New Business

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Unit 11

• New Business

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Teaching Learning Objectives

• To enable Ss to talk about new business
• To familiarize Ss with vocabulary related to
  economic terms
• To develop Ss listening and reading skills
• To improve Ss skills dealing with numbers
• To cultivate Ss problem-solving ability
• To enhance Ss business writing techniques by
  writing a letter

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Overview

• Quotation
• Starting up
• Vocabulary Economic terms
• Listening Starting new businesses
• Reading Developing a new industry
• Skills Dealing with numbers
• Case study Marcia Lee Jeans

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Quotation

• There is always plenty of business, if you are
  smart enough to get it.
  
• EW Howe (1853-1937) American writer

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Types of New business

• 1. A new start-up
• 2. Existing companies
• 1) With their existing products, companies
  can
• get new customers similar to the ones they have
  already
• find different types of new customers
• sell in new areas or countries
• 2) Companies can also develop new products
  for
• existing customers
• existing sales areas or countries
• new customers
• new sales areas or countries

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Starting up

• A.
• What conditions are important starting new
  businesses? Choose the three most important from
  this list.

? low taxes ? skilled staff ? low interest rates ? cheap rents ? stable economy ? good transport links ? training courses ? high unemployment ? a strong currency ? government grants
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Important conditions?

• Low taxes People may also talk about a flexible
  labour market, where there are not only low taxes
  on companies but also low social costs (low
  payments from companies and employees for
  benefits such as health care and unemployment
  benefit), where it is easy to fire people when
  activity decreases, and where people quickly find
  new jobs when activity increases again.

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Important conditions?

• Skilled staff People might also mention the
  requirement for a good national education system
  and good company training of employees.
• Low interest rates means that it is cheap to
  borrow money to develop new business activities.

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Important conditions?

• Cheap rents for office and factory space are of
  course more attractive than expensive ones, but
  having your office in the right place at a higher
  rent may be more attractive than having it in the
  wrong place at a lower one.
• A stable economy is beneficial because
  businesspeople are able to plan better when there
  is less uncertainty about future inflation,
  taxes, etc.

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Important conditions?

• Good transport links are important for your
  employees to get to work and for salespeople to
  get to customers, but also for distribution of
  goods if your business does this.
• Training courses provided or funded by the
  government can be helpful in developing the
  skills of budding entrepreneurs.

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Important conditions?

• High unemployment may mean that the wages you can
  pay are lower, but you may not be able to find
  the people with the skills you want if you set up
  your business in an area with a high level of
  joblessness.
• In manufacturing, a strong currency means that
  imported raw materials are cheaper but that your
  exports will be more expensive than those from
  some competing countries. But if your products
  offer more benefits, they may justify a higher
  price.

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Important conditions?

• Government grants may be used to try to persuade
  companies to set up in areas with high
  unemployment but, if the area is unsuitable for
  other reasons (such as unskilled staff, distance
  from markets, etc.), these grants will not be
  enough.

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Starting up

• B. Many economies contain a mix of public and
  private sector businesses.
• Look at the following logos of companies in
  different areas. Work with your partner and find
  out which are public sector companies and which
  are private sector companies?

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Vocabulary Economic terms

• A. Match the economic terms 1 to 10 to their
  definitions a) to j).

a) total value of goods and services produced in a country b) general increase in prices c) cost of borrowing money d) price at which one currency can buy another e) percentage of people without jobs f) people working g) low taxes to encourage business activity h) money from overseas i) official rules/regulations/paperwork j) difference in value between a country's imports and exports
1. interest rate 2. exchange rate 3. inflation rate 4. labour force 5. tax incentive 6. government bureaucracy 7. GDP 8. unemployment rate 9. foreign investment 10. balance of trade
1. c 2. d 3. b 4. f 5. g 6. i 7. a 8. e 9. h 10.j
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Vocabulary Economic terms
1. inflation rate 2. interest rate 3. exchange rate 4. GDP 5. balance of trade 6. unemployment rate 7. foreign investment 8. tax incentives 9. government bureaucracy 10. labour force

• B. C.
• Complete the economic profile.

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Listening Starting new business

• A.
• Listen
• and complete
• the
• extract.

confident determined research competitors service backup business personal
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Listening Starting new business

• B. Listen to the second part of the interview.
  Which of the following points does Yvonne say are
  important?
• business plan
• relationship with your bank
• economic conditions
• workforce
• marketing campaign

Yvonne mentions ? business plan ? relationship with your bank ? Marketing campaign
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Reading Developing a new industry

• A. The article Success in the shadow of Etna
  describes a major new industry which has
  developed in Sicily. What do you think it is?

