Computer Science 1032A/B Lecture Notes - Lecture 6: Cost Leadership

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The goal of a business is simply to survive. Both are based on a single concept: margin. Efficiency describes how much output you get from each unit of input. To measure efficiency, you must be able to measure input and output. Manage costs: not necessarily reduce- increase cost of good if higher return Effectiveness describes how well you achieve your objective. To measure effectiveness, you must know what that objective is. Manage revenue: not necessarily increase- maintain steady revenue if market is saturated. The approach it takes toward competing in its industry, also influences its value chain. A company"s competitive strategy determines how it will try to use five competitive forces and how it will respond when other firms try to leverage them. The way a company"s value chain functions and the way it deals with competitive forces combine to determine its success.

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