In order to be a price leader you must be able to manage and lower costs

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

Markets being served

Products being offered
Needs of of the market
Comercial endevours
Success of business depends on the value creating skills of its employees
Employee interaction
Organizational efficiency and structure
These 3 things allow a business to function
Assets+labout+capital+managerial accumum= business model
The role of management is to anticipate, recgonize and sense an opportunity to create a
product which is felt to be unique to a targeted custoemr

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

In determining value proposition the management team must ask 5 questinos

Value proposition = service + emotional + cost + brand + product benefits
Value propisition
A component of the value proposition
Price
The more unique and important the product the greater the opportunity to
communicate the value proposition

Difference between value proposition and price of product is the percieved positive
value of the product

Price/quality relationship
Chapter 1
September 14, 2014 7:48 PM
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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

Inelastic demand= steep curve

Elastic demand = shallow curve
Inelastic supply= steep
Elastic =shallow
Demand and Supply
If there is too much of one it is not a good thing
Economic activity= expenditures+ savings+ investment(house or asset investment for business) + credit
includes: goods/ services produced domestically, business investments, goods produced for export, gov spending
Canada and usa are driven by consumer spending
China is driven by exports
Different countries rely on different aspects to drive gdp
Gdp growth= more profits= reinvestment= greater gdp growth
Gdp growth = more people employed
Higher wages= more consuption= more gdp growth
Gdp growth = higher wages because of higher demand for labour
GDP cycle pg 50 (2.11)
GDP
Inflation: inflation in the energy and food sector will significantly increase the costs of many consumer items
Geographic clustering: Certain regions develop their own economies and since they differ from other regions it is
difficult for the governemtn to implement policies that will not negativley effect some provinces

What impacts the canadian economy

Revenue from energy companies grows because they are traded in american dollars
Pro: reduction in price of imported goods
Cons: Tourism, manufacturing exports
Canadian dollar increase in terms of usd
Currency rates
Foreign owned entriprises are a growing trend and many Canadians are alarmed that the economy is turning into
a branch market

Branch market impact

Creates a position advantage and cost advantage
Sustanability and green initatives
Need for imigration to repace retired workers
Aging population
Canadain business will have to rely on managerial accum to stay competetive
Developing countries have lower wages and operating costs
Long term competetiveness
Small business account for a majority of corporations
Small businesses
More competetitors= more pressure to increase effeciency and productivity
Globalization
UE
Inflation
CPI
Housing Stats
Manufacturing inventory
Cpi
Price of crude oil
Stock market indices exchange rate
Retail sales
Global markets
Political
PESTEL
Chapter 2
September 14, 2014 7:50 PM
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How much influence does the governemtn have
Protectism?
Political
Socially
Enviromental
Technological
Economic
Legal
No market leader
No product differientation
Few barriers to entry
Unable to create distinctions to increase value proposition
Pure competition
Many compaines producing a similar product
True differientation is allowed to set in through advertising
Monopolistic competition
Few large players
Signifigant capital investment required
Large economy of scale required
Control over price
Oligopoly
Only one player
Large capital investment
Utlities
Monolopy
Pg 65 2.18
Rivalry among competetors
New entrants
Threath of subsitutes
Can they charge us more
Can they supply of competetors
Power of suppliers
Will buyers switch products
Power of buyers
Porters 5 forces
Competetive models
Little gov involvement
Free movement of labour and capital
Principals of private ownership
Demand and supply
Weealth creation
Open systems
.
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Companies must grow so the expand to offer their producs in other countries
New market oppertunities
Cheaper wage rates
Cost reduction opportunity
Energy and comidity companies are often invisted in by foreign companies
Resource base control
Companies want to have operation close to where they are selling their products
Closeness to market
Economies of scale
Advantages to going global
Commitment to international trade system
No or few tarrifs
Absence of protectionism
Governemtn must ensure that the domestic industry grows and that all resources
are not used for export

Balanced economic develoopment

For governemnts to adhere to international labour, evniromental and financial
practices

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
September 15, 2014 8:02 PM
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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

Staffing, revenue, expenses

Operating plan
Strategy
Creative insight- strategy thinking- strategy planning
Strategy
New Section 1 Page 10
Session+11
+-+HR+an...
A point where we must make a key descission in order to achieve our vision
Inflection point
is better for simple product where little innovation occurs
Centralized
Defined
Takes advantage of economies of scale
Mechanistic (control)
More innovation
Less effecinecy
Organic (freedom)
Where do we want to poisition our company on this scale?
Mechananstic vs organic
Rapid growth requires capital investment
Training costs
Hr costs
More workers
Too much growth can lead to diseconomics of scale
Hr and organization structure
October 14, 2014 11:09 AM
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Price (per unit) - Cost (unit)
Revenue is increased not only by adding customers
Revenue is driven by average revenue tranaction (ART) and average amounts of visits
p=revenue -expense
Volume=pims
Smaller market
Focued on premium products sold at a premium
Margin= ROS return on sales
Is your company based on volume or margin
Most important thing that shareholders look at
Return on investment (slide 4)
R+D= 1.2M
Plant= 2.5
Marketing= 1.0
Sales chanels= .5M
How long does it take to make money on this asset investment
= 5.2 million
Cost of launching a new product
Near term (core)
Supplementa products
Syngery
What can we do with the core to grow the core
Ex. Iphone 1/2/3/4
Core extention
New Markets
3 Objectives
Business system:
Differnec ebetween business model and business sysems (Slide 13)
TQM= Total Quality Management
Stake holder: Anyone who is effected by the business
Comm 103
- Sept. 16...
Notes September 16 Business and Role of GM
September 16, 2014 10:02 AM
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Companies do not always work to maximize profit
Profit = price-cost
Profit= (pxq)-(cxq)
Profit=sales-cost
Profit= tr-tc
Notes Sept 10
September 10, 2014 11:24 PM
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Value Chain processes
Supplier
The flow of products of support into the system
Inbound logistics
Transformation (r and d) (production)
Distribution of product into the market
Outbound logistics
Marketing and sales
Customer service
Buyers
Is there added value at every step
For every step there is added cost to the product that will be passed on to the consumer
This is what drives the underlying cost base
Realistic
1000000
Optimistic
1200000
Pessimistic
800000
Downside risk
600000
Range will most likely be between pessimistic and optimistic
Sensitivity analysis
Oppertunities
Forcasting
Competition-changes-new entrants-subsitute products
Are there any changes relating to industry changes
Industry structure
Consumer customer trends
Political influences
Why is it important to analyze market dynamics at the global industry and sector level
Mtbf=mean time before failure
Notes sep 18
September 18, 2014 8:52 AM
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COMM 103
FALL 201...
Notes october 7
October 7, 2014 10:07 AM
New Section 1 Page 15