Hi-tech
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THE HIGEST ACTIVE VOLCANO IN EUROPE
Etna
Sunset
Night view
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Reading Developing a new industry

• B. Read the first two paragraphs and answer the
  questions.
• 1. Which industry is the article about?
• Mircroelectronics.
• 2. Who is Pasquale Pistorio?
• Sicilian chairman of ST Microelectronics.
• 3. How big is his company?
• Europe's largest microelectronics group
  and
• the sixth largest in the world.

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Reading Developing a new industry

• C. Read the rest of the article and answer the
  questions.
• 1. Which other high-tech centre is compared to
  Etna Valley? How
• are the two places similar?
• Silicon Valleyboth places have a good
  university
• which works with local business,
  encouraging research.
• 2. Who provided incentives to invest in
  Catania?
• The EU, the Italian government and local
  organisations.
• 3. Why are high-tech companies keen to set up
  businesses in
• Catania?
• The large number of highly-educated,
  unemployed
• young people, government and EU incentives.

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Reading Developing a new industry

• D.
• Find words in the article with the meanings on
  the right.

1. changed completely (Para. 1) 2. trying hard to be more successful than others (Para. 2) 3. the things you need to make something (Para. 3) 4. things which are used to encourage people (Para. 4) 5. factory (Para. 5) 6. a company's equipment, buildings and services (Para. 6) 7. were better or greater than (Para. 7)
1. transformed 2. competitive 3. ingredients 4. incentives 5. plant 6. facilities 7. exceeded
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Skills Dealing with numbers

• Try and answer these questions.
• What is the population of your country?/ city?
• How many people work for your company/study at
  your institution?
• What is the average salary in your country?
• What is the inflation rate?
• Roughly how many people are unemployed?
• What is the interest rate for savings?

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Skills Dealing with numbers

• Listen to the following extracts from a radio
  business news programme. Underline the numbers
  you hear.
• a) Inflation rate 2.0/ 1.2
• b) Unemployment 1,258,000/ 1,800,000
• a) Profits increase 1.8 billion/ 1.8 million
• b) Sales increase 80/ 18
• a) Job losses 1/3 / ¼
• b) Workforce reduction 15,000/ 5,000
• a) Interest rate reduction 0.5/ 1.5
• b) Economic growth 2.8/ 1.8

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Case study Marcia Lee Jeans
Company Marcia Lee Jeans
Based in NY
Price range Upper
Segment Fashion conscious people aged 1540
Factories East coast US, not owned by Marcia Lee
Costs Kept low
Wants to expand into Europe and Southeast Asia
New factory no. of workers 2,000
Source of denim Imported from several countries
New factory location To be decided among countries A, B, C, D
Background
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(No Transcript)
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Case study Task

• You are members of the planning committee which
  must choose a location for the new factory.
• Work individually. Study the four countries and
  rank them in order of suitability as a location.
• Work in small groups. Discuss the advantages and
  disadvantages of each location.
• Meet as one group, with one of you leading the
  discussion. Decide which is the most suitable
  location for the new jeans factory.

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Country A Country B Country C Country D
Economy general Lot of debt, trying to modernise modern Unstable exchange rate Government encouraging privatisation
Growth Low Low High Average
Inflation Average Very low High Average
Interest rates High High Average High
Unemployment Very high Low High High
Transport Good rail but poor roads and seaports, new airport Good road and rail, airport, no seaport Good near ports, good airport, bad roads Bad road and rail, but 10-year investment plan
Labour skilled workforce No No No Yes, but short hours
Unionized No Yes Yes Yes
Wages Very low High Low but rising Low
Other comments business Good government grants Member of trading group, strict pollution laws, no tax incentives, high taxes Limit no profits to be taken out of country, not much paperwork, strong protest movement against foreign business Lot of paperwork, pollution problems, tax-free profits for first 3 years, part of profits into training fund
Other comments general Military government, bribery, political problems (independence for north) Stable government First free elections last year
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Homework

• Write a letter to the head of the chamber of
  commerce of the country you have chosen. In the
  letter you should introduce Marcia Lee Jeans and
  suggest a possible meeting in order to discuss
  the proposal further.

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New business was opening????
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New business was opening????

• A new business was opening ... and one of the
  owners friends wanted to send him flowers for
  the occasion. They arrived at the new business
  site and the owner read the card,.... Rest in
  Peace. The owner was angry and called the
  florist to complain. After he had told the
  florist of the obvious mistake and how angry he
  was, the florist replied, Sir, Im really sorry
  for the mistake, but rather than getting angry,
  you should imagine this somewhere, there is a
  funeral taking place today, and they have flowers
  with a note saying, ... Congratulations on your
  new location!