Exam 2 Flashcards
(35 cards)
Competitive advantages sustainability is a function of 3 factors
The rate core competencies become obsolete
Availability of substitutes
Imitability of core competencies
Global mindset
Ability to analyze, understand and mange an internal org. independent of culture
4 Criteria of Sustainable advantage
VRIS - Jay barney
incompetencies
can kill quickly
Deficiencies
Competitive disadvantage
Core competencies
Competitive Parity
Distinctive Competencies
Competitive advantage
Value chain
template that firms use to analyze their costs positions to carry out chosen stategies
Value chain activities
Firm completes in order to support the work being done to produce, sell, distribute and create value
To be a core competency:
Perform an activity in a manner that provides superior value
Perform something the competitors can’t
Value creation system
each part of a system depends on other parts of the system to create value
Social capital
Strong relationship with stakeholder
Junk Bond
Not a high credit rating to be investing in
Value
only exists if voluntary and when the transaction has happened
Capital structure
Balance sheet items
Fundamental analysis
“Discount cash flow” Most pristine way to estimate economic value
Natural Monopoly
Extremely high barriers for entry, but often regulated by a government
Public good should:
Non excludable
Nondepleteable
4 conditions for a Free Market
Voluntary transaction
Private Property
Competition
Laws against fraud and theft
Economic value
Max amount of money an economic agent is wiling to pay
Discount rate
Has and inverse relationship with the present value
WACC
sets the bar for the worst case min return needed (DR<0 dont invest)
Hurdle rate
Min level of risk adjusted return investors require for a specific investment (DR>0 invest, if neg don’t)
Digital strategy
Uses tech to help a firm understand its customers and their needs to create more value
