INTRODUCTION TO BUSINESS Limited liability companies

LOGIC (LLCs):
- A limited liability company
Definition of Business combines the pass-
v A business is defined as an through taxation benefits
organization or of a partnership with the
enterprising entity limited liability benefits of
engaged in commercial, a corporation.
industrial, or professional
activities. Definition of Logic
v Business types range v a proper or reasonable
from sole proprietorships, way of thinking about or
corporations, understanding something.
partnerships, limited v a science that studies the
liability companies. principles of correct
reasoning.
Types of Businesses v Logic is a process for
Sole Proprietorships making a conclusion and a
- As the name suggests, a is tool you can use.
owned and operated sole
proprietorship by a single LOGIC : THE SCIENCE & ART OF
natural person. REASONING
Partnerships - Derived from the Greek
- A partnership is a business word "LOGOS" which
relationship between two means "STUDY" and
or more people who join "REASON".
forces to conduct - A branch of philosophy
business. Each partner that explores the way we
contributes resources and reason (how do we come
money to the business to logical conclusions
and shares in the profits about surroundings and
and losses of the business. life.
Corporations - Both a SCIENCE and ART
- A corporation is a of CORRECT THINKING.
business in which a group
of people acts together as
a single entity.
 As a SCIENCE:
- It needs a body of data
(i.e terms & propositions)
- Adheres to certain
procedures, system,
method in drawing out
conclusions.
- Aims to arrive at validity
of every argument.
The foundation of a logical
As an ART:
argument is its proposition or
- It involves learned and
statement.
practiced skills that would
- The proposition is either
direct reason toward
accurate (true) or not
distinguishing good &
accurate (false)
correct arguments from
- Premises are the
bad and erroneous
propositions used to build
arguments.
the argument.
- The argument is then built
It attempts to:
on premises.
- Define correct
- Then an inference is made
reasoning/thinking;
from the premise
- Distinguish arguments;
- Finally a conclusion is
- Picked out flaws and
drawn
weaknesses in reasoning;
- Logic is happening in our
1. An example of logic is
daily life, everyday we use
deducing that two truths
logical thinking;
imply a third truth as
- Logical thinking comes
shown below:
naturally to the human
mind;
Premises: Bicycles have two
- Process where we are
wheels. Jan is riding a bicycle.
more familiar than we
Conclusion: Jan is riding on two
realize.
wheels.
Explanation: The premises are
true and so is the conclusion.
Premises: All squares are buy this car, should I seek
rectangles. medical attention.
All rectangles have four sides. - People are not very good
Conclusion: All squares have four in reasoning because they
sides. often fail to separate
word meanings with the
2. An example of logic is reasoning process itself;
deducing that two truths - Logic can provide
imply a third truth as explanations for answers;
shown below:
Critical Thinking
Premises: Red lights prevent - Act of the mind working
accidents. Mike did not have an out with thought and
accident while driving today. related truth.
Conclusion: Mike must have - Think it twice. Don't take
stopped at a red light. things for granted easily.
Explanation: Mike might not have - Be the MASTER of your
encountered any traffic signals at own life.
all. - Always ask the WHY -
QUESTION. Try to find out
Therefore, he might have been the reason (THE
able to avoid accidents even PREMISES) why certain
without stopping at a red light claim (THE CONCLUSION)
can be supported.
IMPORTANCE OF LOGIC TO - Examine the relationship
LIFE GENERALLY between the reason and
the claim.
- In our daily life we think - A critical thinker is a truth-
and made arguments in pursuer.
dealing with our friends,
colleagues, family and in
business organizations.We
need to reach valid
conclusions based on
facts;
- We use logic in our
everyday lives should I
BRIEF HISTORY OF LOGIC - Developed another
element of logic " the
propositions";
- Chrysippus treated every
proposition as either true
or false and developed
rules for determining the
truth or falsity of
Aristotle : 322-384 BC compound propositions
- Greek philosopher, started from the truth or falsity of
logic and known to be the their components.
" Father of Logic";
- Introduced the
fundamental element of
logic are the terms;
- Arguments are evaluated
good or bad depending on
how the terms are
arranged in the Galen : 129-199 A.D
arguments; and - A physician, developed
- Compiled his logical work the theory of compound
in his book "The Organon" categorical syllogism.
- Syllogism is a deductive
argument that is
concluded from the two
premises. They are
common & clear. While a
categorical syllogism
contains three std form of
proposition.
- Example: All cows are
mammals. (major
premise)
- All mammals are animals.
(minor premise)
Chrysippus : 206-279 BC - Therefore, all cows are
- Founder of the Stoic animals. (conclusion)
School;
 - He also conducted
exhaustive study on valid
and invalid syllogism and
contributed to the
development of
metalanguage which is a
Peter Abelard (1079-1142) higher level language used
- Reconstructed and refined to discuss linguistics such
the logic of Aristotle & as words, terms,
Chrysippus; propositions etc.
- He developed the theory
of universals that traced
the universal character of
general terms to concepts
in the mind rather than to
"nature" existing outside
of the mind. Gottfried Wilhelm Leibniz (1646-
- Distinguished the 1716)
arguments that are valid - A genius who attempted
because of their form to develop a symbolic
from those that are valid language or Calculus that
because of their content, could be used to settle all
but held the only formal forms of disputes whether
validity was the conclusive be in theology, philosophy
one. or international relations.
- Known as the "Father of
Symbolic Logic"

William of Ockham (1285 -1349)

- Concentrated on modal
logic, a kind of logic that Gottlob Frege (1848 - 1925)
involves such notion as - Laid down the foundation
possibility, necessity, of modern mathematical
belief and doubt. logic
 - His "Begriffschrift" sets authenticity of the
forth the theory of transaction. The policy of
quantification. flagging such a transaction
is an example of a
business rule; actual the
process of flagging the
transaction is an example
of business logic.

