Topic 1_NonMarket-1 - Topic 1: The Non-Market Business...

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Topic 1: The Non-Market Business Environment REQUIRED READINGS: Case: “ Wal-Mart’s Business Environment” Online Wal-Mart Case Discussion: 1/21—1/23 In-class Wal-Mart Case Debriefing: 1/24
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Corporate Social Strategy Corporate Social Responsibility (CSR): Firms are responsible for their entire value chain. From the beginning of production to the end of product life. Firms should think about ALL stakeholders. Market Stakeholders: customers, clients, employees, shareholders, etc… Non-Market Stakeholders: communities, governments, socially-minded non-governmental organization (NGOs), etc… Strategic CSR (profit enhancing): Manage non-market threats and look for non-market opportunities to exploit. Evaluate current and proposed government regulation. Monitor interest group activity and changing social demands.
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Non-Market Forces Public Policy Makers Firm Managers Socially-Minded NGOs (lobor union)
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Market Equilibrium Intersection of supply and demand. Demand is based on the Value to Consumers. Consumer Surplus: Difference between what customers are willing to pay and the price they have to pay. Supply is based on the Cost to Producers. Producer Surplus: Difference between the price sellers receive and the minimum supply price to cover costs. Field Trip to the Grocery Store. Social (Economic) Efficiency: (most case not best for firm.but best for society. (Best for firm->profit max) 1)Produce and sell product that consumers value more than the costs of the productive resources. Markets and Efficiency
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Topic 1_NonMarket-1 - Topic 1: The Non-Market Business...

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