+ WOW 3 Economic Systems and Business Operations

+ Planned (or Directed) Economy Definition - Resources are owned and controlled by the government. In a Planned Economy – all phases of the economy and plans will be done using military and the police force if necessary. The average citizen has little or limited freedom.

+ Market Economy Definition - Consumers and businesses make economic decisions based on their own interests. Generally Market Economies are found in countries that have democratic forms of government.

+ Private Enterprise Definition - A system in which most economic resources are privately owned and decisions about production and distribution are largely made by voluntary exchange in the marketplace. Capitalism – private enterprise, private property, profit, competition and freedom of choice

+ Manufacturer Definition - Take products or raw materials and changes them into a form that consumers can use. Examples – Cotton mill in N.Carolina takes cotton from Alabama farm – spins the yarn into cloth – sells cloth to a Levi’s in SF…

+ Marketer Definition - A business that is involved with moving goods from producers to consumers. Example – identify, develop and test new products. Package and store goods, etc…

+ Service Business Definition - A firm that does things for you instead of making or marketing products. Projected that 3 out of every 4 workers will hold jobs in the service industry. Some serve individuals and some serve businesses

+ Franchise Definition - A written contract granting permission to sell someone else’s product or service in a prescribed manner, over a certain period of time and in a certain territory. Examples – Subway, etc.

+ Joint Venture Definition - Two or more companies form an alliance to perform various business activities. Often using each others strengths. Example – Jeep and Eddie Bauer – Doritos and Taco Bell

+ Mass Production Definition - A large number of identical products are assembled using a continuous efficient process. Examples - Assembly line – beverage bottling plants.