Alfred North Whitehead (1861 -

1947) & Bertrand Russel (1872-
1970)
- Introduced the "Principia
Mathematica" attempted
to reduce the whole of
pure mathematics to
logic.

Business Logic
Ø Business logic is the
custom rules or
algorithms that handle
the exchange of
information algorithms
between a database and a
user interface.

Example:
Ø A credit card issuer's
business logic may specify
that out-of-state credit
card above a certain limit,
say Php20,000, be as
suspicious and the is
transactions flagged suer
contacted as soon as
possible to confirm the
BUSINESS MODEL homogeneous needs,
characteristics, or
What Is A Business Model? behavior.
v A business model is a
conceptual structure that What Value Does The Business
supports the viability of Deliver To The Customers?
the business and explains v This is the most important
who the business serves component of a business
to, what it offers, how it model that answers
offers it, and how it several key customers and
achieves its goals. business’s value related
questions.
According to Management Guru
Peter Drucker: Revenue model
v A business model is Two Components:
supposed to answer who ü The cost structure
your customer is, what includes all the expenses
value you can create/add that the business incurs in
for the customer and how creating and delivering
you can do that at value to the customers.
reasonable costs. ü The revenue streams
include all the primary
What Are The Components of A and non-primary revenue
Business Model? streams that the business
1. Customers utilizes.
2. Value proposition
3. Operating model, and
4. Revenue model

Who Is The Customer?

