Management and Organizational Studies 4410A/B Lecture Notes - Lecture 7: Petro-Canada, Price Drop, Variable Cost

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 4410A/B
• Professor: Raymond Leduc

Document Summary

(ending value / beginning value)1/compounding period 1. When looking at nancial summary, always look at top line sales and bottom line net income, big number in between (in this case cost of sales & operating, selling, general and administrative expenses) In class: look at soft drink industry in north america (pepsi & coke) Solution: avoid price competition; differentiation; strong brand; customer loyalty; high switching cost; buy out competition; communicate with competitors. Threat of new entrants: depend on barriers to entry. Ex. high initial investments and xed costs; cost advantages of existing players; customer brand loyalty; patents; scarcity of important resources; high switching costs for customers. Solution: create strong brand; patents protect; alliance with linked product / services; tie up with suppliers. Low because of costs, distribution, manufacture ( all are barriers to entry) Threat of new substitutes: ex. customer brand loyalty; close customer relationships; switching costs; relative price for performance of substitutes.