1. Chapter 1 The Nature of Business

2. What’s so good about business?

3. Doing business is exciting Satisfaction of creating new products/services Excitement of the dynamic (changing) environment Use of new technology

4. Business can offer financial rewards

5. Business can offer psychological rewards Personal accomplishments Leading a successful organizational team Business can be fun

6. Businesses need good leadership Leaders must: –Be visionaries –Be promoters of change –Build people up –Inspire people to give their best –Set the moral tone for the business Leaders must: –Be visionaries –Be promoters of change –Build people up –Inspire people to give their best –Set the moral tone for the business Leaders need: –Communication skills –Motivation skills –Conviction –Flexibility –Integrity Leaders need: –Communication skills –Motivation skills –Conviction –Flexibility –Integrity

7. Focus on 3 Companies Dell – manufacturing company Best Buy – retail company Southwest Airlines – service company

8. Company Profile: –Started by Michael Dell at age 19 on a $1000 loan. –2001 fiscal year ended with $38.1 billion in revenues, a 26% increase FY 2000, and net profits of $2.3 billion. –Manufacturing plants are in Austin, TX & Nashville, TN and in Brazil, Ireland, China & Malaysia. –Dell uses a “direct-to-customer” business model. –Dell uses no retailers or other resellers, who add time and cost to the product. –Dell maintains little stock or inventory –Dell is recognized for award-winning customer service. Company Profile: –Started by Michael Dell at age 19 on a $1000 loan. –2001 fiscal year ended with $38.1 billion in revenues, a 26% increase FY 2000, and net profits of $2.3 billion. –Manufacturing plants are in Austin, TX & Nashville, TN and in Brazil, Ireland, China & Malaysia. –Dell uses a “direct-to-customer” business model. –Dell uses no retailers or other resellers, who add time and cost to the product. –Dell maintains little stock or inventory –Dell is recognized for award-winning customer service. © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill

9. Company Profile: –Started by Richard Schulze in 1983. –Best Buy is the nation’s largest retailer of consumer electronics and appliances. –In 2002, it had 1,900 stores generating $20 billion in revenue and $500+ million in profits. –Best Buy sells to customers in the U.S., Canada, Puerto Rico, and the U.S. Virgin Islands. Company Profile: –Started by Richard Schulze in 1983. –Best Buy is the nation’s largest retailer of consumer electronics and appliances. –In 2002, it had 1,900 stores generating $20 billion in revenue and $500+ million in profits. –Best Buy sells to customers in the U.S., Canada, Puerto Rico, and the U.S. Virgin Islands. © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill

10. Company Profile: –Started by Herb Kelleher and Rollin King as an intrastate airline in Texas. –Southwest Airlines has 29 years of consecutive profits. –It is #2 in Fortune magazine’s list of Most Admired Companies. –It is the only airline that did not lay off employees as a result of the September 11,2001 tragedy and the faltering economy. –It is nationally recognized for its on-time performance. Company Profile: –Started by Herb Kelleher and Rollin King as an intrastate airline in Texas. –Southwest Airlines has 29 years of consecutive profits. –It is #2 in Fortune magazine’s list of Most Admired Companies. –It is the only airline that did not lay off employees as a result of the September 11,2001 tragedy and the faltering economy. –It is nationally recognized for its on-time performance. © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill

11. Technology is Changing Business E-commerce revolution is in the early phases In 2003, 75 million American consumers spent $100 billion purchasing products and services on the Internet In 2007, consumer spending is expected to be around $250 billion and businesses will complete another $5.4 trillion in online transactions (eMarketer, 2003)

12. How is e-commerce different from traditional commerce? Ubiquitous (available everywhere, all the time) Expands global reach (across cultural/national boundaries) Operates according to universal standards (lowers market entry for merchants and search costs for consumers) Interactive (between technology and user) Increases information density (amount and quality of information available to all market participants) Permits personalization/customization

13. 13 Major Types of E-commerce

14. 14 The Growth of the Internet, Measured by Number of Internet Hosts with Domain Names

15. 15 NRF/Forrester Online Retail Index, December 2002 Table 1.6, Page 37

16. 16 Fastest Growing Non-Travel E-commerce Categories 2002

17. 17 Top 25 Shopping Web Sites for Week Ending November 10, 2002

18. The OPEN SYSTEMS APPROACH to Studying Business Business, like any other system – education or government – both impacts and is impacted by all other systems. Business leaders must consider these impacts in the decision making process. © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill