What Is a Competitive Advantage? What Makes a Competitive Advantage

question 102

Essay

What is a competitive advantage? What makes a competitive advantage sustainable?

Recognize the issues associated with using external market prices as a basis for transfer prices.

Interpret the effects of transfer price changes on division profitability.

Analyze decisions involving transfer pricing and their implications for company-wide coordination and profit.

Understand the characteristics and advantages of functional organization in firms.

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Definitions:

Fiduciary Relationship

A legal or ethical relationship of trust between two or more parties, typically involving the management of money or assets by one party for another.

Agency Relationship

A legal arrangement where one party, the agent, is authorized to act on behalf of another party, the principal, in business transactions or other matters.

Power

The ability or capacity of an individual or group to influence or control the behavior of others or the course of events.

Business Operations

Business operations encompass the day-to-day activities a company engages in to run and achieve its objectives, including production, marketing, and management.