INTRODUCTION TO BUSINESS Subarjo Joyosumarto SE, MA, Ph.D 4 September 2017 Meeting 1: The Business System
www.ibs.ac.id Pengumuman Intro. Business 2017 Meeting 1 1
Introduction to Business Class
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REFERENCES • The list of books are stated at page 4 CLASS PROGRAM
• There will be 14 meeting and each meeting constitute 150 minutes length • List of the class program are written at page 5 and 6
STUDENT PARTICIPATION
• Students are expected to actively participate in the class discussions • They will learn both Business and English at the same time
LANGUAGE
• Bi-lingual, English and Bahasa Indonesia are used in the class • Question for exams are in English. Students may choose to answer in English (will be given extra point) or in Bahasa Indonesia 3
REFERENCES 1. Business
By Ricky W. Griffin and Ronald J. Ebeil Pearson Prentice Hall, 2006
2. Think New ASEAN
By Philip Kotler, Hermawan Kartajaya, Hooi Der Huar, Mc Graw Hill, 2015
3. Money, Banking and the Economy
By Thomas Mayer, James S. Dussenberry, Robert Z. Aliber, ww Nator & Compas, New York, 1981
4. A Smart and Good Entrepreneur,
By Ir. Hendro, M.M., Media Perinda 2011 4
PART I BUSINESS ENVIRONMENT 1. Introduction to Business class Chapter 1, The Business System 2. Overview of meeting 1 Chapter 4, Entrepreneurship 3. 4.
Overview of meeting 2 Business in ASEAN Overview of meeting 3 Banking Business
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Overview of meeting 4 Chapter 3, Business Ethically and Responsibility
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Monsoon 1 “Sell & Buy” Product (modul: Finance, Procurement, Retail)
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Overview of meeting 1-5
Midterm Exam
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PART II BUSINESS PROCESS 8. Chapter 6, Managing the Business Enterprise 9. Overview of meeting 8 Chapter 10, Marketing Process and Consumer Behavior 10. Overview of meeting 9 Chapter 14, Producing Goods and Services 11. Overview of meeting 10 Chapter 8, Human Resources and Labor Relations
12. Overview of meeting 11 Chapter 15, Managing for Production and Quality 13. Monsoon 2 “Business Function” Product (modul: Finance, Procurement, Warehouse, Marketing, HR) 14. Overview of meeting 8-12 Final Exam
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PART I BUSINESS ENVIRONMENT
Chapter 1. The Business System
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An economic system is a nation’s system for allocating its resources among its citizens. Resources
Citizens
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Circular Flow in a Market Economy Rp Business income
FIRMS • Supply products in output markets • Demand resources in input markets
Rp Payment for Resource
OUTPUT MARKETS Goods Services
Rp Consumer Spending
HOUSEHOLDS • Demand products in output markets • Supply resources in input markets
INPUT MARKETS Labor Capital Entrepreneurs Physical resources Information resources
Rp Income for Resource 9
DEMAND IN AN ECONOMY • Demand is the willingness and ability of buyers to purchase a good or service
Traditional market: customers come to buy raw foods 10
SUPPLY IN AN ECONOMY • Supply is the willingness and ability of producers to offer a good or service for sale
Factory : workers are working to make products to be sold 11
Demand Curve Price/Rp 100
A B
80 50
Demand Curve
25
•
30
Quantity (Kg)
A demand curve is a graph showing how many units of a product will be demanded (bought) at different prices: at price Rp. 100, quantity demanded is 25 Kg at price Rp. 80, quantity demanded is 30 Kg
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Supply Curve Supply Curve
Price/Rp 100
B
80
A
20
•
Quantity (Kg) 25
A supply curve is a graph showing how many units of a product will be supplied (offered for sale) at different prices: at prices Rp. 100, quantity supplied is 25 Kg at price Rp. 80, quantity supplied is 20 Kg
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The Laws of Supply and Demand Price
A B Demand Curve
Quantity
The law of demand: Buyers will purchase (demand) more of a product as its price drops and less as its price increases.
The law of supply: Producers will offer (supply) more of a product for sale as its price rises and less as its price drops.
