What a business is and how it creates and captures value, how markets and competition work, the PESTEL forces that make a business viable or not, where new ideas come from and how entrepreneurs test them, vision and ethics, how businesses are organized, and how supply chains get products to customers.
A business produces and distributes goods and/or services, at any size, in person or online. Customers buy; consumers use. Businesses find customer problems, needs and wants (market opportunities) and build products for them, choosing which customers to serve. Value creation means solving those problems; value capture means charging more than the product cost to make.
A market is any space where sellers and buyers interact. Voluntary exchange earns revenue for sellers and value for buyers; sellers push prices up, buyers push them down, and competition settles on a market price. Competitive advantage is outperforming rivals, through low prices, differentiation or barriers to entry. A monopoly has no competition.
PESTEL factors (political, economic, social, technological, environmental, legal) shape which businesses are viable in a market and what careers exist there. Businesses use the PESTEL framework to judge a market's attractiveness and risks, and enter markets whose factors fit their model. Changes in any factor can change viability and jobs.
Entrepreneurs develop new businesses and take on the risk and reward. Ideas come from observing, interviewing and surveying customers, market and technical research, and experimentation. New products are risky because they cost resources with no guaranteed revenue; people bear that risk for profit, problem-solving or passion. Design thinking: validate the problem, develop a solution, test an MVP.
Core values are beliefs that guide actions; core competencies are capabilities that help outperform rivals. Both guide business and personal choices. A vision statement states core values and aspirations; a mission statement says what the business does and how it will reach its goals. Businesses seek profit; social enterprises add social goals; nonprofits reinvest surpluses.
Unethical behavior (falsifying or hiding information, misusing property, harming employees or customers) can happen at any level, often pushed by incentives. Businesses encourage ethics with codes of conduct, training, consequences and modeling, which also builds loyalty. Ethical dilemmas pit values against each other or against goals; leaders weigh effects on internal and external stakeholders.
Business types: sole proprietorship, partnership, LLC, corporation. The first three keep owners in control and keep profits, but have less access to funding; sole proprietors and partners are personally liable, LLC owners are not. Corporations have more funding and growth but owners cede control to shareholders and a board. Growing businesses add specialized departments and may outsource.
Businesses choose artisan or mass-production processes based on customer priorities, core competencies and competition. Supply chains connect everyone from raw materials to delivery, and differ for goods and services. Businesses weigh cost, quality, efficiency, convenience and risk in choosing suppliers, and shape supply chains around their competitive-advantage strategy.