Buyer power tends to be higher if suppliers provide undifferentiated or standard products. 3. Porter's five forces model helps to determine both the nature of competition in an industry and the industry's profit potential. 4. If all of Porter's five competitive forces for an industry are weak (low), then established companies in the industry have the potential to raise prices and earn higher returns.
The percentage of the world's output produced by the U.S. has been steadily increasing since 1960. b. Compared to the other industrial countries such as Italy and France, the U.S. has a higher rate of productivity growth since 1960. * c. Japan is gaining share of the U.S. market not only in smokestack industries, but also in high-tech industries. d. Compared to manufacturing industries, the service sectors of the U.S. economy has enjoyed much faster growth in productivity during recent decades. e. Third World Countries are more productive than the U.S.. 2.
A work environment that leads to job satisfaction is more democratic than Phil's. In the short run, Phil is more effective in terms of reducing costs and increasing productivity, but in the long term, the high employee turnover will increase company costs. I would rather work for Ben. 3. If you were Phil Jones' boss, what would you do now?
Essentials of Strategic Management, 3rd Edition Chapter 1 The Strategy-Making Process Name: __________________________ Date: _____________ 1. T F A strategy can be defined as a set of related actions that managers take to increase their company's performance relative to rivals. ANS: True PTS: 1 REF: 2 NAT: AACSB Analytic | AACSB Strategy 2. T F If a company's strategy does result in superior performance, it is said to have a competitive advantage. ANS: True PTS: 1 REF: 2 NAT: AACSB Analytic | AACSB Strategy 3.
Profit maximisation occurs when a firm produces at the point where marginal cost equal marginal revenue (MC=MR). This is the point of profit maximisation as any unit produced after this point will have a greater marginal cost than marginal revenue therefore the marginal revenue being gained from the extra unit will decrease total revenue rather than increase it, thus causing profits to decrease. A reason why a firm may want to profit maximise is that it keeps shareholder happy as they receive a greater share of dividends and also if a firm has profits they can reinvest these profits into research and development (dynamic efficiency). There are many different objectives a firm could have other than profit maximisation. The knowledge of a firm finding out where marginal costs equal marginal revenue is very difficult so some firms may not be able to profit maximise as they do not have the correct knowledge required to do so.
Companies can grow faster in a developing country than they can in a MEDC which has more competition, and with company growth comes increased investment from the company in machinery and workers, which increases consumption and an increased level of employment, who work for the company. This initial entrepreneurship leads to a multiplier effect with the new workers spending their income, due to increased disposable income and this leads to greater consumption from the workers. The investment into machinery and workers leads to an increased gross domestic product, the value of output from domestic based companies. Foreign investors would be attracted to the developing country due to the high rate of economic growth and the increasing GDP, and the investment comes as an injection into the circular flow of income, and increased foreign investment can further increase the speed of growth for a company, possibly allowing the company to expand to other nations in the long run. The increased entrepreneurship
They elect or appoint a representative to bargain on their behalf so can have a much larger effect than each individual do it themselves. Neo- classical economic theory predicts that trade unions can improve working conditions but create unemployment in competitive labour markets. If labour markets are competitive, Better working conditions (including higher wages) means higher cost of production to firms, which can shift the demand curve to the right and with the new higher wage, there would be unemployment (Q3-Q2). In this case trade union successfully created benefit for some of its members. The hourly wages of union member saver aged £12.43 in 2006, 16.6% more than the earnings of non-members (£10.66 per hour).
The basic answer is that share repurchases are great when the share price is undervalued, and not-so-great when the share price is overvalued. To put it into a more useful context, if you would otherwise reinvest your dividends or invest new capital into the company at current stock prices, then share repurchases are useful to you because the company basically does it for you. The alternative is that the company could pay you a higher dividend, but you’d be taxed on that dividend and reinvest it into the company anyway. On the other hand, if you would not reinvest dividends or invest new capital into the company at current prices, then share repurchases are not in alignment with your current outlook, and it would be better for you to receive a higher dividend. Something else to be considered is that when a company uses money for share repurchases when it could be paying a higher dividend instead, the company’s management is limiting your control and increasing theirs.
However, as for the summary of the article I will explain how each of the forces model relates to this article. The purchasing power which is also known as the buyer power is higher when the buyers have more choice. The companies are forced to add value to their products and services in order to maintain their loyalty. Many bonus programs are excellent services that customers want on-line. Customers want to solve their problems and often are more successful on-line and on phone.
They’re able to monitor and track the productivity within the supply chain allowing them to increase productivity in the sectors they feel necessary which leads them to processing more efficiently and effectively; which in results brings in more revenue to the company allowing them compete by investing more money not within the company but also within the future technology for the company. Having RFID allows Boeing to reduce cost within the company by not misplacing, losing their products within the shipment off flyable and non-flyable goods. By having products or shipments off thousands off dollar not being misplaced allows the company to save and reduce cost in that portion of the company. As well as, biggest advantage in reducing cost would be the time spent on looking for lost or misplaced parts. People tend to state “Time is money”, by having the RFID implemented for the company, reducing time spent searching on the misplaced parts could help them replace their time in doing something more productive for the company.