If a firm has created value, is it also always able to capture that value? How does a firm create value and then what must it be able to do to capture that value? In your answer, provide an example of...

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If a firm has created value, is it also always able to capture that value? How does a firm create value and then what must it be able to do to capture that value? In your answer, provide an example of a firm that has been able to create value. Then discuss whether or not you believe it has captured that value and if so how it was captured and if not why it was not able to do so.




Managerial Economics Organizational Architecture, 7th Edition (James Brickley, Clifford W. Smith etc.) (z-lib.org) (1).pdf
Answered Same DaySep 21, 2022

Answer To: If a firm has created value, is it also always able to capture that value? How does a firm create...

Komalavalli answered on Sep 22 2022
57 Votes
Q1)
The economic value of a product is a measure of the benefit it provides to an individual or organization. It is not the same as market pricing or market value, and t
he gap between the two is known as consumer surplus. A corporation develops value by trying to make something valuable for its customers. A corporation must create a profit in order to collect this value. They accomplish this by selling their creations for more than they spent for them.
Coca-Cola is an example of a firm that has produced value. They generate value not just with their beverages, but also with their brand. They have captured this value by maintaining profitable over time, and they have leveraged the strength of their brand into a worldwide corporation.
In terms of operational strategy, the bottling alliance has assisted Coca-Cola in capitalising on expansion prospects through vertical acquisitions. Coca-Cola benefits from the worldwide alliance by lowering shipping costs and creating economies of scale. This is an example of an operational department functional aim.
Its advertising and marketing budgets are used for newspaper, radio, and television ads, marketing campaigns, point-of-sale sales, and sales promotions. However, the majority of their advertising budget has always been dedicated to bottling activities. A&M costs and corporate revenue have both decreased significantly as KO has re-franchised the majority of its bottling business over the last two years. However, Coca-marketing Cola's expenditure ($5.8 billion or 18.3% of sales in fiscal 2018) is still far more than PepsiCo's ($4.2 billion or 6.5% of revenue) for the same period. This is partly due to PEP's decreased expenditure...
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