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Unformatted text preview: Week 2 Resources & Rent BCG growth/ share matrix HIGH Relative market share (competitive strength) LOW STAR ? CASH COW DOG (Cash usage) LOW Star generate most profit and requires most $ ? generate little profit, BUT requires more $ Cash cow generate most profit and requies little $ Dog generate least profit and requires least $ Resource based view (RBV) of firm (1990s): Corporations were fortfolios of competencies rather than simply portfolios of business. Competitive advantage---- the ability of a firm outperform rivals. Economic profit (∏) = Accounting profit + opportunity cost Value creation: Value crated= comsumer surplus + producer surplus (Profit) = (B-P) + (P-C) B→ consumer maximum willingness to pay P→ selling perice C→ cost of production Resources and Rents 1. Tangibles —plants, equipmenta, raw materials. E.g. Rio’s operation is mainly based on the tangible assets of the company. And they are considered as a very important part in its business operation. assets of the company....
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- Three '09
- Marketing, generate little profit