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Week 1 (D. Fundamental Principle of Business Strategy (The existence of…

- - - - Min. Cost & Max. Profit
    - - Discounted Cash Flow (DSF)=Positive NPV
      - Tobin’s Q= firms market value/asset replacement value
  - - - Increase equilibrium Q, Decrease equilibrium P, until Economic profit=0
    - - No mater input how many capital, can't make any profit
    - - Profits= Revenue- Variable Costs-Fixed Costs
        
        P=C*Q=MC
  - - - Barriers to entry
      - Industry Structure matters
    - - Firm structure matters
      - Barriers to imitation #differentiation
- - - - Strengths
      - Weaknesses
    - - Opportunities
      - Threats