Notes, summaries, assignments, exams, and problems for Economy

Disability Insurance: Core Principles & Practical Applications

1. True Statements on Disability Insurance

Louise is contemplating disability insurance but finds the industry a bit confusing. Which among the following statements concerning disability insurance is TRUE?

It is more probable that someone in their mid-twenties will suffer a disability lasting three months or more before they are 65, than someone who is 60 years old.

2. Monika's Occupational Disability Risk Class

Monika works for Geological Capital Corporation as a full-time surveyor. What is her likely disability risk class?

Class 3

3. Risk Management & Disability Income Protection

In general, risk management strategies are intended to protect individuals from the risks associated... Continue reading "Understanding Disability Insurance: Key Concepts & Scenarios" »

Alternative Business Financing

Alternative business financing has become an issue of great importance in the wake of the recent financial crisis. The crisis led to a reduction in bank credit for companies, which has allowed alternative forms of financing to emerge. Alternative financing is used to finance companies and individuals beyond banks. It is particularly attractive for SMEs and individuals.

In the past, in Spain, the sources of funding were basically from banks, with easy access and fast processing. Thanks to these facilities and good interest rates, bank financing was consolidated over other loans. As a consequence, before the beginning of the crisis, we found a situation where the weight of bank financing was predominant.

With the outbreak... Continue reading "Alternative Financing & Evolution of Capitalism: Trends" »

Business & Financial Terminology

Core Business & Financial Concepts

• Overheads: Gastos generales (General expenses)
• Operating Profit: Beneficio de explotación (Profit from operations)
• Reduced by 50% / Halved: Reducido a la mitad
• Budgets: A plan of how to spend an amount for a period of time.
• Huge Conglomerate: A large business organization comprising several companies.
• Running Up (a debt/bill): Contraer una deuda (To incur a debt or bill).
• Joint Venture: A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.
• Subsidiary: A company controlled by a parent company.
• Parent Company: A company that owns enough voting stock in another firm to control its management and operations.

Understanding Lean Systems and Operations

Lean systems are operations systems that maximize the value added by each of a company’s activities by removing waste and delays from them.

Core Philosophies: TPS and JIT

• Toyota Production System (TPS)
• Just-in-Time (JIT) System

The JIT Philosophy: Eliminating Waste (Muda)

The JIT philosophy focuses on eliminating waste, or muda, by cutting unnecessary capacity or inventory and removing non-value-added activities.

Goals of Lean Implementation

The primary goal is to eliminate the eight types of waste, produce services and products only as needed, and continuously improve the value-added benefits of operations.

Eight Types of Waste (Muda)

Identifying and eliminating these eight types of waste (muda) is central... Continue reading "Lean Systems Implementation: Eliminating Waste (Muda) and Optimizing Operations" »

Qualities of Entrepreneurs

1. Initiative

2. Drive and Determination

To turn ideas into practice.

3. An Ability to Plan Carefully

To minimize the risk of failure.

4. An Ability to Learn from Mistakes

And to see mistakes as "part of learning to succeed".

5. The Ability to Think Ahead

To identify opportunities for the future.

Factors to Consider When Selecting Suppliers

Quality

1. The quality of suppliers needs to be consistent.
2. Customers can be selective about quality.
3. Customers will associate poor quality with the business they buy from, not their suppliers.

Availability

1. If a supplier is often out of stock of items, it could affect the firm's production process.
2. So they need to make sure their supplier can provide stock in sufficient quantities.

Reliability and

Chapter Nine

New Product Development and Product Life-Cycle Strategies

Two Ways to Obtain New Products

• Acquisition: Refers to the buying of a whole company, a patent, or a license to produce someone else’s product.
• New Product Development: Refers to original products, product improvements, product modifications, and new brands developed from the firm’s own research and development (R&D).

Major Stages in New Product Development

1. Idea Generation
2. Idea Screening
3. Concept Development and Testing
4. Marketing Strategy Development
5. Business Analysis
6. Product Development
7. Test Marketing
8. Commercialization

Idea Generation

Idea generation is the systematic search for new product ideas.

Sources of New Product Ideas

• Internal Sources: Refer to the company’s own formal

Common Reasons Startups Fail

1. The team doesn't have what it takes to succeed.
2. The idea is not satisfying a market need.
3. Running out of cash too fast.
4. Not being able to support growth.
5. Poor allocation of resources and money.
6. Not realizing the competition in the market.
7. Ignoring customers.

Multipotentialities

1. Idea Synthesis: Being creative, bringing ideas into something real.
2. Rapid Learning: Being able to retain and analyze information quickly.
3. Adaptability: Managing, understanding, and adjusting to different situations.

Business Plan

A written description of what and how (operational, financial) of your business future. Attracts key employees. Includes business goals, strategies, potential problems, etc.

Business Plan Guide

1. Executive Summary
2. General Company

Key Stakeholder Groups and Their Expectations

Understanding the needs and expectations of various stakeholder groups is crucial for business success. Here's a breakdown of major stakeholder groups and what they typically expect:

1. Owners and Investors

   Owners and investors have a financial or other interest in the organization. They generally seek high profits, dividends, long-term growth, and a positive corporate image.

   Example: An owner of company ABC expects a financial return on their investment.

2. Suppliers

   Companies often build strong relationships with suppliers. This fosters shared goals, visions, and strategies. Collaboration between buyers and sellers can deliver the best value to end customers, benefiting all partners.

   Example: Lulu Hypermarket,

Business Terminology Reference

Marketing and Sales Concepts

• Marketing
• Services
• Utility
• Form Utility
• Place Utility
• Time Utility
• Possession Utility
• Information Utility
• Market
• Consumer vs. Customer
• Market Share
• SWOT Analysis
• Sales Forecasts
• Marketing Plan
• Performance Standard
• Target Market
• Market Segmentation
• Demographics
• Geographics
• Psychographics
• Disposable Income
• Discretionary Income
• Mass Marketing

Economic Principles

Core Economic Terms

• Economic
• Goods
• Resources (Corrected from 'reasources')
• Factors of Production
• Entrepreneurship
• Scarcity
• Traditional Economy
• Market Economy
• Command Economy
• Capitalism
• Socialism
• Communism
• Supply
• Demand
• Domestic Business
• Global Business
• Imports
• Exports
• Balance of Trade
• Free Trade
• Tariff
• Quota
• Embargo
• International Trade
• Trade Deficit
• Protectionism

Intellectual Property

Stockholders' Equity

Rights of stockholders to share proportionately in:

1. Profits
2. Management
3. Corporate assets upon liquidation
4. Any new issues of stock of the same class (preemptive right)

Preemptive Right: Protects an existing stockholder from involuntary dilution of ownership interest.

Key Concepts

Additional Paid-in Capital: Indicates any excess over par value paid in by stockholders in return for the shares issued to them.

Retained Earnings: Represents the earned capital of the company.

Lump-Sum Sales: When a corporation issues two or more classes of securities for a single payment.

• Incremental Method: Company cannot determine the fair value of all classes of securities.
• Proportional Method: Determining relative value is available for each class of security.