Answer to Question #147140 in Economics of Enterprise for muhammad ammar khan

Question

2014 Restructuring that eliminated 10,000 jobs and cut more than $1 billion from annual costs.
2015 New CEO took over reigns of the firm. To raise money, begins selling patent of select
portfolio and concentrates on narrow product line.
2018 Entered new markets by pushing aggressively into China, an important growth market.
2020 Share price improves/increases.

a. Explain the fundamental factors considered when making decisions to achieve various goals of a firm?
b. State the six steps in managerial decision making that lead to competitive advantage?
c. Using the ‘Four Stage Model’, describe your observations of the Firm’s changing ‘Economics of Business’.

Answer 1

Answers:

(a) profit maximization .

They should consider if the decision the firm is about to make will bring profit.

Competitive advantage.

They should know if there is any stiff competition will it favour the firm.

Policies should be driven by mission,visions and values.

They should realize employees as human resources assets and maybe involve them in decision making.

The firm should do a research and innovation in product development.

(b) Identify a problem and require a decision.

Seek information to clarify options.

Brainstorm potential solutions.

Weigh all the alternative.

Choose an alternative

Implement the plan

Evaluate the outcome.

(c)four stages module of a firm means the product life cycle and this are four modules:

Development.

The firm should introduce the product in the market and create awareness.

Growth.

When the product becomes acceptable the demand increases leading to higher revenues and an increase in competition.

Maturity.

On account of increased competition there is a pressure on a company revenue due to the market share captured by it's competitors.

Decline.

This is where the business starts.