Notes, summaries, assignments, exams, and problems for Economics

Evaluate and Select Suppliers

The most important duty of purchasing is the right to evaluate and select suppliers. This is what purchasing personnel are trained to do.

The selection decision in sourcing teams requires that members reach a consensus in selecting suppliers.

Review Specifications

The authority to review material specifications is also within purchasing’s span of control.

Purchasing should also lead or coordinate negotiations with suppliers. This means that purchasing retains the right to control the overall process, act as an agent to commit an organization to a legal agreement, and negotiate a purchase price.

E-Procurement and the Procure-to-Pay Process

We examine in detail the purchasing process, which includes all the steps that...

Understanding the Category Life Cycle

Categories are defined as groups of products and brands where consumer behaviors are collective. The life cycle follows four distinct stages:

1. Introduction: The Barely Known Category

Opening a category means the product is entirely new, driven by innovation. At this stage, the product itself is more important than the brand. There is no direct competition, and the market segment is not yet clearly defined. The primary purchasers are early adopters.

2. Growth: The Secure Category

This stage occurs when consumers recognize, understand, and fully accept the product. While direct competition is limited because rivals often target different segments, overall competition increases. This phase requires significant...

-External Analysis: To detect Opportunities and Threats - Internal Analysis: To discover Strengths and weaknesses.

PEST Analysis

Strategic business tool used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact their business now and in the future. The framework examines opportunities and threats due to:

• Political
• Economic
• Social
• Technological forces

SWOT Analysis

Understanding TODAY TO BUILD A BETTER TOMORROW! It should be placed at the beginning of a project to begin the process of decision-making. SWOT analysis is the first stage in the planning process for a business venture or to measure almost anything that is influenced by internal and external factors.

• Strengths - Internal Factor +, favorable when

Technique No. 2: Business Model Ideation

Mapping an existing business model is one thing; designing a new and innovative business model is another. Ideation is the process for generating a large number of business model ideas and successfully isolating the best ones. Today, different business models compete in the same markets, and boundaries between industries are blurring—or disappearing altogether.

One challenge we face when trying to create new business model options is ignoring the status quo and suspending concerns over operational issues so that we can generate truly new ideas. Business model innovation is not about looking back, because the past indicates little about what is possible in terms of future business models. Business model...

The Model of Valuation of Financial Assets by the Arbitrage Pricing Theory

Stephen Ross developed this theory in 1976. It is an equilibrium model for asset valuation. Its central idea is the expected return on an asset must be a linear function of its systematic risk. The APT considers that the only risk that the market is willing to remunerate is the systematic one, since the rest of the risk can be eliminated via diversification. According to this model, the systematic risk is the fundamental explanatory factor of the performance of the profitability of financial assets, although that is not measured only by the beta coefficient of the profitability of an individual asset with respect to the profitability of the market portfolio, but by a...

Understanding the Product

A Product is anything that can be offered to satisfy a need or want.

A Product Manager understands the product and defines its best strategy.

Defining Product Strategy involves assessing external and internal performance, competitive situation, and the product's position within the overall product portfolio.

Product Attractiveness Factors include price-value, features, quality, and service mix.

Product Levels

Products can be understood at five distinct levels:

• Core Benefit: The fundamental benefit or service the customer is truly buying.
• Basic Product: The actual product features, design, quality, and packaging.
• Expected Product: The set of attributes and conditions buyers normally expect when they purchase this product.
• Augmented

Step 1 Review the Marketing Plan

1. What product/service is being marketed?
2. What is known about the market where the brand will compete?
3. What are the brand's marketing objectives?
4. How is the marketing communication expected to contribute to the marketing objectives?

Step 2, Selecting a Target Group

1. What are the relevant target buyer groups?
- Select a primary target buyer group: Existing customers (repeat purchase) / Non-customer (trial)
- Potential target audiences in terms of brand attitudes: BL (Brand loyal), FBS (First brand switchers), OBL (Other brand loyal), OBS (Other brand switchers), NCU (Non-customers)
- Communication strategies will differ significantly, depending upon the target group.
+ If the target is primarily BL or FBS,...

Consolidated Financial Statements

When Consolidated Financial Statements Cannot Be Compiled

Determine when a parent entity, which is itself a subsidiary, is *not* required to prepare consolidated financial statements:

• When the ultimate parent entity produces consolidated general-purpose financial statements that comply with full IFRSs or with IFRS for SMEs.
• When an entity has no subsidiaries other than one that was acquired with the intention of selling or disposing of it within one year.

Presumption of Control

Identify the circumstances under which control is presumed to exist:

• When the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity.
• When the parent owns half or less of the voting power of

Dimensions of Corporate Social Responsibility (CSR)

ETNOR Model

The ETNOR Model establishes the dimensions of CSR based on the type of responsibility that the action generates and the social expectations generated by each of them:

1. Philanthropic Responsibility

• Resources provided by companies with social, educational, recreational, and cultural purposes
• Contribute to the community in which they are located
• Desired by some stakeholders of the company

2. Ethical Responsibility

• Obligation to do what is right even if companies are not required by law
• Expected by some stakeholders

3. Legal Responsibility

• Obey laws, adhere to regulations
• Required by some stakeholders

4. Economic Responsibility

• Be profitable
• Maximize return on sales
• Minimize costs
• Make appropriate

Pricing Studies:

Research can be used to evaluate alternative price approaches for new products before launch or for any proposed changes in prices.

Gabor and Grainger Method:

Different prices for a product are presented to respondents who are then asked if they would buy. A 'buy-response' curve of different prices, with the corresponding number of affirmative purchase intentions, is produced.

Multibrand-Choice Method:

Respondents are shown different sets of brands in the same product category, at different prices, and are asked which they would buy.

Research for profit-oriented pricing

Research for share-oriented pricing

Quantitative approaches

Market Potential:

Maximum total sales level that can be reached in a certain market. It contributes to the...