Deck 1: Exploring the World of Business and Economics

Question 1

Today, many companies have a social media presence on Facebook, Twitter, Flickr, and other sites beyond their corporate Web site. Think of three of your favorite car companies and conduct a quick search using a search engine like Google or Yahoo!
Answer the following:
1. Name the social networks for each company.
2. Compare each of their Facebook pages. How many "likes" does each company have? Are there multiple pages for the company? How much interaction (or engagement) is on each Facebook page?
3. What business goals do you think each company is trying to reach through their Facebook presence?

Answer 1

1.Three most favored car companies are as listed below:
• Mercedes-Benz - a German automobile manufacturer started in 1886
• Ferrari - an Italian sports car manufacturer founded in 1929
• Volkswagen - a German automaker founded in 1937
The above mentioned car companies uses social networking websites like Facebook, twitter, LinkedIn etc.
2.Findings:
The numbers of likes that each company earned on their Facebook page are as listed below:
Mercedes-Benz - 12,712,397 likes
Ferrari - 12,795,378 likes
Volkswagen - 1,294,731 likes
These car companies have multiple pages as well as multiple posts on their Facebook page. They divide their pages based on their products and countries marketed.
The number of interaction on each Facebook page varies on the basis of their posts. These are as listed below:
Mercedes-Benz - 212,016
Ferrari - 135,812
Volkswagen - 17,425
The above numbers denote the number of people who interact with the car companies.
3.Social media is a marketing tool which is the cheapest and the fastest way to market their brand name.
The social networking websites are used to achieve following business goals:
• They are used as a tool for promotional activities.
• To get the feedback from the customers.
• To understand the tastes and preferences of the customers'.
• To analyses the current market condition.
These car companies provide information about their products, branch details, prices and many more.

Question 2

The company that brought Mickey and Minnie Mouse into the public eye has been entertaining families for 90 years. Although animation was the Walt Disney Company's original focus, its entertainment empire now spans four main business groups: studio entertainment (including movies, stage shows, and recorded music), parks and resorts (such as Disney World and the Disney Cruise Line), consumer products (toys, books, and other merchandise), and media (including broadcast television, cable television, and online media). Disney has its headquarters in Burbank, California, but its operations are spread around the world, with $41 billion in annual revenues and a workforce of 156,000 employees.
Over the years, Disney has acquired other businesses and started new businesses to further strengthen its competitive position and its profits. It owns Pixar, the movie studio responsible for Toy Story and many other animated films, and it established Touchstone Pictures to produce and distribute movies for wider audiences. It acquired the AB C television networks and the ESPN sports channels as part of its drive for global growth in multiple media. To expand into interactive media for children, Disney bought the popular Club Penguin site and began creating online and video games, many featuring its popular movie and television characters.
Founder Walt Disney didn't invent the theme park, but he did transform the industry with the 1955 opening of Disneyland in California. The magic continued with the 1971 opening of Disney World in Florida. Both theme parks were drawing crowds from every continent when the company opened Tokyo Disneyland in 1983, at the height of the Japanese economic boom. Later, it worked with international partners to create Disneyland Paris and Hong Kong Disneyland. Shanghai Disney Resort will be the next to open, the result of a $3.7 billion joint business venture with a Chinese company. In all, more than 120 million people visit Disney theme parks and resorts over the course of one year.
Disney sees great growth potential in China. Thanks to economic and political changes, Chinese consumers have more disposable income than ever before and more opportunities to exercise their higher buying power. Box-office receipts from Chinese movie theaters are growing at double-digit rates, and many of Disney's Hollywood blockbusters have also been big hits in China. At the same time, competition to get movies into Chinese theaters is enormous, because the government limits the number of foreign movies that can be distributed nationwide. With an eye toward the future, Disney worked with a local partner to co- produce Iron Man 3 with a Chinese plot twist. It has also been lending its movie-making expertise to help develop the Chinese animation industry.
All these years of serving customers with a smile have given Disney considerable insight into how to meet the needs of people of all ages. The company set up the Disney Institute in 1986 to teach businesses, schools, hospitals, and other organizations how to deliver good customer service with the famous Disney touch. Its experts have trained National Football League staff members in preparation for Super Bowl events and given Chevrolet dealer employees tips about working with car buyers. When Florida Hospital asked for help in improving patient satisfaction, Disney experts conducted studies and recommended a number of steps, such as having a friendly greeter to put young patients at ease and replacing the glare of fluorescent bulbs with recessed lighting. These and other changes helped push the hospital's patient satisfaction scores into the top 10 percent across America. The Disney Institute's revenues have doubled over the past few years and are yet another reason for the company's profit momentum
Questions
How is the Walt Disney Company combining human, informational, material, and financial resources for business success?

