INTB 1209 Chapter Notes - Chapter 12: Experience Curve Effects, Organizational Culture, Product Differentiation
22 Mar 2016
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A firm"s strategy can be defined as the actions that managers take to attain the goals of the firm. Maximize profitability and profit growth (cid:1) (cid:1) Profitability the rate of return the firm makes on its invested capital. Profit growth is measured by the percentage increase in net profits over time. (cid:1) Value creation the amount of value a firm creates is measured by the difference between its costs of production and the value consumers perceive in its product. (cid:1) Strategic positioning a firm must balance value creation and cost reduction as more value creation raises the price of the product and more cost reduction lowers the value of the product. (cid:1) The firm as a value chain production, marketing, sales, materials management, r&d, hr, information systems, and the firms infrastructure each part of this value chain adds value. Primary activities r&d, production, marketing and sales, and customer service.
