COMMERCE 4SA3 Chapter Notes - Chapter 11: Diminishing Returns, Human Resources, Materials Management
27 Nov 2018
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Chapter 11 global strategy - international business. Strategy: actions managers take to attain the firms goal. Profit: difference between total revenue and total costs (ii = tr tc) Profitability: a ratio or rate of return concept (ros = ii/tr) Value creation: two conditions determine a firm"s profitability: amount of value customers place on the firms good or services (perceived value, firms cost of production. Note: price a firm charges for a good or service is typically less than the value placed on the good or service by the customer. Firm is competing with other firms and therefore will charge competitively. Reservation price: price that reflects individuals assessment of the value of a product. Value creation: activities performed that increase the value of goods or services to consumers: measured by the difference between v and c. The efficiency frontier: shows all different positions a firm can adopt with regard to adding value to a product.