Answer 2

In the past nine decades, WD has moved its focus from animation to entertainment. It diversified from animated cartoons to theme parks by anticipating the consumer behavior.
Currently, the company has employees close to 156,000 and revenue of totaling $42 billion with a net profit of around $5 billion. Over the years, the company has expanded into various categories.
The company has four main important divisions:
• Studio entertainment
• Parks and resorts
• Consumer products
• Media
The company purchased ABC television networks and the ESPN sports channel in order to expand into various verticals of entertainment. It also came up with theme parks at selected locations of the world.
Theme parks attract a lot of crowds and also earn a lot of revenues for the company. The company has set up DI to impart special training regarding customer service to the students. Consumer products include toys, books, and bags. Media includes various channels that the company owns.
In this way, the company has combined elements like human resources, capital, and information for driving the business success of the company.

Question 3

I n what ways have the problems caused by the recent economic crisis affected business firms? In what ways have these problems affected employees and individuals?

Answer 3

The United States along with other countries around the world are suffering due to the economic crisis which started in the late 2007. The following are the impact of the economic crisis on business firms, individuals and employees:
1) Reduction in consumer spending
2) Unemployment rate reaching10 percent
3) Slowdown in the construction and home building industry
4) Bankruptcy filed by several automobile manufacturers
5) Banks on the verge of a financial collapse as they are facing issues associated with loans and investments
6) Individual investments and retirement accounts getting devalued due to depressed stock values
7) Increase in business failures

Question 4

Online games have become big business. In just a few years-and during a difficult economic period-founder Mark Pincus has transformed Zynga from a start-up game company into a profitable, 3,000-employee corporation with shares traded on the Nasdaq stock exchange. Social media games are about more than winning and losing: "We're giving a reliable 15 minutes a day that lets them not only play but also connect with people in their lives with some level of meaning," Pincus explains.
Competing against established rival firms such as Electronic Arts and Activision Blizzard, Zynga must continually introduce new games to retain player loyalty and keep revenues growing through the sale of virtual goods and advertising. Pincus and his management team keep a close eye on Zynga's business health by measuring how many people play each game, how many buy virtual goods, and which game features are the most popular. Can Zynga keep clicking ahead?
Of the four resources (material, human, informational, and financial) that businesses combine and organize to be successful, which have had the most significant effect on Zynga's growth-and why?

Question 5

What reasons would you give if you were advising someone to study business?

Question 6

Much of the information in this chapter was designed to get you to think about what it takes to be a successful employee in the competitive business world.
Assignment
Assume that you are now 25 years old and are interviewing for a position as a management trainee in a large corporation. Also assume that this position pays $45,000 a year.
1. Describe what steps you would take to prepare for this interview.
2. Assuming that you get the management trainee position, describe the personal traits or skills that you have that will help you to become successful.
3. Describe the one personal skill or trait that you feel needs improvement. How would you go about improving your weakness?

