Nobody downloaded yet

Three Ways That Create Value for a Firm - Essay Example

Comments (0) Cite this document
In the paper “Three Ways That Create Value for a Firm” the author discusses three ways that create value for a firm and positional and resource-based advantages. While the first approach is based on the strategic positioning of the product, the second is based resource-based theory…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.1% of users find it useful
Three Ways That Create Value for a Firm
Read TextPreview

Extract of sample "Three Ways That Create Value for a Firm"

Download file to see previous pages It is not merely identifying a product but as Durkin (1997) states innovative firms make investments in knowledge to develop new products which give them a monopoly in the international market. The second contention is on the resource-based theory (RBT) of the firm where rare and valuable resources give it a sustainable competitive advantage (Peteraf & Wernerfelt cited by Bowman & Ambrosini, 2000) while the third approach states that firms should be able to seize opportunities faster than other firms and gain value. The first approach pertains to product and industry innovation while the third concentrates on strategy innovation. The knowledge development in the first approach again would imply investments in resources – technical or human. Hence, all three approaches are not independent of each other although each has its own distinctive features.
The positional approach is also based on Porter’s theory of five competitive forces which determine the firm’s profitability and attractiveness (Porter, 1985). The journal does not specify whether the industry and value of such firms relate to competitiveness in their own nation or the nation where products have been marketed. Pharmaceutical industries operate globally and hence this aspect is not clear whereas Porter insists that competitiveness and productivity pertain to national productivity, which should enhance the value of the firm in the nation in which it operates (Davies & Ellis, 2000).
Resources can be defined as anything that gives advantage or disadvantage to the firm. (Mills et al, 2003). The support theory of Johnson et al (2005) divides the resources as threshold resources and unique resources, where threshold resource satisfies customer’s minimum requirements and unique resources contribute to competitive advantage and make it difficult for the competitor to copy the value. A successful business needs to secure the resources according to Scott et al (2005) which the journal specifies ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Three Ways That Create Value for a Firm Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from
(Three Ways That Create Value for a Firm Essay Example | Topics and Well Written Essays - 1000 Words)
“Three Ways That Create Value for a Firm Essay Example | Topics and Well Written Essays - 1000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Three Ways That Create Value for a Firm

Financial Policies and the Value of the Firm investors look for other promising alternatives. Growth and profitability are two of the necessary ingredients for increasing value. The suggestion has been made that a way of resolving these conflicts in firms which want to continue to maintain high levels of growth is to consider using more short term debt (Jensen and Meckling 2006; Myers ). However, this constitutes an aggressive financial strategy which has high risks but can also have high payoffs. The debt structure is sometimes seen as a signalling device and so short term debt indicates that the assets are of a high quality (Flannery 1986). Impact of taxation on financial policies and the value of the...
14 Pages(3500 words)Literature review

Capital structure and firm value

...of the shareholders’ issue securities when they are overvalued. This is the reason the market discounts the value of the firm in way that it is reflective of any “adverse selection costs”. Myers & Majluf (1984) report that such costs are higher in the case of equity issue as compared to debt issue never making the issue of equity optimal (Autore & Kovacs, 2004). The pecking order theory states that the high growth firms with huge financing needs have high debt financing ratios as their managers are reluctant to new equity issues. Smith & Watts (1992) and Barclay et al (2001) suggest the opposite i.e. they state that the firms exhibiting high growth use...
23 Pages(5750 words)Literature review

Do financial management decisions influence firm value management decisions taken over the past three years. Critically appraise your findings detailing any theory used and assumptions made. The unit of analysis is a specific project that the company has been considering in that the value of all expected cash flows is discounted to reflect the company’s cost of investing in the various projects with different financial and dividend decisions. Essentially, the financial officers recommend accepting only projects expected to produce increased cash flows for the company by appraising less tangible areas of investment like the strategic planning process. The gap between the financial appraisal and strategic led the top management of BP to recognize the...
4 Pages(1000 words)Essay

