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Introduction to Business

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“Introduction to Business”, Laurence J Gitman , Carl Mc Daniel, 2018

“Pengantar Bisnis” edisi ke 10, Ebert & Griffin

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Aryo Pratomo, MBA

pratomo.aryo@gmail.com

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The Concept of Business

  • Business : Any activity that seeks to provide goods and services to others while operating at a profit.
  • Profit : Revenue - Cost
  • Consumer Choice and Demand
  • Opportunity

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An Idea

All businesses start from same point :

It comes from observing people. Needs and Wants.

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Maslow’s Hierarchy of Needs

  • Maslow - Human action are motivated in order to attain certain ends.
  • 5 Categories of human needs that dictate an individual’s behavior.
  • When lower needs is met, the next need on the hierarchy becomes our focus of attention.

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Maslow Hierarchy o f Needs

  • To basic physical needs like drinking when thirsty, or eating when hungry.
  • If someone lacking more than one need, they are likely to try to meet these physiological needs first

Psycological Needs

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Maslow Hierarchy o f Needs

  • Some of basic safety and security needs :
    1. Financial security
    2. Health and wellness
    3. Safety agains accidents and injury
  • Thats why people purchase insurance and contribute to a saving account.

Safety Needs

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Maslow Hierarchy o f Needs

  • Involves feeling loved and accepted.
  • Includes both romantic relationships as well as ties to friends and family members.
  • Includes our need to feel that we belong to a social group.

Social Needs (love and belonging)

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Maslow Hierarchy o f Needs

  • Involve the desire to feel good about ourselves.
  • Esteem needs include two component :
    • Involves feeling self-confident dan feeling good about oneself.
    • Involves feeling valued by others. That is, our achievements and contributions have been recognized by other people.

Self-Esteem Needs

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Maslow Hierarchy o f Needs

  • Involve feeling fulfilled :
    • Feeling that we are living up to our potential.
    • One unique feature of self-actualization is that it looks different for everyone.

Self-Actualization Needs

Self-actualization might

involve helping others

It might involve achievements

In an artistic or creative field

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The External Environment of Business

  • Everything outside an organization’s boundaries that might affect it.
  • Seven areas : Political, Economic, Social, Technology, Demographic, Competitive, Global.

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The External Environment of Business

  • Three components of political climate :
    1. The amount of government activity.
    2. The types of laws it passes.
    3. The general political stability of government.

Politics

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The External Environment of Business

  • Economic is the most important external influence on business.
  • When Economic is growing, Unemployment rates are low, income level rise.
  • Taxes and interest rate also will influence business.

Economic

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The External Environment of Business

  • Social factors - our attitudes, value, ethics, and lifestyles.
  • Influence what, how, where, and when people purchase product or service.
  • Ex: a company that support a woman’s organization may earn the trust and loyalty of customer who identify as female.

Social

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The External Environment of Business

  • Technology is the application of science and engineering skills and knowledge to solve production and organizational problem.
  • Ex : New equipment & software improve productivity.

Technology

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The External Environment of Business

  • Demography is the study of people’s vital statistics, such as age, gender, race, ethnicity, location.
  • It help companies define the markets for their products and also determine the size & composition of workforce.
  • Ex: baby boomers generation (1946-1964) & generation x (1965-1980) willing to spend their money on health, comforts, leisure pursuit, cars.

Demographic

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The External Environment of Business

  • Business can increase their market share and stay relevant to their customers by keeping track of their competitors.
  • Two types of competitors:
    • Direct competitors : they offer similar products.
    • Indirect competitors : offering different products.

Competitive factors

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The External Environment of Business

  • By learning about global issues (culture, norm, consumer trend, economic status), company can develop products or offer services that meet the needs international customers.

Global factors

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Leonardo da Vinci

“Simplicity is the ultimate sophistication”