Question 7

The company that brought Mickey and Minnie Mouse into the public eye has been entertaining families for 90 years. Although animation was the Walt Disney Company's original focus, its entertainment empire now spans four main business groups: studio entertainment (including movies, stage shows, and recorded music), parks and resorts (such as Disney World and the Disney Cruise Line), consumer products (toys, books, and other merchandise), and media (including broadcast television, cable television, and online media). Disney has its headquarters in Burbank, California, but its operations are spread around the world, with $41 billion in annual revenues and a workforce of 156,000 employees.
Over the years, Disney has acquired other businesses and started new businesses to further strengthen its competitive position and its profits. It owns Pixar, the movie studio responsible for Toy Story and many other animated films, and it established Touchstone Pictures to produce and distribute movies for wider audiences. It acquired the AB C television networks and the ESPN sports channels as part of its drive for global growth in multiple media. To expand into interactive media for children, Disney bought the popular Club Penguin site and began creating online and video games, many featuring its popular movie and television characters.
Founder Walt Disney didn't invent the theme park, but he did transform the industry with the 1955 opening of Disneyland in California. The magic continued with the 1971 opening of Disney World in Florida. Both theme parks were drawing crowds from every continent when the company opened Tokyo Disneyland in 1983, at the height of the Japanese economic boom. Later, it worked with international partners to create Disneyland Paris and Hong Kong Disneyland. Shanghai Disney Resort will be the next to open, the result of a $3.7 billion joint business venture with a Chinese company. In all, more than 120 million people visit Disney theme parks and resorts over the course of one year.
Disney sees great growth potential in China. Thanks to economic and political changes, Chinese consumers have more disposable income than ever before and more opportunities to exercise their higher buying power. Box-office receipts from Chinese movie theaters are growing at double-digit rates, and many of Disney's Hollywood blockbusters have also been big hits in China. At the same time, competition to get movies into Chinese theaters is enormous, because the government limits the number of foreign movies that can be distributed nationwide. With an eye toward the future, Disney worked with a local partner to co- produce Iron Man 3 with a Chinese plot twist. It has also been lending its movie-making expertise to help develop the Chinese animation industry.
All these years of serving customers with a smile have given Disney considerable insight into how to meet the needs of people of all ages. The company set up the Disney Institute in 1986 to teach businesses, schools, hospitals, and other organizations how to deliver good customer service with the famous Disney touch. Its experts have trained National Football League staff members in preparation for Super Bowl events and given Chevrolet dealer employees tips about working with car buyers. When Florida Hospital asked for help in improving patient satisfaction, Disney experts conducted studies and recommended a number of steps, such as having a friendly greeter to put young patients at ease and replacing the glare of fluorescent bulbs with recessed lighting. These and other changes helped push the hospital's patient satisfaction scores into the top 10 percent across America. The Disney Institute's revenues have doubled over the past few years and are yet another reason for the company's profit momentum
Questions
What is Disney's competitive situation, and what are the implications for its future expansion and profitability?

Question 8

What factors caused American business to develop into a mixed economic system rather than some other type of economic system?

Question 9

Online games have become big business. In just a few years-and during a difficult economic period-founder Mark Pincus has transformed Zynga from a start-up game company into a profitable, 3,000-employee corporation with shares traded on the Nasdaq stock exchange. Social media games are about more than winning and losing: "We're giving a reliable 15 minutes a day that lets them not only play but also connect with people in their lives with some level of meaning," Pincus explains.
Competing against established rival firms such as Electronic Arts and Activision Blizzard, Zynga must continually introduce new games to retain player loyalty and keep revenues growing through the sale of virtual goods and advertising. Pincus and his management team keep a close eye on Zynga's business health by measuring how many people play each game, how many buy virtual goods, and which game features are the most popular. Can Zynga keep clicking ahead?
Of the four environments that affect business (competitive, global, technological, and economic), which do you think will help and hurt Zynga's long-term profitability?

Question 10

What factors affect a person's choice of careers?

Question 11

With capitalism, competition is a driving force that allows the market economy to work. Let's see how competition works by pretending that you want to buy a new car.
Assignment
1. B rainstorm the following questions:
a. Where would you go to get information about new cars?
b. How will you decide on the make and model of car you want to buy, where to buy the car, and how to finance it?
c. How is competition at work in this scenario?
d. What are the pros and cons of competition as it affects the buyer?
2. Record your ideas.
3. Write a summary of the key points you learned about how competition works in the marketplace.

Question 12

The company that brought Mickey and Minnie Mouse into the public eye has been entertaining families for 90 years. Although animation was the Walt Disney Company's original focus, its entertainment empire now spans four main business groups: studio entertainment (including movies, stage shows, and recorded music), parks and resorts (such as Disney World and the Disney Cruise Line), consumer products (toys, books, and other merchandise), and media (including broadcast television, cable television, and online media). Disney has its headquarters in Burbank, California, but its operations are spread around the world, with $41 billion in annual revenues and a workforce of 156,000 employees.
Over the years, Disney has acquired other businesses and started new businesses to further strengthen its competitive position and its profits. It owns Pixar, the movie studio responsible for Toy Story and many other animated films, and it established Touchstone Pictures to produce and distribute movies for wider audiences. It acquired the AB C television networks and the ESPN sports channels as part of its drive for global growth in multiple media. To expand into interactive media for children, Disney bought the popular Club Penguin site and began creating online and video games, many featuring its popular movie and television characters.
Founder Walt Disney didn't invent the theme park, but he did transform the industry with the 1955 opening of Disneyland in California. The magic continued with the 1971 opening of Disney World in Florida. Both theme parks were drawing crowds from every continent when the company opened Tokyo Disneyland in 1983, at the height of the Japanese economic boom. Later, it worked with international partners to create Disneyland Paris and Hong Kong Disneyland. Shanghai Disney Resort will be the next to open, the result of a $3.7 billion joint business venture with a Chinese company. In all, more than 120 million people visit Disney theme parks and resorts over the course of one year.
Disney sees great growth potential in China. Thanks to economic and political changes, Chinese consumers have more disposable income than ever before and more opportunities to exercise their higher buying power. Box-office receipts from Chinese movie theaters are growing at double-digit rates, and many of Disney's Hollywood blockbusters have also been big hits in China. At the same time, competition to get movies into Chinese theaters is enormous, because the government limits the number of foreign movies that can be distributed nationwide. With an eye toward the future, Disney worked with a local partner to co- produce Iron Man 3 with a Chinese plot twist. It has also been lending its movie-making expertise to help develop the Chinese animation industry.
All these years of serving customers with a smile have given Disney considerable insight into how to meet the needs of people of all ages. The company set up the Disney Institute in 1986 to teach businesses, schools, hospitals, and other organizations how to deliver good customer service with the famous Disney touch. Its experts have trained National Football League staff members in preparation for Super Bowl events and given Chevrolet dealer employees tips about working with car buyers. When Florida Hospital asked for help in improving patient satisfaction, Disney experts conducted studies and recommended a number of steps, such as having a friendly greeter to put young patients at ease and replacing the glare of fluorescent bulbs with recessed lighting. These and other changes helped push the hospital's patient satisfaction scores into the top 10 percent across America. The Disney Institute's revenues have doubled over the past few years and are yet another reason for the company's profit momentum
Questions
Which of the factors in the business environment seem to be exerting the most influence on Disney's ability to grow? Explain.

