The Business Environment

The Business Environment
Felecia F. Cook
Bus 100
Professor Scarlett
01/29/13

Business plays a vital role in the economy through the provision and supply of goods and services for monetary gain. There would be no economy without business. Thriving businesses help to promote a high quality of living. The life of any nation’s economy depends on how they achieve wealth and how much wealth they achieve. Essentially, the health of a nation’s economy is dependent upon the results of doing business for profit thus providing jobs and a better way of life for everyone. We rely largely on the success of the small business and its impact on the local economy as well as the large business and its force nationally and globally. Both nonprofit and for profit businesses generate revenue, incur expenses, provide jobs and contribute overall to the economy however there are several differences to mention. The nonprofit organization is in business strictly to promote a cause and the for-profit business creates revenue for the benefit of its owner(s). Another difference is the nonprofit business is tax exempt and the for-profit business is required to pay taxes on income earned. If at some point the nonprofit business comes to an end, the liquidated assets of the nonprofit business must be absorbed by another nonprofit organization but the for-profit business’s liquidated assets are absorbed by its owner(s). As a result of the biggest credit crisis in the United Sates history, the Federal Reserve along with the United States Congress took steps to help avoid a total collapse in the economy through both fiscal and monetary policy. Mortgage loan defaults created by uninhibited lending caused banks to fail resulting in budget deficits and federal debt along with plummeting unemployment rates which required intervention. To relieve the pressure on the economy, Congress extended tax cuts and instituted a huge stimulus to encourage spending. The economic stimulus package put money into social services and infrastructure (improvement of roads and bridges) thus the stimulation of employment and consumer spending. These measures had a positive effect on the economy by keeping it from total collapse. According to United States Department of Agriculture, article retrieved from (http://www.ers.usda.gov/media/872111/aib794_002.pdf (p1), “Understanding the performance and dynamics of global food markets is no longer a matter of understanding the fundamentals of international trade. Understanding the competitive nature of the global food industry means understanding changing consumer preferences and the food industry’s efforts to meet these demands.” McDonalds is one of the most successful fast food services in the United States and around the world. When considering a strategy for accessing global markets for food services, it is only fit to consider their strategy for world-wide success. McDonalds took the following steps which helped to launch them into the global market: 1. They developed a franchise business model that appealed to those interested individuals who would share in loss, profits and new opportunities 2. They developed new products and services to meet the needs of the local consumer 3. The made local become local around the world When McDonalds developed their business model, they harnessed their identity and set the stage for foreign franchising. As stated in BUSN 4, 4th Edition (p38), “A key difference between franchising and licensing is that franchisees assume the identity of the franchisor.” McDonalds efforts to expand globally without losing their identity can be attributed to how they kept up with what the consumer

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