Reflective Essay
I was asked to write a reflective essay for the subject 'Introduction to Business'. I found the topic 'starting a small business' quite interesting. It teaches us how to start a business, it states that small business is everywhere all around us, like food stall, construction , wholesaling and many more. Most of the business are in the service industry. Small business is important to big businesses because they serve as distributors of product for the big businesses. Small business also act as suppliers for some big businesses,Small businesses are crucial
in providing innovations or serving niche markets.Niche market are very unique and specific segment of a market. Small business are less bureaucratic so they are able to respond quickly to changes in market. Many people start their own small business because they want to be self-employed. We can start a business by scratch, buying an existing business or go franchise. I think the topic that is applicable in our daily life would be 'business ethics and social responsibility' its teaches us to be ethic and responsible on what we do when doing business. I think that its is a good subject for student that want to own a business in the future as it teaches a lot of things that are use for starting a business.
2 exercise that is given
Exercise Topic 1
1.
Big
corporations (e.g. Taylor’s College, Coca Cola and Maybank) are the only true
businesses. True or false? Why?
False, there are also many businesses besides
than the above.
2.
All
businesses share something in common. What do you call an organization that
does not have that purpose (assume such organization is not
government–related)? Provide 2 examples of such organizations.
Non-profit organization, World Wildlife Fund and Community Recycle For
Charity
3.
Haziq
and C.J. have recently obtained a license to set up business. They are free to
set up any business of their choice. In the end, they have decided to target a
large retiree community and open a music store selling Rap CDs. Comment on
their decision.
Their decision is wrong because retiree wont want to listen to rap songs. They targeted the wrong customers.
4.
Businesses
are good for the society. Discuss how they can contribute. Provide specific
examples for each type of contribution.
Businesses provides people with employment,
you need workers to work for your business. It also pay tax for the government
so that it could be used for public goods, every company needs to pay a certain
percentage of their profit to the government. It also creates innovation to
enhance our standard of living, smartphones are now common and very useful.
5.
Define
the term “barrier to entry”. Which type of business (goods-producing or
service) has bigger barriers to entry? Why?
Barrier to entry means the obstacle for new
business to get started or enter a new market. Good-producing business has
bigger barriers to entry because it require a lot of capital assets.
6.
List
2 (other) types of barriers to entry and give one example for each type.
Intellectual property, example: Microsoft
vista and Economies of scale, example: Nokia.
7.
Why
are service businesses becoming more dominant in many countries? Research and
discuss (any) 3 reasons.
The reasons are service business rely more on
human resources than capital assets. Besides that, technology advancement has
reduced the needs of labour and capital assets required. Lastly, good-producing
business focusing on serving and supporting their customers, it hard to
classify purely as either a good-producing or a service one.
8.
In
which economic condition should a business lower the price of its product and
services? Why?
A business should lower the price of its
product and services if the economy is in a recession. Many people will be
unemployed and cannot afford to consume product and services.
9.
Explain
what a free market or capitalistic economy means? And a planned economy?
Free market means that businesses are free to
set up, grown, sold or shut down. While planned economy relies on the
government to produce the goods and services for its citizens.
Exercise Topic 2
- What is a niche market? Can you
give 2 examples (other than from the notes) of a niche market? Why would a
business want to target a niche market?
Niche
market is a very specific or unique segments of a market. Examples are wedding
planning and stress management. A business would target a niche market because small
business is less bureaucratic.
- What are some of the reasons that
motivate people to start their own business? If you were to start a
business, what would be your main reason? Discuss.
Some
people like the idea of being self-employed. If I were to start a business the
main reason is to earn more. Working as employee will always have the same
amount of salary, doing business is the faster way to earn money.
- What is limited liability? Is
this an advantage or a disadvantage to the business owner? How (i.e.
illustrate with an example)?
The
owner is personally responsible
for all the debts of his business. This is a disadvantage to the owner as he or
she has to pay the debt that still owing by the business personally.
- What is a franchise? Why would
the parent company of a franchise choose to sell licenses to franchisees
instead of expanding their own chain of stores? Also, provide 2 examples
of a franchise.
A
franchise is a business operating under
licenses issued by parent companies. Parent company would choose to sell
licenses instead of expanding their own because it’s a bigger risk to open up a
new branch than expanding. People who want to buy the licenses need to pay for
a certain amount, besides that rental is given to the parent company.
- Your family has owned a business
as a private company for the last 20 years. Recently your father, the CEO
and chairman, is rushing to take the company public, but you sensed that
he has not thought through this decision properly. As his adviser, what
reasons would you give to persuade to stay as a private company?
I
would give the reason that public companies are companies whose shares can be
bought and sold by anyone. People can even own the company by buying the
shares.
- How can internet help a recently-started
small business?
Internet
can help the recently started small business to advertise free and faster. Many
people use internet rather than watching tv.
- If you are a banker and, Gabriel,
a potential business owner wants to apply for a loan for starting a
business, under which circumstances would you be more likely to lend – a) he
wants to buy an existing business or b) he wants to start a brand new
business? Why?
I
would more likely to lend him if he wants to buy an existing business because
it is less risky compare to starting a brand new business.
- Discuss (any) 2 pros and 2 cons
of a partnership.
Partnership
is easier to get capital due to more owners. As a result, banks are also more
willing to lend money. Legal paperwork is simple and low cost.
- What are shares? Where are shares
traded in
Shares is a single unit of ownership in a cooperation,
mutual fund or any other organization. Shares are traded at Bursa Malaysia. The price of
a company share is determined through its market capitalization
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