Question 13

Does an individual consumer really have a voice in answering the basic four economic questions?

Question 14

Describe the four resources that must be combined to organize and operate a business. How do they differ from the economist's factors of production?

Question 15

Over the past few years, employees have been expected to function as productive team members instead of working alone. People often believe that they can work effectively in teams, but many people find working with a group of people to be a challenge. College classes that function as teams are more interesting and more fun to attend, and students generally learn more about the topics in the course. One way to begin creating a team is to learn something about each student in the class. This helps team members to feel comfortable with each other and fosters a sense of trust.
Assignment
1. Find a partner, preferably someone you do not know.
2. E ach partner has two to three minutes to answer the following questions:
a. What is your name, and where do you work?
b. What interesting or unusual thing have you done in your life? (Do not talk about work or college; rather, focus on such things as hobbies, travel, family, and sports.) c. Why are you taking this course, and what do you expect to learn? (Satisfying a degree requirement is not an acceptable answer.)
3. Introduce your partner to the class. Use one to two minutes, depending on the size of the class.

Question 16

Is gross domestic product a reliable indicator of a nation's economic health? What might be a better indicator?

Question 17

Describe the relationship among profit, business risk, and the satisfaction of customers' needs.

Question 18

In this chapter, entrepreneurship is defined as the willingness to take risks and the knowledge and ability to use the other factors of production efficiently. An entrepreneur is a person who risks time, effort, and money to start and operate a business. Often, people believe that these terms apply only to small business. However, employees with entrepreneurial attitudes have recently advanced more rapidly in large companies as well.
Assignment
1. Go to the local library or use the Internet to research how large firms, especially corporations, are rewarding employees who have entrepreneurial skills.
2. Find answers to the following questions:
a. Why is an entrepreneurial attitude important in large corporations today?
b. What makes an entrepreneurial employee different from other employees?
c. How are these employees being rewarded, and are the rewards worth the effort?
3. Write a two-page report that summarizes your findings.

Question 19

Discuss this statement: "Business competition encourages efficiency of production and leads to improved product quality."

Question 20

What are the four basic economic questions? How are they answered in a capitalist economy?

Question 21

Is government participation in our business system good or bad? What factors can be used to explain your position.

Question 22

Describe the four basic assumptions required for a laissez-faire capitalist economy.

Question 23

Choose one of the challenges listed on page 28 and describe possible ways in which business and society could help to solve or eliminate the problem in the future.

Question 24

Based on Figure 1.5, outline the economic interactions between business and households in our business system.

Question 25

How does capitalism differ from socialism and communism?

Question 26

How is productivity related to the unemployment rate?

Question 27

Define gross domestic product. Why is this economic measure significant?

Question 28

How is the producer price index related to the consumer price index?

Question 29

What are the four phases in a typical business cycle? How are monetary and fiscal policies related to the business cycle?

Question 30

Identify and compare the four forms of competition.

Question 31

Explain how the equilibrium, or market, price of a product is determined.

Question 32

Four different environments that affect business were described in this chapter. Choose one of the environments and explain how it affects a small electronics manufacturer located in Oregon. Why?