Does mergers and acquitions create value

...below. 1. To determine what factors most influence firms to make Mergers and Acquisitions effective. 2. To determine whether those factors are consistent over time cost effectively. 3. To identify what actions considered most appropriate to increase productivity and acceptability of Mergers and Acquisitions. 4. To ascertain whether Mergers and Acquisitions create value to explore a speedy drive for firms. 1-5. Scope and Limitations of the Study The study's primary objective is to explore the implications of implementing Mergers and Acquisitions within the firms and develop a business case for service development. As part of author's role as a...
40 Pages(10000 words)Coursework

Three Value Disciplines: Characteristics of organizations

...segments with products created specifically for those segments. Differentiation of product, brand or service is the strategy aimed at creation of unique features valued by customers and perceived as better or absolutely different from the products and services of the competitors. This value added by the uniqueness allows the company to set premium prices. To succeed in differentiation strategy a firm must have such strengths as strong R&D department, highly skilled and creative work teams in all the sectors, perfectly-trained sales personnel, and strong corporate reputation. Firms pursuing customer intimacy would tailor and shape their products and...
12 Pages(3000 words)Essay

Capital Structure and Firm Value

.... If the firms have to shell out less payment to the government then it is left with more cash resources for paying to the investors. In short the interest tax deductibility shields the pre-tax profits of the firm. Source: (Brigham & Ehrhardt, 2010, p.613). From the above equation it is evident that the value of the levered firm is equal to the value of unlevered firm plus any tax advantage of debt. In the above equation Tc is the rate of corporate tax, Ts is the rate of personal tax on the income earned from stocks and Td is rate of tax on income derived from debt. The argument put forward by Miller is that the rate of tax on stock...
13 Pages(3250 words)Assignment

Three Ways to Persaud

... and also in creating a clear relationship among the parts. The use of plain color within the course has helped in creating an academic impression. Finally, the lack of images within the course is reasonable, considering that images are only useful in condensing information, whereas the content within the course is of fair length. Reference Edlund J. R. and Pomona C. L. (2012). Ethos, Logos, Pathos: Three Ways to Persuade. Retrieved on June 5, 2012 from: to an Audience In an attempt to influence an audience, writers employ a number of strategies in order to elicit a desired reaction from their audience. Among these, as pointed out by Plato, is by appealing to the audien...
1 Pages(250 words)Essay

Ten Ways to Create Shareholder Value

Throughout his work, Rappaport emphasizes the need to capitalize on long-term growth strategies at the expense of realizing short-term benchmarks. The writer asserts that those corporations involved in responding to short-term strategies will eventually fail because of dynamics within modern commercial environments. Managers running such companies are obscured about the future prospects of an organization. Inasmuch as they concentrate on maximizing the momentary strengths of a company, they fail to take a glance at emerging opportunities and imminent threats. Since consumer preferences are bound to change and competition intensifies, then short-sighted company executives will have limited choices when trouble arrives. In order to...
1 Pages(250 words)Essay


...., 2010-Present Manager Managed daily operations of a $0.8 million ceiling Insulation Company. Created an effective marketing campaign along with restructuring the products discounts and pricing resulting in a 75% bid acceptance rate. Executed new bidding process through the spreadsheets to have more accurate bids. Permitted for the individual job costs tracking and give feedbacks as to crews efficiency with regards to labor hours and material waste. Supervised and trained work crew in more cost-effective product installation techniques that have minimized labor hours by 40% and material waste by 25%. United States Rescue Officer, 2005-2010 Manager, (2008-2010) Data Network Manager- Managed control and command data...
2 Pages(500 words)Assignment

Three Ways People Can Improve Their Communities

...of criminal activities create a great concern for the people in the community. The people in the community can aid in addressing the security concerns in various ways. Firstly, people can learn to identify criminal activities in the community. Secondly, the people can set up a watch scheme for the local community. This involves collaborating with the security agencies to make communities safer by the provision of information on any suspected crime (Cohn, 2013). Finally, people could enhance their security through active participation with the local security authority. The provision of support to the security authority could improve the community’s security status. Furthermore, people can aid in the...
2 Pages(500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Three Ways That Create Value for a Firm for FREE!

Contact Us