MIE 201 TEST #1 STUDY GUIDE
Environments of Business - Answers - - economic
- market
- technological
- social
- legal and regulatory
market environment - Answers - - a company's target customers, the buying influences
that shape the behavior of those customers, and competitors that market similar
products to those customers
economic environment - Answers - - conditions and forces that affect the cost and
availability of goods, services, and labor and thereby shape the behavior of buyers and
sellers
- influences almost every decision a business makes
technological environment - Answers - - forces resulting from the practical application of
science to innovations, products, and processes
- changes have the ability to change every facet of business
disruptive technologies - Answers - - those that fundamentally change the nature of an
industry
- can be powerful enough to create or destroy entire companies
ex: music recording and playing devices changed the music industry
social environment - Answers - - population trends, social values and behaviors,
relationship of society and business AT LARGE (large scale)
stakeholders - Answers - - internal and external groups affected by a company's
decisions and activities
legal and regulatory environment - Answers - - laws and regulations that restrain,
support, and protect businesses at local, state, national, and international levels
(some industries are heavily regulated ex: electricity)
business - Answers - - any profit-seeking organization that provides goods and services
designed to satisfy customers' needs
not-for-profit organizations - Answers - - organizations whose primary objective is to
provide goods and services to society without the goal of making a profit
- also have to bring in revenue in order to satisfy their stakeholders' needs
,what is the driving force behind most businesses? - Answers - - the prospects of
earning profit and building assets
what are assets? - Answers - - can be defined as anything owned by the company that
can be of meaningful value (from patents and brand names to real estate and company
stock).
goods-producing businesses - Answers - - create value by making things most of which
are tangible
- tend to be capital intensive
service businesses - Answers - - create value by performing activities that deliver some
benefit to customers
- tend to be labor intensive
revenue - Answers - - money that a company brings in through the sale of goods and
services
business model - Answers - - a concise description of how a business intends to
generate revenue
profit - Answers - - the amount of money left over after expenses (all the costs involved
in doing business) have been deducted from the revenue
expenses - Answers - - all the costs of doing business that are necessary to earn
revenue
competitive advantage - Answers - - some aspect of a product or company that makes it
more appealing to its target customers
risk and reward relationship - Answers - - fundamental to modern day economies
- a company needs some promise of reward before it is willing to take the risks involved
in creating/selling products
- risks are attached directly to decisions so bad decision = company suffers
barrier to entry - Answers - - any resource or capability of a company must have before
it can start competing in a given market (large sum of money, equipment, land, etc.)
business mindset - Answers - - a view of business that considers the myriad decisions
that must be made and the many problems that must be overcome before companies
can deliver the products that satisfy customer needs
what to consider using the business mindset? - Answers - - functionality of products?
- marketing of products?
- image of company?
- price of products?
, - availability / where to sell product through?
- services?
relationship b/w business and society - Answers - - weighing the positive and negative
effects
- businesses can benefit communities and nations in multiple ways but they can also
negatively impact society it just depends
major functional areas in a business enterprise - Answers - - research and development
- information technology
- manufacturing / production / operations
- marketing and sales
- finance and accounting
- human resources
- business services
research and development (R&D) - Answers - - functional area responsible for
conceiving and designing new products
- sometimes known as product design or engineering
- essential for survival b/c it provides the ideas and designs that allow business firms to
meet customer needs in competitive markets
information technology (IT) - Answers - - systems that promote communication and
information usage through the company or that allow companies to offer new services to
their customers
manufacturing, production, or operations (operations managers) - Answers - - an area
where the company makes whatever it makes (for goods-producing businesses) or
does whatever it does (for service businesses)
- responsible for purchasing, logistics, facilities management
marketing and sales - Answers - - charged with identifying opportunities in the
marketplace
- working with R&D to develop the products to address those opportunities
- creating branding and advertising strategies to communicate with potential customers,
and setting prices
- sales and marketing might not be aligned in some businesses
- 3 functions (sales/distribution/customer support)
what are the three functions of marketing and sales? - Answers - - sales function
- distribution function
- customer support function
sales function - Answers - - develops relationships with potential customers and
persuades customers to buy the company's goods and services
