CRI 800 Lecture Notes - Lecture 5: Sunk Costs, Dasani, Dance Troupe

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Most important costs incurred to operate business. Need to define key resources, key activities, and key partnerships. R&d research that led them to develop. Focused on keeping costs low because product in the end is a low cost product. These goods reflect who we see ourselves as. Advantages: lower fixed costs, efficiencies/synergies, buying power with suppliers (lower variable costs, lower cost per unit, brand/back office/line. Only works if different products share common processes or resources. Advantages: can build on economies of scale, risk avoidance (coke vs dasani, reach different niches (scotia vs tangerine, flexibility/trends (pepsi and 1893) Corporate consolidation is always an attempt to build economies of scale. Cash a company generates from each customer segment. Not for profit business is one where costs = revenues. Higher prices for extra frills for basic product. Eg. airlines: the job title you want for your first position. Be realistic but not defeatist (i. e. do not write down second cup barista).

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