Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 2 Week 2. Session 1 DYNAMISM AND COMPETITION IN GLOBAL MARKETS.

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 Dynamism… Business in a changing world What is /are business? Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 Definition of Business a commercial or industrial enterprise and the people who constitute it commercial enterprise: the activity of providing goods and services involving financial and commercial and industrial aspects Occupation: the principal activity in your life that you do to earn money Source: According to Princeton’s WordNet: Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 Business is a legally recognized organizational entity existing within an economically free country designed to sell goods and/or services to consumers or other businesses, usually in an effort to generate profit. Source: According to Wikipedia:

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 DYNAMICS. Dynamics, dynamism are common words in todays language. Business are dynamic, the world is dynamic, the society, a specified system, but what does dynamic really means? Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 Traditional Business Model. Dynamic (or actual) Business Model. Input Process Output Input Process Output Feedback Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 In other words DYNAMIC means… …THE WORLD CHANGES EVERY MINUTE EVERY MINUTE!!!!! Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 The Global Markets Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 What is a market ? Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 Defining “global” The Nokia Cell phone Example Salo Presence in 150 different countries Distribution and sales. Main components made in: Certifications by: Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 A market is a social structure for exchange of rights, which enables people, firms and products to be evaluated and priced. *Source: According to Wikipedia*: Markets are formed from two MAIN elements (but not the only ones): DEMAND SUPPLY Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 What is a competition? In economic terms… key concepts… The 3 “E”s Efficiency, effectiveness and effectivity. Production of goods/services  sold in markets Customer satisfaction Continuous improvement Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 The 3 “E”s … difference Efficiency …in resource managing. *Avoiding dead time, non used resources Effectiveness … in the achievement of goals *The minimal cost/least number of unplanned consequences to achieve a goal. Effectivity. … to generate an impact in the environment * Having the desired effect… Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1 Example for the 3 E’s. Efficiency (Eficiencia) Effectiveness (Eficacia) Effectivity (Efectividad) Kill a fly with…. X X Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 2 Week 2. Session 2 and 3 SWOT analysis Porter’s Model

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1Week 2 The Porter Model is a very quick way to make an analysis of a market (across firms and industries), in order to find out the general dynamics among them.

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1Week 2 The Five Forces Porter Model Supplier Power Buyer Power Barriers to Entry Threat of Substitutes Rivalry

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1Week 2 Supplier power: The term 'supplier' comprises all sources for inputs that are needed in order to provide goods or services. Therefore, the supplier power means the capability of bargaining that the suppliers have over a given industry or market. Buyer power: Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes on a certain market.

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1Week 2 Barriers to entry: These are barriers that allow (or prevent) new industries to enter the market. Some examples could be economic scale, high investments, brand loyalty, access to raw materials, etc... Threat of substitutes: A threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players.

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1Week 2 Rivalry: This force describes the intensity of competition between existing players (companies) in an industry. High competitive pressure results in pressure on prices, margins, and hence, on profitability for every single company in the industry.

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1Week 2 SWOT analysis

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1Week 2 Imagine that you want to establish a new business in the soft drinks market in the state (BCS). Make an analysis of the soft drinks market (it comprises carbonated drinks, hydrating drinks and juices). Get elements for each of the forces in the Porter Model. Then make a conclusion on the market environment and dynamism. How hard or easy would it be to enter the market? Is it viable? Modality: Teamwork. Due to Tuesday, Jan 22nd Activity 4.

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 2 Week 2. Session 2 Supply / Demand behavior

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 2

Planes Financieros Introduction to Management and Finance (Ph6012) M. en I. Alejandro Flores M. Instituto Mar de Cortés Week 1Week 2 The world of business changes mostly due to the offer and demand interaction. By understanding the forces of offer and demand, a different panorama rises (in a business point of view).