Environments of Business - Answers - - economic
- market
- technological
- social
- legal and regulatory
market environment - Answers - - a company's target customers, the buying influences
that shape the behavior of those customers, and competitors that market similar
products to those customers
economic environment - Answers - - conditions and forces that affect the cost and
availability of goods, services, and labor and thereby shape the behavior of buyers and
sellers
- influences almost every decision a business makes
technological environment - Answers - - forces resulting from the practical application of
science to innovations, products, and processes
- changes have the ability to change every facet of business
disruptive technologies - Answers - - those that fundamentally change the nature of an
industry
- can be powerful enough to create or destroy entire companies
ex: music recording and playing devices changed the music industry
social environment - Answers - - population trends, social values and behaviors,
relationship of society and business AT LARGE (large scale)
stakeholders - Answers - - internal and external groups affected by a company's
decisions and activities
legal and regulatory environment - Answers - - laws and regulations that restrain,
support, and protect businesses at local, state, national, and international levels
(some industries are heavily regulated ex: electricity)
business - Answers - - any profit-seeking organization that provides goods and services
designed to satisfy customers' needs
not-for-profit organizations - Answers - - organizations whose primary objective is to
provide goods and services to society without the goal of making a profit
- also have to bring in revenue in order to satisfy their stakeholders' needs
,what is the driving force behind most businesses? - Answers - - the prospects of
earning profit and building assets
what are assets? - Answers - - can be defined as anything owned by the company that
can be of meaningful value (from patents and brand names to real estate and company
stock).
goods-producing businesses - Answers - - create value by making things most of which
are tangible
- tend to be capital intensive
service businesses - Answers - - create value by performing activities that deliver some
benefit to customers
- tend to be labor intensive
revenue - Answers - - money that a company brings in through the sale of goods and
services
business model - Answers - - a concise description of how a business intends to
generate revenue
profit - Answers - - the amount of money left over after expenses (all the costs involved
in doing business) have been deducted from the revenue
expenses - Answers - - all the costs of doing business that are necessary to earn
revenue
competitive advantage - Answers - - some aspect of a product or company that makes it
more appealing to its target customers
risk and reward relationship - Answers - - fundamental to modern day economies
- a company needs some promise of reward before it is willing to take the risks involved
in creating/selling products
- risks are attached directly to decisions so bad decision = company suffers
barrier to entry - Answers - - any resource or capability of a company must have before
it can start competing in a given market (large sum of money, equipment, land, etc.)
business mindset - Answers - - a view of business that considers the myriad decisions
that must be made and the many problems that must be overcome before companies
can deliver the products that satisfy customer needs
what to consider using the business mindset? - Answers - - functionality of products?
- marketing of products?
- image of company?
- price of products?
, - availability / where to sell product through?
- services?
relationship b/w business and society - Answers - - weighing the positive and negative
effects
- businesses can benefit communities and nations in multiple ways but they can also
negatively impact society it just depends
major functional areas in a business enterprise - Answers - - research and development
- information technology
- manufacturing / production / operations
- marketing and sales
- finance and accounting
- human resources
- business services
research and development (R&D) - Answers - - functional area responsible for
conceiving and designing new products
- sometimes known as product design or engineering
- essential for survival b/c it provides the ideas and designs that allow business firms to
meet customer needs in competitive markets
information technology (IT) - Answers - - systems that promote communication and
information usage through the company or that allow companies to offer new services to
their customers
manufacturing, production, or operations (operations managers) - Answers - - an area
where the company makes whatever it makes (for goods-producing businesses) or
does whatever it does (for service businesses)
- responsible for purchasing, logistics, facilities management
marketing and sales - Answers - - charged with identifying opportunities in the
marketplace
- working with R&D to develop the products to address those opportunities
- creating branding and advertising strategies to communicate with potential customers,
and setting prices
- sales and marketing might not be aligned in some businesses
- 3 functions (sales/distribution/customer support)
what are the three functions of marketing and sales? - Answers - - sales function
- distribution function
- customer support function
sales function - Answers - - develops relationships with potential customers and
persuades customers to buy the company's goods and services
