1. (c) 2012 McGraw-Hill Ryerson Ltd. Chapter 1 – Learning Objectives LO1 : A base-level understanding of what business is LO2 : Exposure to the 4 major components of the business model and their impact on an organization’s competitive advantage LO3 : An understanding of how businesses plan LO4 : An introduction to the difference between profit and profitability LO5 : Exposure to the importance of creating a well-differentiated value proposition as key to a business’s success LO6 : A cursory overview of the relationship between business strategy and tactics and the importance of successfully executing both for a business to achieve its identified objectives 2 of 30 Chapter 1 – What is Business?

2. Business Planning Cycle (c) 2012 McGraw-Hill Ryerson Ltd. 7 of 30 Chapter 1 – What is Business? LO4

3. Business Planning Cycle Execution The role of the business manager/owner is to recognize, anticipate, and sense an opportunity to create a product/service that is unique, important and of meaningful value to targeted customer(s) Fundamental to this challenge is a “Strategy and 3C Assessment” Strategy = The specific objectives an organization hopes to achieve during the planning cycle 3 C’s = Capabilities, Competencies, Capacity COMPETITIVE ADVANTAGE = The advantage an organization has over its competitors that enables it to generate more sales, achieve greater margins (on costs), achieve a lower cost base, and attract/retain more customers (c) 2012 McGraw-Hill Ryerson Ltd. 8 of 30 Chapter 1 – What is Business? LO4

4. Profit and Profitability PROFIT = Total Revenue – Total Expenses; is the “bottom line” result that an organization has realized for a given period of time PROFITABILITY = How well an organization is using its resources over a specific period of time to generate earnings relative to its competitors (c) 2012 McGraw-Hill Ryerson Ltd. 16 of 30 Chapter 1 – What is Business? LO4