Introduction to Business Activities - Essay Example

? The economy is highly dependant on the activities of business organizations. There are over 28.95 million businesses in the United s of America (Census, 2008). These businesses are the main source of employment in the U.S. Without businesses the economy becomes stagnant because the money that people earn from their work increase the money supply of an economy. The existence of business entities is also important for the economy in terms of the taxes they generate for governmental institutions. Governments receive tax revenues from businesses in the form of patent tax, income tax, and sales tax. Taxes are the primary source of income of a government. The taxes collected by government from businesses are used to finance public projects and social programs. Businesses also contribute to the well being of a society through their social corporate responsibility programs. Corporate social responsibility (CRS) is about how companies manage the business processes to produce an overall positive impact on the members of a society (Baker, 2004). The philanthropic initiatives of businesses are important for the economy because they directly help the social class that is in greater need in our country which is the poor people of the nation. Businesses are also important to the economy because they manufacture and create products that people need and desire. For instance the activities of businesses create the food supply people consume on a daily basis. The activity of businesses also impacts the world trade of products between different countries across the world. Profit and non profit organizations play some similar and other different roles in the economy. Both types of organizations help provide the economy with jobs for the people. The non-profit sector is composed of the private non-profit organizations and the government. Profit organizations are the main contributors of tax revenue for the government. The goal of these businesses is to maximize shareholders wealth, while the goal of non-profit organizations is to provide free services to help social causes in a community. Non-profit organizations such as the Red Cross assist society whenever there is a disaster and there are constantly collecting blood from donors to help sick people. Often profit organizations donate money to non-profit organizations because these organizations are more adept at using money more effectively to help poor people. For example a $45 donation to the non-profit organization Feed The Children enables the entity to purchase $225 of food and other essential items. A major difference between profit and non-profit organizations is that businesses operate in order to maximize their profit, while non-profit organizations operate on a zero sum budget which means that any money they collect during a year is supposed to be totally spent to reach zero by the end of the fiscal year. The largest non-profit organization is the government. In the United States as of 2010 there were 21.29 million governmental employees (Numberof, 2012). This implies that the government is the largest non-profit organization in the United States. The money the government collects from taxes and other revenue sources is used to finance different programs including the military, education, and many other social programs. The monetary policy in the United States of America is set by the Federal Reserve. The two main aspects of monetary policy are the money supply and credit. The interest rates in the banking industry are dependent on the prime rate the Federal Reserve sets. The chairman of the Federal Reserve is Ben S. Bernanke. The fiscal policy in the United States is controlled by the Federal government. Fiscal policy deals with how the government spends its money. One of the biggest obstacles the Federal government faces is the accumulated deficit. This deficit has been growing a lot since the War on Terror that started in 2001. A product that I am familiar with is a new invention created by the company WildRavenModels. This firm created the world’s first crash proof electric remote control airplane. Prior to this invention all remote control airplanes would break if the pilot crashed the plane. The company could use several different strategies to penetrate different markets. The most effective way to market such a product is through online advertising. The company must develop a corporate website to sell its planes. To get the product noticed the firm should sell some of its planes through the online giant auction website, eBay. The products available for sale on eBay should be limited because products sold at eBay are typically sold at a bargain price. The presence of some planes at eBay can serve as a way to market the product. In order to penetrate a specific country the company can form a strategic alliance with a foreign firm. The capabilities and resources of a firm can be leveraged using strategic alliances (Kotler, 2003). The firm should also use other marketing channels to get the word out about the existence of its products. Some of the marketing channels that the company can use include television, radio, written press, and cellular advertising. Cellular advertising is one of the hottest new advertising techniques marketers are using. The technique is very effective because it can target customers with a specific demographic profile. The cellular phone has become the most popular electronic gadget in the world. There are 5.9 billion cellular subscriptions worldwide (Plunkettresearchonline, 2012). A company that has grown tremendously during the last couple of decades is the coffeehouse Starbucks Cafe. Starbucks Cafe is the industry leader in the coffeehouse business. One of the reasons for its success is that the company is an extremely socially responsible company. Customers today prefer to do business with companies that act in a socially responsible manner. Starbucks Cafe sources all its coffee from fair trade coffee. Fair trade coffee is coffee sourced in a responsible manner in which the buyer pays a premium price to ensure higher quality and that the farmers in the poor countries where the coffee is grown receive fair compensation. The price paid for fair trade coffee is more than twice as high as regular coffee. In the fair trade coffee arrangement buyers such as Starbucks Cafe help finance the operation of the farmers and they also provide them with technology transfer. References Baker, M. (2004). Corporate social responsibility – What does it mean? Retrieved October 31, 2012 from http://www.mallenbaker.net/csr/definition.php Census.gov (2008). Statistics about Business Size (including Small Business) from the U.S. Census Bureau. United States Census Bureau. Retrieved October 31, 2012 from http://www.census.gov/econ/smallbus.html Kotler, P. (2003). Marketing Management (11th ed.). New Jersey: Prentice Hall. Plunkettresearchonline.com (2012). Introduction to the Wireless Industry. Retrieved October 31, 2012 from http://www.plunkettresearchonline.com Numberof.com (2012). Number of Governmental Employees in the US. Retrieved October 31, 2012 from http://www.numberof.net/number-of-government-employees-in-the-us-2/ Read More