What Might We Mean By Firm Performance

What Might We Mean By Firm Performance The firm performance is a complex term which may include different shadows of meaning as long as it relates to organizational performance, functioning of the firm and outcomes of its operations. Normally, the firm performance implies the organizational performance, including manufacturing of products and services, functioning of different units of the firm, performance of its employees and outcomes of their work in total. At the same time, the firm performance can be viewed in a broader context as a part of the business development of the firm. What is meant here is the fact that the business development mirrors the firms performance and allows to assess the extent to which the organizational performance is effective. At this point, it is important to place emphasis on the fact that the firms performance is basically measured in terms of efficiency of the firms operations. In fact, the more effective the firms operations are completed the more positive the organizational performance is and, on the contrary, the low efficiency of firms operations and employees performance means the poor firms performance. In this respect, employees performance comprises an integral part of the firms performance because, in the contemporary business environment human resources, comprise an important marketing asset of any organization. Therefore, the efficiency of employees performance affects consistently the firms performance. Furthermore, it is important to take into consideration that the firms performance is an important indicator for investors and stakeholders. What is meant here is the fact that the firms performance indicates whether the company is worth investing or not. For instance, investors are ready to invest money in firms with the positive marketing performance, whereas poor marketing performance indicates at problems firms have in their business development. As a result, investors avoid investing money in companies with poor performance because they are uncertain in the return on investments and because of high risks accompanying such investments. What is competitive advantage, in OPERATIONAL and CONCRETE terms? The competitive advantage of a company is one of the most important factors that define the competitive position of the company in the market. In fact, the competitive position of a company means the marketing position and performance of the company compared to its major rivals. In this regard, it is necessary to pay a particular attention to the return on investments rate of the company because the higher is the return on investments and lower risks associated with investments and business development of the company, the better is the marketing position of the company. In fact, the company with the high return on investment can count for the steady improvement of its marketing and competitive position because it can take advantage of its business development and growth which occur due to the high return on investments. In addition, the competitive advantage should be unique, relevant and sustainable. At the same time, it is important to distinguish competitive position in operational and concrete terms. In this regard, the competitive advantage in operational terms implies the advantage of the company in terms of its business development, introduction of innovations, use of management strategies, organization of production process and other operations conducted by the company. The competitive advantage of the company in operational terms is defined by its ability to take a better position compared to its rival due to a better organization of the production process and other operations conducted by the company compared to its rivals. As for the competitive advantage in concrete terms, it is important to place emphasis on the fact that the competitive advantage in concrete terms implies the advantage of the company in terms of the assets value of the company, costs of its facilities, fixed costs, and other fixed values of the company, along with the products and services provided by the company to its customers. In other words, the competitive advantage in concrete terms implies the advantage the company gains in quantity of products, revenues and other items which can be measured and assessed accurately. Finally, on analyzing the competitive advantage concept, it is worth mentioning the fact that companies have to maintain their competitive advantage. In other words competitive advantage should be sustainable to insure that the company keeps progressing. Otherwise, if the company fails to maintain its competitive advantage, it is doomed to failure because it cannot afford the competition for rivals will keep progressing and outpace the company that has stopped in its development. Question 3: Assess the merits of the VRIO framework when determining a firms competitive advantage? The VRIO framework allows to obtain the basic information on the competitive advantage of a firm. To put it more precisely, the VRIO framework focuses on four key items defining the competitive position of a firm, including value, rarity, imitability, and organization. The value of the company is very important for determining its competitive position. In terms of the VRIO framework, the value implies the ability of a firm to neutralize external threats and hold a better marketing and competitive position compared to its rivals. In such a way, increasing the value, a firm can improve its competitive position and take the lead in the industry. The rarity implies the control over resource in hands a few and the firm should attempt to limit the access of the rivals to the resources. Alternatively, the company may attempt to establish control over resources and, thus, get a consistent competitive advantage over its rivals, especially if they cannot get access to resources. Furthermore, imitability involves the protection of the uniqueness of products and services provided by the company to its customers and the ability of the company to protect its products and services from imitations from the part of its rivals. In this regard, the protection of intellectual property rights, the development of new, original and unique products is crucial because it provides the company with an excellent opportunity to take advantage and hold the dominant competitive position in the market. The uniqueness of products or services is crucial for the competitive position of the company. Finally, the organization is another important factor that determines the competitive position of the company and its competitive advantage. In this respect, it is worth mentioning the fact that the effective organization allows the company to optimize the production process and company-customer relationships. As a result, companies with a better organization has a competitive advantage of its rivals because its performance is better compared to its rivals due to the better organization of work and more efficient work of employees within the company.

