Reflection and Discussion Forum Week 5

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1 Reflection and Discussion Forum Week 5 Yamini Tanavade University of the Cumberlands StrThnk, DecMk & Inn Dr. Michael Knight February 07, 2023

2 A firm's profitability analysis is an important tool to assess and evaluate the company's competitive advantage. The data used in a profitability analysis can be derived from various sources, including financial statements, administrative records, surveys of customers and suppliers, or other proprietary information (Rothaermel, 2020). To properly analyze a firm's competitiveness, it is necessary to understand its operating efficiency and pricing power. Additionally, government regulations and economic conditions may impact a company's profitability over time. A thorough profitability analysis allows companies to make effective strategic decisions that will help them stay ahead of their competition (Rothaermel, 2020). The purpose of conducting a firm profitability analysis is to assess and evaluate competitive advantage. A key aspect of this evaluation is determining whether a company has an advantageous financial position relative to its competitors. Another important consideration when assessing competitive advantages includes ascertaining the efficiency with which businesses operate and their ability to generate profitable revenues (Rothaermel, 2020). Different types of analyses can be used to measure these factors: historical data can help analysts track changes over time, comparative reports can identify similarities and differences between two or more companies, and financial statements provide specific information about income flows and assets/liabilities under management (Rothaermel, 2020). However, no single source of information provides definitive answers regarding the existence or lack thereof of any particular business advantageous situation vis-à-vis its rivals. Economic value creation is how an organization creates more value for its customers than it spends to produce those same products or services. There are many sources of competitive advantage, but two common ones are innovation and differentiation (Rothaermel, 2020). Innovation refers to creating new products, processes, or services that improve performance or create a differentiating competitive position in the marketplace.

3 Differentiation involves using various channels to set oneself apart from competitors while maintaining profitability levels within reason. Beyond these traditional methods of gaining an economic edge over rivals, organizations can often find unique advantages by focusing on their internal capabilities rather than external factors like industry trends or technological advancements (Rothaermel, 2020). There are many different sources of competitive advantage, but economic value creation is how businesses create value for their customers and shareholders. To generate economic value, companies must provide something people want more than they can get from alternative options. A company can use four main levers to create added value: innovation, efficiency, quality, and customer focus. Innovation refers to creating new products or services that consumers find irresistible and have never before seen (Rothaermel, 2020). A business model is a framework that helps businesses to understand and create their strategies. A strategy will guide the company's operations to achieve specific objectives (Rothaermel, 2020). A business model framework is a set of guidelines to define the objectives, goals, and strategies that support an organization's overall operations. It serves as a blueprint for decision-making and helps guide action in marketing, product design or development, and customer service delivery systems. A good business model needs to be flexible enough to adapt to changing market conditions while maintaining its core objective: turning strategy into results (Rothaermel, 2020). 1. Yes, paying attention to the opportunity costs associated with different MBA program options is important. Opportunity cost refers to what you have given up or foregone when making a particular decision. There are different MBA program options that each come with their opportunity costs. For example, one option may require more work hours than another, which could mean shorter career paths (Moradi et al., 2021). Another option may be less

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4 affordable or offer lower benefits in the long run. The opportunity costs of pursuing an MBA are different for each program. When considering different MBA program options, paying attention to the opportunity costs associated with each option is important. These may include tuition expenses, time away from job responsibilities and family commitments due to class attendance/exams, and any potential loss in wages if taking a leave of absence during studies. Opportunity cost refers to what one must give up to take advantage of a particular choice or action (Moradi et al., 2021). This can include time spent studying and completing coursework, financial resources needed for tuition payments and other fees, and personal commitments that may have been made prior but now need to be changed due to reduced availability or ability during an MBA program's duration. It is also an important factor in lost wages while enrolled full-time in such programs when considering any long-term career choices following the completion of said degree (Moradi et al., 2021).

5 References Moradi, E., Jafari, S. M., Doorbash, Z. M., & Mirzaei, A. (2021). Impact of organizational inertia on business model innovation, open innovation and corporate performance. Asia Pac. Manag. Rev. , 26 (4), 171–179. Rothaermel, F. (2020). ISE Strategic Management: Concepts (5th ed.). McGraw-Hill Education.

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