Supply Curve
Price B A
Quantity
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Surpluses and Shortages Price/Rp A
100
Supply Curve
B Surplus
75 50
C
Shortage
D Demand Curve
20 25
Surplus is a situation in which quantity supplied exceeds quantity demanded
50 55
Quantity
Shortage is a situation in which quantity demanded exceeds quantity supplied 15
EXERCISES 1 Prices of Rice /Kg/Rp
Quantity Supplied /Kg
Quantity Demanded/Kg
4.000
10
70
6.000
20
60
8.000
30
50
10.000
40
40
12.000
50
30
14.000
60
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1. Draw a supply and demand curves, and show the point of equilibrium 2. When the price is Rp. 6.000/Kg, show the shortage of rice in the market 3. When the price is Rp 12.000/Kg, show the surplus of rice in the market
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EXERCISES 2 Price of Shoes/pair/Rp
Quantity Supplied (pairs)
Quantity Demanded (Pairs)
75.000
30
90
100.000
40
75
125.000
45
60
150.000
50
50
175.000
60
45
200.000
75
40
225.000
90
35
250.000
100
25
1. Draw the supply and demand curves, and show the point of equilibrium 2. When the price is Rp. 200.000/pair, show the surplus of shoes in the market 3. When the price is Rp 125.000/pair, show the shortage of shoes in the market 17
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Private Enterprise and Competition Competition occurs when two or more businesses vie for the same resources or customers. Four degrees of competition: • Perfect Competition : a lot numbers of supplies and buyers • Monopolistic Competition: a few supplies and many buyers • Oligopoly : a single buyer and a lot of supplies • Monopoly : a single supply and a lot of buyers 19
Degrees of Competition Characteristic
Perfect Competition
Example Local farmer Number of Many competitors Easy of entry into Easy industry Similarity of Identical goods or services offered by competing firms Level of control None over price by individual firms
Monopolistic Oligopoly Competition Stationary store Steel industry Many, but fewer Few than in pure competition Fairly easy Difficult Similar Can be similar or different
Some Some
Monopoly Public utility None
Regulated by government No directly competing goods or services Considerable
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The Concept Of Business and The Concept Of Profit Business is an organization that provides goods or services to earn profits Profits represent the difference between a business’s revenues and its expenses
Profit = Business’s Revenue – Business’s Expenses 21
Factors of Production Labor (or Human resources) are the physical and mental capabilities of people as they contribute to economic production
Capital are the funds needed to create and operate a business enterprise 22
Factors of Production Entrepreneur is an individual who accepts the risks and opportunities involved in creating and operating a new business venture Physical resources are tangible things organizations use in the conduct of their business 23
Questions for discussions - Article
TEMPO.CO, Jakarta - Menteri Perdagangan Enggartiasto Lukita optimistis harga daging sapi akan turun sesuai dengan target yang diharapkan masyarakat, yakni di bawah Rp 100 ribu per kilogram. Namun, menurut Enggar, penurunan harga daging sapi tersebut harus terjadi secara bertahap. "Kalau itu langsung turun (harganya), ada kecenderungan langsung naik (permintaannya). Jadi, pasti ada penahapan. Saya juga akan minta jaminan berapa lama mereka akan turun. Tapi tentu tidak bisa dalam 2-3 bulan," kata Enggar di Pasar Modern BSD, Serpong, Tangerang, Ahad, 7 Agustus 2016. Agar target penurunan harga itu dapat dilakukan, Enggar berjanji akan memperhatikan suplai daging sapi bagi masyarakat. Baik suplai daging sapi impor maupun lokal harus seimbang. "Kami menyadari masih ada defisit. Ketersediaan dalam negeri belum mampu memenuhi kebutuhan pasar," ucapnya. Enggar menilai, apabila masyarakat mengetahui bahwa suplai daging sapi tercukupi dan tidak ada kelangkaan, akan terdapat koreksi harga daging sapi di pasar. "Itu akan kami jamin," ujar Enggar yang pernah menjadi anggota Dewan Perwakilan Rakyat dari Partai Golkar tersebut. Enggar menegaskan, walaupun diperlukan impor daging sapi untuk memenuhi kebutuhan permintaan dalam negeri, peternak daging sapi lokal tetap akan diprioritaskan. "Kita harus adaroadmap agar bisa mandiri pangan. Daging, beras, semua produksinya harus mandiri. Tapi saya tidak anti-asing. Kalau mereka mau, silakan investasi di sini." ANGELINA ANJAR SAWITRI
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Questions for discussions Questions Related to Previous Article 1. What are the basic factor of production in the industry ? 2. Explain the Demand and Supply interactions in shaping the market price of the industry ! 3. Referring to the article, why should the supply of the beef need attention ? 4. What is the government’s role which affect the supply and demand of this industry ? 5. What are the environmental factors that affects the demand of this industry ?
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Activities - Optional Roleplay of Buyer and Seller in the class reflecting Demand and Supply.
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Thank You 27
