Basic economics

Agriculture Business Management WHAT IS ECONOMIC ? What you think Economics is? WHAT IS ECONOMIC ? The study of how society uses its limited resources* Economics is a social science that deals with the production, distribution, and consumption of goods and services * Thomas Carlyle, a 19th-century Scottish writer WHAT IS ECONOMIC IN TERMS OF AGRICULTURE ? Why I give you this course? ECONOMICS IS SPLIT INTO CATEGORIES  Macroeconomics - the branch of economics that studies the overall working of a national economy It is more focused on the big picture and analyzing things such as growth, inflation, interest rates, unemployment, and taxes  Microeconomics - the branch of economics that studies how households and businesses reach decisions about purchasing, savings, setting prices, competition in business, etc It focuses at the individual level, while macroeconomics looks at the decisions that affect entire countries and society as a whole INTRODUCTION Todey we are going to learn Several concepts in Business management  Introduction to Arava Agriculture business  The problem of shortage  A production possibility curve (Graph)  Decision-making  Diminishing Marginal Utility  Risk Reduction WELCOME DISCUSSION Open discussion about Economics in your country And… how is the Economics in Israel and in ARAVA? ISRAEL INTRODUCTION  Israel is a very small country  hours drive from North to south (547 km)  a 60-year-old nation  Population of 7.1 million ISRAEL INTRODUCTION  Surrounded by enemies, in a constant state of war since its founding,  No natural resources  Many people are struggling with day-2-day home economics as income is small and expenses are high  BUT… Was able to reach economic growth, at the start of 2009, some 63 Israeli companies were listed on the  NASDAQ, more than those of any other foreign country  Israel now has more high-tech start-ups and a larger  venture capital industry per capita than any other country in the world.  ISRAEL AND ARAVA AGRICULTURE BUSINESS INTRODUCTION  Arava region is a unique area in this field  The Arava is a desert valley that is running from the dead sea to the read sea  Challenging place to agriculture  Isolated from populated area  Almost 80% of the people are in the same business  Without agriculture Arava region wouldn’t survive economically PESTEL ANALYSIS  Social factors include the cultural aspects and health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety High trends in social factors affect the demand for a company's products and how that company operates For example, the ageing population may imply a smaller and less-willing workforce (thus increasing the cost of labour) Furthermore, companies may change various management strategies to adapt to social trends caused from this (such as recruiting older workers)  Technological factors include technological aspects like R&D activity, automation, technology incentives and the rate of technological change These can determine barriers to entry, minimum efficient production level and influence the outsourcing decisions Furthermore, technological shifts would affect costs, quality, and lead to innovation  ‫להוסיף פרה חולבת‬ PESTEL ANALYSIS  Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law These factors can affect how a company operates, its costs, and the demand for its products  Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones  ‫להוסיף פרה חולבת‬ THE BCG GROWTH-SHARE MATRIX  BCC Growth share matrix It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories:  Stars  Question marks  Cash cows  Dogs  It is based on the combination of market growth and market share relative to the next best competitor STARS HIGH GROWTH, HIGH MARKET SHARE  Stars are leaders in business  They also require heavy investment, to maintain its large market share  It leads to large amount of cash consumption and cash generation  Attempts should be made to hold the market share otherwise the star will become a CASH COW CASH COWS Low growth , High market share  They are foundation of the company and often the stars of yesterday  They generate more cash than required  They extract the profits by investing as little cash as possible  They are located in an industry that is mature, not growing or declining DOGS LOW GROWTH, LOW MARKET SHARE  Dogs are the cash traps  Dogs not have potential to bring in much cash  Number of dogs in the company should be minimized  Business is situated at a declining stage QUESTION MARKS HIGH GROWTH , LOW MARKET SHARE  Most businesses start of as question marks  They will absorb great amounts of cash if the market share remains unchanged, (low)  Why question marks?  Question marks have potential to become star and eventually cash cow but can also become a dog  Investments should be high for question marks BENEFITS  BCG MATRIX is simple and easy to understand  It helps you to quickly and simply screen the opportunities open to you, and helps you think about how you can make the most of them  It is used to identify how corporate cash resources can best be used to maximize a company’s future growth and profitability NATURAL DISASTERS  https://www.youtube.com/watch?v=CYOQI362d_o CURRENT PLANNING Every business must know what's going to be is Expenses in the near future, And make an assessment of income to the seem pried of time Any business activity must be Followed After examination the cash flow and Economic Perspective THE AMOUNT OF FINANCIAL INVESTMENT How much we want to invest? ?2 How much money we have ?3.How much leverage we are ready to absorb FIXED COSTS Fixed costs are business expenses that are not dependent on the level of goods or services produced by the business They tend to be time-related, such as salaries or rents being paid per month VARIABLE COSTS  Variable costs are costs that change in proportion to the good or service that a business produces.[1] Variable costs are also the sum of marginal costs over all units produced  total cost =fixed costs + Variable costs BALANCE POINT- BREAKEVEN know your expenses Calculate revenue per unit Add Variables we can find the Balance point ‫ללמד על תזרים‪‬‬ ... ECONOMIC IN TERMS OF AGRICULTURE ? Why I give you this course? ECONOMICS IS SPLIT INTO CATEGORIES  Macroeconomics - the branch of economics that studies the overall working of a national economy...WHAT IS ECONOMIC ? What you think Economics is? WHAT IS ECONOMIC ? The study of how society uses its limited resources* Economics is a social science that deals with the production,... analyzing things such as growth, inflation, interest rates, unemployment, and taxes  Microeconomics - the branch of economics that studies how households and businesses reach decisions about purchasing,