SGMT 3000 Chapter Notes - Chapter 3: Competitive Advantage, Profit Margin, Economic Surplus
Document Summary
Internal analysis: distinctive competencies, competitive advantage, and profitability. Customer churn: number of subscribers that leave a service within a given time period. Costs -600 to acquire a customer for phone companies and it takes a long time to recover fc of customer acquisition: high churn rates = less profitability. Some companies invest to provide the highest quality service and become an innovator: allows you to be more responsive to customers and gain greater efficiency. Important to understand: processes that help a company crease value, role of resources, capabilities and competencies, importance of efficiency, innovation, quality and customer responsiveness, sources of advantage. What strengths boost and what weaknesses lower profitability. Important questions: what influences durability of competitive advantage, why successful companies lose competitive advantage, how company avoid failure to sustain advantage. Competitive advantage: if your profitability is more than average profitability of all company in the industry.