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Week 12 COMM200 Lecture Notes.docx

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Queen's University
COMM 200
Gary J Bissonette

COMM200 Week 12 Notes 10 key takeaways:  Simple formula for success o Well-directed and positioned strategy + efficient and effective tactical execution = business growth and profitability o Critical factors behind success formula  Target the right customers  Create value that is meaningful and relevant  Build a business system which delivers the solution to the customers via the 6Rs (right product, right place, right time, right price, right distribution etc.)  Execute required processes to deliver “the goods”  Select markets which will remain attractive and relevant for the future  Understand risk/reward trade-off  Ensuring that the plan makes sense o Execute customer, competitor and company analysis o PIMS = price focussed, profit is volume based, ROS = per unit focus, profit driven on a per unit basis o Company analysis  3Cs analysis  SWOT  determine product market fit  Tactical success is driven by aligning the business system to support the organizations strategic intent o Industry demand life cycle (embryonic phase, rapid growth phase, maturity phase)  Change in Customer base = new customers + existing customers – deserting customers  What aspect of this formula are we going to leverage to further grow the company o Emerging nations – still have new customers and can acquire these (ex. blackberry can get more customers in this market)  Managing an organization requires a “balanced” approach o Four quadrants: customer & markets, financial, asset development, internal business processes  Managing means knowing where the weak links lie (or potentially lie) in your organization’s strategy o Is the intent of the business to run for a short-period of time with an exit option or to be a long-term player? o Absence of a “plan b” leaves a company susceptible to exposure and downside risk o Fatal/flaw analysis  Inadequate pricing  Under-capitalization  Weak management competencies  Insufficient marketing research  Poor industry assessment  Absence of well-focused execution strategy  Understanding capitalization requirements is core to success o Three critical metrics  Depth of capital need  Length of capital burn  Potential of revenue flow to be tapped o Cash flow positive occurs when revenue overcomes initial capital commitment; covering direct immediate operating expenses; point where you stop burning dollars o Breakeven point = minimum acceptable position for the business, you’re in a position to cover all your expenses o Determine what is the capital investment and determine how much revenue can be generated  Managing an organization is a continuous exercise in risk vs. reward tradeoffs  The purest, true sustainable competitive advant
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