Business Economics: Company Systems and Competitive Strategies

Posted on Feb 15, 2025 in Business Administration and Management (BAM)

Item 1

    1. Economics: The study of activities related to production, exchange, and consumption, organized to meet needs. It is divided into macro-economics and micro-economics.

Company Systems

    1. The Company: A set of pooled resources with organizational structure and competence to achieve goals through a strategic plan using technological, production, trade, financial, and human functions.

    2. System: Companies are mixed systems, open to achieving goals with psycho-social functions, techniques, organized self-control, and regulation. It is divided into management and logistics processes (real and financial): inputs-transformation-outputs.

    3. General Company Operation

      Departments: Direction, HR, marketing, R&D, industrial design, production, finance, and administration.

      Economic Transactions: Market factors (supply and payments), the company and market products and services (marketing and billing).

    4. The Entrepreneur

      Responsible for establishing the business, setting goals, and making decisions to achieve them. Evolution from investor (owner) to professional management that produces goods or services by exercising delegated business activity.

    5. Types of Companies

      Economic Sectors: Primary, secondary, tertiary.

      Legal Sector: Natural or legal (civil and commercial societies).

      Size: Small, medium, large.

      Ownership: Private, public, mixed.

Economic Environment and Business

    1. Concept and Types of Environment

      1. General: Political, legal, demographic, economic, cultural.
      2. Specific: Activity, suppliers, customers, competitors, state.

    2. Competitive Forces (M. Porter)

      1. Rivalry of existing competitors.
      2. Threat of new entrants.
      3. Threat of substitute goods.
      4. Bargaining power of suppliers.
      5. Bargaining power of customers.

    3. Competitive Strategies

      1. Cost Leadership: Low cost.
      2. Differentiation Leadership: Distinct product and value.
      3. Segmentation Leadership: Customer specialization.

    4. Value Chain

      1. Support Activities: Infrastructure, management, design, shopping.
      2. Primary Activities: Innovation processes, production, marketing.
      3. Margin: Value generated less costs.

    5. Analysis of the Situation for the Company

      1. Environment: Study of environmental change.
      2. Market and Customers: Relevant market segmentation.
      3. Current and Potential Competition.
      4. Internal Resources and Capabilities of the Company.

    6. Social Responsibility and Ethics

      Avoid social costs, unemployment, discrimination, promote sustainable development, labor quality, business reputation, and moral and ethical commitment.

Item 4

    1. Company Direction and Sub-Administrative System

      1. Administration (as per Fayol): Planning, organization, direction, HR, and control.
      2. Control Levels: Senior management (conceptual skill), middle management (human), and operational controls (technical).
      3. Decisions in the Company: Strategic (long term and conceptual), tactical (medium-term and reversible), and operational (short term and standard).

    2. Strategic Management and Competitive Advantage

      Analysis: Threats and opportunities.

      Planning: Future implementation, development, and control to achieve strategic business objectives.

      Competitive Advantage: Ability to get a higher benefit. Cost advantage in differentiation and segmentation.