1. IB BUSINESS MANAGEMENT Topic 1/Section 1.1 Introduction to Business Management

2. THE ROLE OF BUSINESS… A Business aims to meet the needs and wants of individuals or organizations. HUMAN/ LABOR PHYSICAL/LAND/ NATURAL FINANCIAL/ CAPITAL ENTERPRISE/ ENTREPRENEURSHIP PRODUCTION GOODS SERVICES

3. RESOURCE INPUTS (FACTORS OF PRODUCTION) HUMAN (Labor) –The right quality and quantity of people required to make the product or provide the service. PHYSICAL (Land) – The right quality and quantity of materials, machinery, and land space required to make the product or service. FINANCIAL (Capital) – The right quality and quantity of cash and other forms of money required to make the product or service. ENTERPRISE (Entrepreneurship) – Innovative, risk-taking. Creative ideas. The least tangible.

4. PRODUCTION PROCESSES… Capital Intensive These processes use a large proportion of land or machinery relative to other inputs, especially labour. Can you name the types of businesses that are “capital intensive”? What does “proprietary” mean? Labo(u)r Intensive These processes use a large proportion of labo(U)r relative to land or machinery. Can you name the types of business that are “labour intensive”? Are the workers typically low skilled or high skilled?

5. PRODUCT OUTPUTS… Goods Tangible products that we can physically take home. We can touch, feel, and hold them. These are produced in the primary and secondary sectors. Name examples please. Services Intangible products that the buyer cannot physical touch or hold, or carry home. Name examples please.

6. THE FOURS FUNCTIONS OF A BUSINESS…. (p4) Human Resources FINANCE/Accts Marketing Operations/ production

7. BUSINESS SECTORS 1.1

8. THE 4 SECTORS OF BUSINESS ACTIVITY- WHAT IS A SECTORAL CHANGE? GOODS PRIMARY: All raw materials are acquired in the primary sector i.e. mining, farming, fishing, hunting, trapping, extraction. The scarce nature of resources/environ. concerns cause regulation. SECONDARY: Where raw materials are processed/manufactured. Can be durable or non-durable goods. Competition from “developing nations”. SERVICES TERTIARY: Services QUATERNARY:A subgroup of Tertiary, this sector provides services focused on knowledge, involving IT, media, and web-based services.

9. GROWTH AND INTEGRATION Horizontal Integration Horizontal Growth refers to a business acquiring or merging with another business engaged in more or less the same activity. Examples: two airlines merge, a grocery store purchases another grocery store. Outcome: new business will have increased market share. Vertical Integration Vertical Growth occurs when a business in another stage of the chain of production OR by internal growth. >Backward vertical integration (lumber seller buys forest to harvest on trees) >Forward vertical integration (farmer opens store to sell his own products)

10. SECTORS AND INTEGRATION-WHY? To lower cost, ensure supply, avoid government regulation, increase market power, weaken competitors SECONDARY TERTIARY QUATERNARY PRIMARY Integration Backwards vertical Forwards vertical Horizontal

11. PROVIDING INNOVATIVE IDEAS-VITAL TO BUSINESS- PROVIDING THE IMPETUS/MOTIVATION Intrapreneur An individual employed by a large organization who demonstrates entrepreneurial thinking in the development of new products and services. Entrepreneur An individual who demonstrates enterprise and initiative in order to make a profit. Usually self-employed.

12. WHAT DO ENTREPRENEURS/INTRAPRENEURS DO? HOW? Market Reading- Need Seeking- Technology Driving-

13. STARTING A BUSINESS 1.1

14. WHY WOULD I START A BUSINESS? 1) Rewards 2) Independence 3) Necessity 4) Challenge 5) Interest 6) Finding a Gap 7) Sharing an idea

15. THE PROCESS/STEPS OF STARTING A BUSINESS… POSSIBLE PROBLEMS… 1) Organizing the Basics 2) Market Research 3) Planning 4) Legal Requirements 5) Financing Describe each step. Problems? p13

16. NOW YOU WRITE A BUSINESS PLAN: 6 ELEMENTS The business idea, aims, objectives Business organization Human resources Finance Marketing Operations Use Table 1.1.5 Form a group of 6. Choose a group leader-all documents will be sent to this person for proofreading and compilation. Google Docs Due Date: