COMMERCE 2BC3 Lecture Notes - Lecture 2: Gross Margin, Strategic Planning, Strategic Management
2 Jan 2018
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Document Summary
Business organizations exist in an environment of competition. The goal of strategic management in an organization: To deploy and allocate resources in a way that gives it a competitive advantage: the major challenges faced by organizations today (sustainable, technological & global) require companies to take a proactive, strategic approach in the marketplace. A story of how the firm will create value for customers and, more importantly, how will it do so profitability: fixed costs: costs that are incurred regardless of the number of units produced, ex. You pay the same labour cost whether a factory runs at 70% or 95: variable costs: costs that vary directly with the units produced, ex. Have the ability to cover fixed costs: ex. If a product costs and the variable cost is , your contribution margin will be : gross margin: total amount of margin you make. Calculates as: number of units sold x contribution margin: ex.