The Importance Of Depreciation Expenses

Depreciation as a concept and in practice plays a very important role in a companys cash flow hence in funding. The reasons are basically two, firstly because depreciation is a way of self finance for an organization and secondly because is a way of decreasing taxes that the government claims as the company doesnt have to pay taxes on depreciation which consequently enlarges the cash flow of the company. As a term depreciation in accounting is the process of allocating the cost of a capital asset over the period of its useful life. Depreciation takes into account the decrease in the service potential of capital assets invested in a business venture, resulting from such causes as physical wear and tear in ordinary use, deterioration by natural elements or obsolescence caused by technological changes. Basically depreciation is a loss in value or a diminishment in market price of a good always taking the time factor into account. Depreciation is a rate of change in value in an asset fixed or current compared to the present value of that asset. For example if a company purchases machinery for the production of a certain product the management must take under consideration the equipments life cycle, meaning that this machinery has a certain period of time in which it can contribute to the production before it becomes useless. Useless in a sense of a newer machine will be invented in some years which will be probably faster or more capable to produce better quality. The time factor of course always varies depending on the asset. For example the usefulness of a computer may be three years before it needs replacing, as for a building may be fifty years. A Mercedes van for instance in year 2000 could be purchased at the value of 13 million drachmas and its productive life span before it needs to be replaced will probably be 8 years. After the 8 years the van purchased would cease from being of any productive use to the company and if it needs to be resoled its market value would have depreciated drastically due to the time fade from the initial purchase. Its devaluation is its year zero value less an annual percentage of the devaluation process updated annually. But depreciation doesnt apply only to current assets but also is applicable to fixed assets as well. Buildings are losing their value too taking the time scale factor under consideration again. If a new building in year 1980 was valued 100 million drachmas as a newly built structure its value by the year 2030 will be definitely decreased by the depreciation rate estimated. The most widely used method to calculate depreciation is the so called straight line method, in which the rate of depreciation is constant for the entire working life of the capital assets. Thus, if a machine cost 1 million 100 thousand drachmas and is assumed to have a 10 year useful life and a scrap value of 100 thousand drachmas at the end of 10 years, the amount of annual depreciation would be 100 thousand drachmas and the annual depreciation rate 10 per cent. Which is the annual depreciation divided by cost minus scrap value. Because depreciation is subtracted from the assets of a financial statement it is not a subject to taxation therefore the company has automatically achieved a higher cash flow status by depreciating its assets, the worth of its capital value. This can be visible from the following cash flow calculation.

Microeconomics †Product & Resource Markets

It was at Menlo Park Laboratory Complex that Thomas Edison first unveiled the incandescent light bulb in December 1879 (Bellis 2006). More than a century has passed and, in that time, his famed invention has spread all over the world, marking great cities visible to passing planes. It has diminished from an astonishing wonder to an everyday, commonplace thing. In a large portion of the globe, light bulbs have become a basic necessity, placing it among products with inelastic demand. Without the artificial lighting, all manner of work at night would have to be severely limited. Artificial lighting also satisfies the demand for abstract concepts like the feeling of security and comfort. Demand for this product is inelastic because there are no substitutes for light bulbs; no other invention can efficiently produce artificial lighting. Incandescent light bulbs can be sold for less than a dollar a piece and requires a very small proportion of income. Changes in the price of artificial lighting is likely to cause only relatively small shifts in demand. If more than a century after Edison invented incandescent lighting, a new invention was placed in the market- a paint product that provided light when supplied with a weak electrical current. This new product presents itself as a substitute, which in turn, steals dollar votes for light bulbs. The quantity of light bulbs is sure to go down as some consumers favor the new product, forcing light bulb manufacturers to either exit the industry, increase prices, lower manufacturing costs, or innovate. A lot of women around the world, even those who don’t know fashion TV and the like, want a Prada bag. They can fetch a price of some hundreds to thousands of dollars. The supply for these bags, however, is inelastic. Even if the tiniest bag were to suddenly jack up in price, the quantity of Prada bags in the market would remain the same, or even go down as Prada will realize that their market has shrunk considerably. A Prada bag is unique, requiring very specific materials and highly skilled labor, including that of the designer, put together in a controlled manner. Because there is only one fashion house for Miuccia Prada, she, as a resource, has no substitution possibility contributing to the inelasticity of supply. Reference List: Bellis, M. (2006). The inventions of Thomas Edison. Retrieved November 2, 2006, from: http://inventors.about.com/library/inventors/bledison.htm   

Homelessness And The Homeless Council Website - 961 Words

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