- The customer forms the
heart of a business model.
It answers who the
company plans to sell its
offerings to. A business
usually groups customers
into different segments
with certain
Types Of Business Models 1. Manufacturer
ü A manufacturer makes
1. Manufacturer finished products from
2. Distributor raw materials. It may
3. Retailer sell directly to the
4. Franchise customers or sell it to
5. Brick-and-Mortar a middleman i.e
6. Ecommerce another business that
7. Bricks-and-Clicks sells it finally to the
8. Nickel-and-Dime customer.
9. Freemium Examples – Ford, 3M,
10. Subscription General Electric
11. Aggregator
12. Online Marketplace 2. Distributor
13. Advertisement ü A distributor buys
14. Data Licensing / Data products from
Selling manufacturers and
15. Affiliate Marketing resells them to the
16. Dropshipping retailers or the public.
17. Network Marketing Examples – Auto
18. Crowdsourcing Dealerships.
19. Blockchain
20. High Touch 3. Retailer
21. Low Touch ü A retailer sells directly
22. Auction-Based to the public after
23. Reverse-Auction-Based purchasing the
24. Razor And Blades products from retailer
25. Reverse Razor And Blades a distributor or
26. User Community wholesaler.
27. Multi-sided platform Examples – Tesco.
model
28. Hidden revenue business 4. Franchise
model ü A can be a
29. Bundling Business Model manufacturer,
30. Fractionalization business distributor or retailer.
model Instead of creating a
new product, the
franchisee uses the
 parent business’s Examples – Almost all
model and brand apparel companies
while paying royalties nowadays.
to it.
Examples – McDonald’s, 8. Nickel-and-Dime
Pizza Hut, Jollibee ü In this model, the
basic product
5. Brick-and-Mortar provided to the
ü A traditional business customers is very cost-
model is where the sensitive and hence
retailers, wholesalers, priced as low as
and manufacturers possible. For every
deal with the other service that
customers face-to-face comes with it, a
in an office, a shop, or certain amount is
a store that the charged.
business owns or Examples – All low-cost
rents. air carriers.
6. E-commerce
ü The E-Commerce 9. Freemium
business model is an ü This is one of the most
upgradation of the common business
traditional brick-and- models on the
mortar business Internet. Companies
model. It focuses on offer basic services to
selling products by the customers for free
creating a web store while charging a
on the internet. certain premium for
extra add-ons. So
7. Bricks-and-Clicks there will be multiple
ü A company that has plans with various
both an online and benefits for different
offline presence allows customers.
customers to pick up For example, the basic
products from the version of Dropbox comes
physical stores while with 2 GB storage. If you
they can place the want to increase that
order online. limit, you can move to the
 Pro plan and pay a 12. Online Marketplace
premium of $9.99 a ü Online marketplaces
month for it. Other aggregate different
examples are Zoom, sellers into one
Dropbox, MailChimp, platform who then
Evernote etc. compete with each
other to provide the
10. Subscription same product/service
ü If customer acquisition at competitive prices.
costs are high, this Examples : Amazon,
business model might Alibaba
be the most suitable
option. The 13. Advertisement
subscription business ü Advertisement
model lets you keep business models are
customers over a long- evolving even more
term contract and get with the rise of the
recurring revenues demand for free
from them through products and services
repeat purchases. on the internet. Just
Examples: LinkedIn, like the earlier times,
Prime, Dollar Shave Club these business models
are popular with
11. Aggregator media publishers like
ü Aggregator business Youtube, Forbes, etc.
model is a recently where the information
developed model is provided for free
where the company but are accompanied
various service with advertisements
providers of a niche which are paid for by
and sell their services identified sponsors.
under its own brand.
ü The money is earned 14. Data Licensing / Data
as commissions. Selling
Examples – Uber Airbnb ü With the advent of the
Oyo Zillow internet, there has
been an increase in
the amount of data
 generated upon the by partner sellers who
users’ activities over receive the order as
the internet. This has soon as the store
led to the advent of a receives an order from
new business model – the ultimate customer.
the . Many companies Examples are China
like data licensing brand,
business model Dropify ,Oberlo ,OJMD
Twitter and Onesignal Dropshipping.
sell or license the data
of its users to third 17. Network Marketing
parties who then use ü Network marketing or
the same for analysis, multi-level marketing
advertising, and other involves a pyramid
purposes. structured network of
people who sell a
15. Affiliate Marketing company’s products.
ü A commission-based
model where the 18. Crowdsourcing
affiliate builds its ü Crowdsourcing
business around business model
promoting a partner’s involves the users to
product and directs all contribute to the value
its efforts to convince provided. This
its followers and users business model is
to buy the same. often combined with
Examples are Clickbank, other business and
JVzoo, CJ affiliate, revenue models to
WarriorPlus, Amazon, create an ultimate
ffiliate program. solution for the user
and to earn money.
16. Dropshipping Examples of businesses
ü A type of e-commerce using the crowdsourcing
business model where business model are
the business owns no Wikipedia reCAPTCHA
product or inventory Duolingo, Youtube
but just a store. The
actual product is sold
 you do not have to
19. Blockchain maintain a huge sales
ü The Blockchain is an force, your costs
immutable, decrease, though such
decentralized, digital companies also focus
ledger. It is a digital on improving
database that no one technology to further
owns but anyone can reduce human
contribute to. intervention while
Many crypto-currencies making the customer
like Bitcoin, Ethereum, experience better at
and Litecoin use the same time.
Blockchain technology Examples – Ikea,
based business model. SurveyMonkey , use of
digital platforms in
20. High Touch banking transactions.,
ü The High Touch model Zendesk
is one which requires
lots of human 22. Auction-Based
interaction. The ü This business model
relationship between involves the listing of
the salesperson and an offering by the
the customer has a seller and the buyers
huge impact on the making repeated bids
overall revenues of to buy that offering
the company. while fully aware of
Examples – Hair salons, other bids by other
consulting firms. buyers.

21. Low Touch 23. Reverse-Auction-Based

ü The opposite of the ü The reverse-auction-
High Touch model, the based business model
low touch model is often used when
requires minimal there are several
human assistance or sellers selling a similar
intervention in selling offering to a single
a product or service. buyer.
Since as a company,
24. Razor And Blades Glassdoor is a good example of
ü Razor and blade such a user community, Hubspot.
model is used by Shopify.
companies which deal
in complementary or 27. Multi-sided platform
companion products model
like razors and blades. ü Any company that
offers services to both
25. Reverse Razor And Blades sides of business
ü A business employing carries out a multi-
a reverse razor and sided business model.
blades model offers The perfect example is
the low margin item at LinkedIn, which
a very less price or provides subscription
below the cost to services to people to
encourage the sale of find job opportunities
the high margin as well as to HR
product. managers to find
Example: Apple employs candidates for their
this business model vacancies.
perfectly. Apple’s App Example: LinkedIn
Store and iTunes sell Freelancer.com
apps, movies, songs, etc.
at reasonable rates but 28. Hidden revenue business
charges on premium model
prices its devices like ü This model refers to a
iPhone, iPad, and Mac revenue generation
system in which users
don’t have to pay for
26. User Community the services offered,
ü Driven by the , this but the company still
business model earns revenue streams
involves granting from other sources.
access to a network Examples: Instagram,
effect community or a Google, Facebook, Twitter
network in return for a
membership fee.
29. Bundling Business Model
ü Bundling is a business
strategy that combines
products or services to
offer a package
gathered as a single
combined unit to sell
at a comparatively low
price.
Examples: Microsoft
Office 365 (PowerPoint,
Excel, Word, OneNote,
Outlook) Value meal at or
Burger King McDonald’s,
Printer and ink

30. Fractionalization business

model
ü The fractionalization
model is selling a
product or service for
partial usage or
separate parts. It’s a
which divides
products and services
into further
subcategories t
strategy o introduce
variety in the
products, charging for
each category
separately.
Example: You can sell a
pizza by the box or
individual slices of
different varieties
(cheese/ pepperoni).