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MGTA01H3 Chapter Notes - Chapter 1: Oligopoly, Monopolistic Competition

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School
UTSC
Department
Management (MGT)
Course
MGTA01H3
Professor
Chris Bovaird

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MGTA01H3 Full Course Notes
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MGTA01H3 Full Course Notes
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Document Summary

Business an organization that seeks to earn profits by providing goods and services. Profit the money that remains (if any) after a business"s expenses are subtracted from its revenues. Expenses (costs) the money a business spends producing its goods and services and generally running the business. Revenues (sales) the money a business earns selling its products and services. Profits reward the owners of businesses for taking the risks involved in investing their time and money. These amounts can vary depending on their success. Most profitable companies of 2005: 1) royal bank of canada (. 3 billion) In canada"s economic system, businesses exist to earn profits for owners who are free to set them up. With consumers having freedom of choice businesses must consider what consumers want or need by either finding ummet consumer needs or better ways of satisfying consumer needs. No matter how efficient a business is, it won t survive if there is no demand for its goods/services.

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Related Questions

A diversified company's business units exhibit good financial resource fit when

A.the resource requirements of each business exactly match the company's available resources.

B.each business is a cash cow.

C.a company has the resources to adequately support the requirements of its businesses as a group without spreading itself too thin and when individual businesses add to a company's overall strengths. each business is sufficiently profitable to generate an attractive return on invested capital.

D.each business unit produces large internal cash flows over and above what is needed to build and maintain the business.

The two biggest drawbacks or disadvantages of unrelated diversification are
 
A)underemphasizing the importance of resource fit and the strong likelihood of diversifying into businesses that top management does not know all that much about. 
B)insufficient cash flows to finance so many different lines of business and a lack of uniformity among the strategies of the businesses it has diversified into. 
C)volatile sales and profits and making the mistake of diversifying into too many cash cow businesses.
D)the difficulties of competently managing many different businesses and being without the added source of competitive advantage that cross-business strategic fit provides. 
E)over-investing in the achievement of economies of scope and the difficulties of achieving a good mix of cash cow and cash hog businesses.

 

To create value for shareholders via diversification, a company must
A) get into new businesses that are profitable.
B) diversify into industries that are growing rapidly.
C) spread its business risk across various industries by only acquiring firms that are strong competitors in their respective industries.
D) diversify into businesses that can perform better under a single corporate umbrella than they could perform operating as independent, stand-alone businesses.
E) diversify into businesses that have either key success factors or value chains that are similar to their present businesses.