By Himashi De Mel BA (Hons),CIMA Passed Finalist

Transcription

1 By Himashi De Mel BA (Hons),CIMA Passed Finalist

2 Chapter 01 Motives and functions of a business Chapter 02 Business ethics and social responsibility Chapter 03 Assessing economic conditions Chapter 04 Assessing global conditions

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4 Learning outcomes The goals of a business Resources used to produce product/service Factors affecting business Key stakeholders in a business

5 What is a business? Any commercial, industrial or professional activity undertaken by an individual or a group. Source : Investopedia * A business would provide goods and services or both to consumers.

6 Business objectives To make profits To achieve business survival To grow the business To increase added value To provide services to the community To satisfy needs and wants of people

7 To make profits :

8 Company generates a revenue of LKR 200,000 by selling 50,000 chocolates. For the production company will have to incur a cost of LKR 100,000 For the factory premises company has to pay the rent amounting to LKR 20,000 For the employees company has to pay LKR 30,000

9 To make profits : Business need to make profits : There is sufficient money to keep the business growing. Owners can be rewarded for the risks they take.

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13 Not for profit organizations objectives Not for profit organization is a type of organization that does not earn profits for its owners. All of the money earned by or donated to a not for profit organization is used in pursuing the organizations objectives

14 Not for profit organizations objectives Efficiency A level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs. Output Input Effectiveness The level of value created by the output generated. Value Output Economy The amount of money spent on inputs that are used for the process Input Money

15 Land Labour Capital Entrepreneurship Factors of production

16 Factors of production

17 Exercise The illustration below shows the factors of production that might be used in small business. Study the illustration and then fill in the blanks with the appropriate responses.

18 In the illustration which items represent each of the factors of production Land Labour. Capital. Entrepreneurship

19 Exercise Pay attention to the video being presented and then identify the factors of production for Cadbury chocolates in detail :

20 Factors of production in 21 st century.

21 Factors affecting a business Factors affecting a business External Internal PESTEL- Macro environment Porters five forces- Micro environment

22 Porters Five Forces Analysis These factors will identify and analyze the competitive forces that will shape the industry. It helps to determine industry s weaknesses and strengths. N.B: Students are expected to refer supplementary handout

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25 Burger King is considering entrance to the Sri Lankan market. Construct a Porters Five Forces Analysis to guide the management of the company to understand the intensity of competition within Sri Lankan market.

26 PESTEL Factors All business will be affected by things that happen outside the business that they cannot control. These are called external factors ( Macro economical factors)

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29 Factors affecting a business Internal Environment External Environment Strengths Opportunities Weaknesses Threats

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34 Opportunity cost The cost of an alternative that must be forgone in order to pursue a certain action. In other words, the benefits you could have received by taking an alternative action. (Investopedia, 2013)

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36 Key stakeholders in a business A party that has an interest in an enterprise or project. Or A party who can affect/ impact business decisions and a party who can get affected as a result of business decisions.

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38 Summary SWOT analysis What is a business Business goals Opportunity cost Summary Factors affecting production Key stakeholders Vision/ mission Factors affecting business : PESTEL

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