AFM241 Chapter Notes - Chapter 2: Fixed Cost, Human Capital, Switching Barriers

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM241
• Professor: all

Document Summary

Competitive advantage: the relative advantage in competition (market size, financial performance, etc) of one firm over its comparable market competitors. Sustainable competitive advantage: a competitive advantage that a firm actively maintains by resisting competitor"s attempts to imitate or improve on the source of the advantage. Competitive parity: a firm that earns just normal profits (revenue minus cost of inputs and opportunity cost equals 0). Business strategies: specific actions that firms take to neutralize threats or exploit opportunities by leveraging their resources and capabilities in order to gain competitive advantages within a particular market or industry. Corporate strategies: actions taken to gain competitive advantages across several markets or industries. Tobin"s q: a hybrid measure of economic/financial performance. Equals market value divided by value of assets. Business model: defines how an enterprise interacts with its environment to define a unique strategy, attract the resources and build the capabilities to execute it, and, in the process, create value for all stakeholders.