BUS3 189 Chapter Notes - Chapter 8: Market Power, Vertical Integration, Information Asymmetry
Document Summary
Decisions that the senior mgmt makes & the goal- directed actions they decide to take to gain comp. Adv. in their industry and in the market. Calue chain describes the transformation of raw materials to finished goods. Determining what kind of products we"re going to have. Will it be national? international: increase profits, lower cost, increase market power, reduce risk, motivate mgmt. To have a higher return for shareholders and owners. If comps can"t reach their growth target their stock will fall. It"ll be harder to fuel future growth. Of course firms want to reduce their costs, it lets them have higher profits. Comps need to be motivated to grow and increase their market share and gain market power. Bigger firm = more bargaining power with suppliers and buyers. Grow in order to diversifiy products and services by competing in dif. industries. By diversification, failing in sales in one sector can be made up in another sector.