BUSI 2701 Chapter Notes - Chapter 11: Economic Surplus, Online Banking, Reservation Price
20 Apr 2016
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Ford previous strategy was creating diff cars for diff regions b/c diff consumers have diff preferences (us=trucks, uk=smaller cars) But some cars still overlapped and therefore ford new strategy the one ford strategy aim to create a handful of car platforms that ford can use anywhere in the world. Achieve bigger scale economies, manufacturing costs, chance to transfer knowledge from various facilities and overall larger profit margins. Strategy: actions managers take to attain firm"s goals. Profit: diff between total revenues and total costs. Profit if price of the output is > than the cost of producing that output. Total profit = profit/unit *# of unit sold. 2 conditions determine firm"s profit: value placed by consumers on firms g/s, firms cost of production. Value creation: activates preformed that increase the value of g/s to consumers (diff between value and cost = profit) Profits increased by: differentiation strategy: adding value to a product, low cost strategy: lowering production costs.
