Fashion B: Standard 08.0101-14Business Ownership and Basic

Economics

Created by: Kris Caldwell, Timpanogos High School

(There is a powerpoint created by “Fashion Marketing” for this standard as well)

Business Industry Segments:

• Primary Market the industry segment that includes businesses that grow and produce the raw materials that become fashion apparel or accessories

• Secondary Market the industry segment that includes businesses that transform raw materials into fashion in the merchandise production phase

• Tertiary Market the industry segment that includes retail businesses such as stores

Types of Business Organization

• Retailing the selling of products to customers• Sole Proprietorship a business owned and

operated by one person• Partnership a business created through a legal

agreement between two or more people who are jointly responsible for the success or failure of the business

• Corporation a business that is chartered by a state and legally apart from the owner or owners

Fashion Risks

• Risk the possibility that a loss can occur as the result of a business decision or activity

• Risk Management a strategy to offset business risks

• Types of Risks:– Economic Risks: Changes in overall business

conditions– Human Risks: Caused by human mistakes, including

customers, employees, or the work environment– Natural Risks: Caused by natural things, like weather.

Global Economy

• Globalization the increasing integration of the world economy

• Imports goods that come into a country from foreign sources or goods that a country buys from other countries

• Exports goods that a country sends to a foreign source or goods that a country sells to other countries

• Balance of trade the relationship between a country’s imports and exports

Supply and Demand• The law of supply and demand affects pricing in

the fashion industry• Supply: the quantity of product offered for sale

at all possible prices• Demand: the consumer’s willingness and ability

to buy and/or use products• Profit: the money a business makes after all

costs and expenses are paid• Trade Quotas: restrictions on the quantity of a

particular good or service that a country is allowed to sell or trade