Introduction

Question 1

Objectives of a firm

Answer 1

key target: maximize Shareholder Value

But there should be more, for example corporate culture

Question 2

Shareholder Value

Answer 2

Shareholder approach in the company focuses purely on the owners/ stockholders and ignores all other groups, e.g. employees, customers, suppliers, government
-> this could have a bad impact on the shareholders as well, because customers and employees are unhappy

Question 3

How to create more value than competitors?

Answer 3

• configure the value chain differently
• perform activities in the value chain more effectively
  -> specific resources and capabilities that other firms are missing
  => It shouldn’t be easy for other companies to duplicate or acquire these resources or capabilities

Question 4

The value chain (Besanko)

Answer 4

Firm infrastructure
Human Resource Management 
Technology development
Procurement (Beschaffung)
lowest line: inbound logistics, production operations, outbound Logistics, Marketing and sales, Service

Question 5

Resources that a firm “has”

Answer 5

• Firm specific assets (patents, trademarks(Markenzeichen)…)
• Brand name reputation
• installed base (e.g. network externalities)
• Organizational culture!!!
• Workers with specific human capital

Question 6

Capabilities/Core competencies that a firm “can do”

Answer 6

• Activities a firm does well compared to other firms
• particular technologies and special functions
• valuable across multiple products or markets

Question 7

Summary: Why is Corporate culture important?

Answer 7

positive effect on the stakeholders -> stakeholder value promotes shareholder value (employees are willing to work) -> positive effect on the whole firm