Shared Flashcard Set

Details

ESSAY Steps
MIE 480
4
Management
Undergraduate 4
04/30/2014

Additional Management Flashcards

 


 

Cards

Term
First Step
Definition
High-power threat of rivalry means that competition on prices, features and services, is intense. This means that rivals reduce prices frequently, and take on added costs for product features, advertising, promotion, and services.
Term
Second Step
Definition
Profit is vulnerable to high-power threat of rivalry because it reduces price and adds to costs of product features and services.
Term
Third Step
Definition
Economies of scale means that the cost per unit produced decreases as the size of production increases. This cuts cost without hurting product features and services.
Term
Fourth Step
Definition
Therefore, economies of scale protects profit against threat of rivalry by reducing cost without decreasing the essential product features and services. If rivalry forces average price to come down, the lower costs of production from economies of scale can be passed to buyers as lower prices, while preserving profit.
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