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Competing on price
CPI= Core performance indicator
Low tech grows aroudn 8-10% with 65% market share
High tech grows at 15-20% with 35%
Growth rate
Price
Age
MTBF
Size
Purchasing criteria
Rand d
Marketing
Prodution
Hr
Finance
Order
Sales forcast-inventory= production level
R+D= 1.2M
Plant= 2.5
Marketing= 1.0
Sales chanels= .5M
Estimate costs of launching a product
Simulation
September 11, 2014 8:40 AM
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What is a business: a system of intergrated acinos designed to ensure that an organization
grows a market for a good/service which creates additional wealth for its shareholders
Capabilities
Competencies
3 c assesmtn allows management to determine what it is capable of doing in terms
of exploiting an opportunity in the market
Capacity
3c assesment
When a company can offer a product/service that has more value to the consumer than
other competng products
Comparative advantage
Pg 6 fig 1.3
Business planning cycle
Short term profit
Long term growth and profitability
Social enviromental
Fundemental obectives of business managers
Profit= bottom line profit
Return on equity
Profitability= how effectivley an organization uses its assets to create profit
Profitvs profitability
A statement that summeries whom a product or service is geared towards
Indicates the benefits that the purchaser will realize as a result of buying the product
Communicates how the product differs from competetiors
What is the cost base for producing and supplying the good
Brand strenght
Emotional benefits
Servicce benefits
Do I have a strong enough value proposition to compete in the market
segment
Difference between value proposition and price of product is the percieved positive
value of the product
Price/quality relationship
Chapter 1
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Productivity gains, business investment, tech improvements, wage increases and good exchange rates are necessary for
an economy to remain competitive
Political stability, low national debt, established factors of production, national banking system (monetary policy), good
level of investment, low inflatino, low corruption, legal system, comparative advantage
Copyright enforcement
Black market reduction
Adherence to fundementals of fair trade
Market operations
Responsible soverign debt management
Global Growth
Administer trade agreements
Forum for trade negotations
Settle trade disputes
Review national trade policies
Assist developing countries in financial training
Links to other international organizations to ensure the smooth
WTO Goals
Global rebalancing
Managing the planet
Improve or reinvent
The state of nations
Acceleration of connectivity
Rise of political economies
Forces shaping the global economy
Gdp expansion or contraction of the country
Increase in income= increase in value
Domestic level of income
Supply of capital
The ability of the country to maintina inflation
Ability of the country to operate within acceptable balance of trade ranges
Ability of the governenment to manage its budget effectivley
Flucuations of currency rate
Chapter 3 globalization
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Ease of setting up operations
Degree of control
Magnitude of risk
Capacity to provide financial needs
The anticipated skills required
Must consider 5 things when starting a business
They must take into consideration of liability exposure and potential risks
Managers need to be aware of their financing limits
Internal source
Opertions
Short term: expected to be paid for during the current year
Obligated to repayment
Debt financing
Trading ownership for cash
Ipo:initial public offering
Apo: additional public offering
Equity financing
3 ways to fund
Interest rate is determined by rating quality and duration of bond
Bond
Rent expense
Marketing/accesabelity
Income statement
Operational transactions
Asset purchases
Issuing stock
Investment/divestment
Capital asset transactions
Liquidity
Solvency
Capacity
Effeciency
Focus of financial statement analysis
The ability to meet short term debts
Liquididty
The ability to meet long terms debts
Solvency
The relationship between assets and debts
a= L + O.E
Highly levereged companies are increasing fixed costs
Leverging works when the cost of capital is less than the return
Leverging
ROS = net income/ sales
Revenue /assets
Asset turnover= revenue generated off assets
ROA= Net income/asset
ROE = Net income/equity
Key metrics
Financial statements
financial
markets a...
14 - need
to know r...
Chapter 13 capital markets and financial statements
September 21, 2014 11:12 PM
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The ability to create a strategic market position (strategic plan)
The ability to execute the tacics within the plan
Where do we want to play and how will we win?
Business success is determined by
The overall mission of the organization
The broad goals
The fundemental reason for being in business
Wallmart: helping people save money so they can live better
Purpose
What the compnay wants to become
Vision statement
Which markets should be targeted
Markets
What new products or services can be offered
Services can include payment options or financing options
Products and services
Human, capital and plant
Resources
The infastructure of the business
Distribution chanels
Warehouse setup
Business configuration
Defining who is responsible for what
Responsibility and accountability
Core elements of a strategy
Political, Economic, Societal, Technological, Enviromental and Legal
PESTEL
Used to analyze the market you are already in
Competition
Ease of entry
Product subsitution
Power of suppliers
Power of buyers
Porter's 5 forces
Perfet competition
Mc
Oligopy
Mmonopoly
Types of markets
Strenghts weakness oppertunities and threaths
SWOT analysis
Capabilities, competencies and capacity
3 c's
Internal/external analysis
Specific, measurable, actionable and controllable
SMCA
The ability to see where the market is going and position your
products accordingly
Strategic advantage
Superior quality
Better effeciency
Operational advantage
Competetive advantage oppertunities
What entices consumers to pick your product over other products
Competetive advantage
Session 9 -
Strategy F...
Chapter 6 business strategy
October 5, 2014 1:05 PM
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Innovation
Quality
Cstomer responsiveness
Efficiency
Competetive advantage oppertunities
What the organizaiton hopes to acomplish and where it hopes to compete
Corporate
How the business intends on achieving its corporate goals
Business level
What has to be executed in order for the business and corporate strategy
to be met