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Lecture 3

MGM101 Lecture 3 - Lecture and Book notes

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University of Toronto Mississauga
Dave Swanston

Lecture 3 September-27-13 11:17 AM Why company, like Fairfax, would want to buy Blackberry? - They might be able to sell it later - They can take over the company after getting shares Why does Fairfax take blackberry as a private company? - If public, there is a possibility that some other companywill buy at a lower price - If private, they have no obligation to tell anybody any action that they will do. - They can make more decisions quickly (without having to answer a large pool of investors) - They don’t have to disclose any informationto the public Blackberry lacks innovation which is making them suffer - They also lack the leadership (they suffered from delays and product efficiency) - They didn’t meet customers needs and wants and so they are falling behind Lesson: we always have to reinvent ourselvesto stay competitive Blackberry fails to recognize changes in business (they didn't modify strategies to accommodate changes) What is business? - no exact definition - Achieve goals and objectives,bring to market effectivelythrough satisfying customersneeds - maintain this by constantly innovating - Making the market bigger and fighting for share (to maintain success) - A system of integrated mission-based actions - Developand grow markets for its goods and services - Create organizational value (wealth) on behalf of its stakeholders Organizations must properly identify solutions to market place needs/desiresand deliver these solutions to the right customer,at the right place, at the right time, and for the right price creating a profit Business Foundation Commercialendeavours: the product that enter the market " refers to the markets the organization serves,the products and services it offers, and the needs it professes to meet in the marketplace." Employee Interaction Employee Interaction "refers to the value-creating skills an organization’s employeesbring to the marketplace.The success of many businesses lies with the specialized skills that exist within its labour force" Organizational Efficiencyand Structure "is a reflection of the complexitiesof the business activitiesthat circulate within an organization" Build success Factors of Production - inputs (add value) to generate outputs • Assets - any resourcesthat we require to generate income/ revenue (can be intangible sometimes) • Labour - production, accounting, finance, janitorial, executives,etc • How many people, how to organize them, etc • Capital - how much money we need • Managerial acumen • Add everything to get business model composition • The role of the business manager/owneris to recognize, anticipate, and sense an opportunity to create a product/servicethat is unique, important and of meaningful value to targeted customer(s) • Fundamental to this challenge is a “Strategyand 3C Assessment” • Strategy = The specific objectivesan organization hopes to achieve during the planning cycle • 3 C’s = Capabilities,Competencies, Capacity • COMPETITIVEADVANTAGE = The advantage an organization has over its competitorsthat enables it to generate more sales, achieve greater margins (on costs), achieve a lower cost base, and attract/retainmore customers Fundamental objectivesof business 1. Short term profit • Ensures immediatesu
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