trade
If goods and services are sold to other countries, it
is called export trade.
Entrepot trade
Where goods are imported for export to other countries, it is called entrepot
trade.
Auxiliaries to tradeTransport and communication• Transport(road,rail or
coastal) facilitates movement of –raw materials to the place of production,and –the finished goods from factories to the place of consumption
• Communication facilities like postal services and telephone facilities enable businessmen to exchange information with one another.
Banking and finance• Business needs funds
for acquiring assets, purchasing raw materials and meeting day-to-day expenses.
• Necessary funds can be obtained by businessmen from commercial banks.
• Thus banking helps business activities overcome the problem of finance.
Warehousing• It refers to the
holding and preservation of goods until they are finally consumed.
• It helps business firms to overcome the problem of storage of goods and facilitates the availability of goods when needed.
• Warehousing creates time utility.
Advertising• Advertising brings
goods and services to the knowledge of prospective buyers.
• With the help of such knowledge, consumers can obtain better value for their money
• Thus, advertising helps to promote the sale of products like electronic goods, automobiles, soaps etc by providing information about them.
CHARACTERISTICS OF CONTEMPORAY BUSINESS
Business in transitionBigger role for governmentCompetitionOpportunitiesManagement as a scienceGlobalizationWaning trust