Instructions for the classmate classmate response (around 125 words each)
Please, respond to the below two classmate main posts. (Please, the responses need to be a discussion, not an evaluation. You can agree with them and add information regarding the topic in discussion. No citation required)
Thank you
Classmate discussion posts
Discussion 1:
Dawn Kopcho
A firm’s main objective is to have sustained profits but in order to achieve this they must be able to create and capture value (Brickley, 2019).
One of the first steps toward earning a profit is discovering ways to create value. But what exactly is value. Value is achieved through a firm’s inputs, outputs and pricing policies. A firm has to learn how to lower their production costs and processes and lower their costs between transactions with customers and suppliers. Basically, firms need to discover better ways to use existing resources which include their tangible assets (i.e. plant and equipment), intangible assets (i.e. trademarks and
and name), and their employees – the most important (Brickley, 2019).
Once a firm is able to create value, they then must learn to capture it.  Failure to innovate and keep up with the competition can lead to ruin. Firms need to utilize their employee’s knowledge to create new ideas and not be afraid to change with the times. It’s often the employees who create and capture value. For example, with McDonald’s, it was two separate franchisee’s who created and captured a value for their local restaurant that led to the company adopting those values for the entire company that became a success. A franchisee located in a catholic neighborhood created a fish sandwich because Catholic’s did not eat beef on Friday’s. The idea took hold and the company expanded on that idea to create the Filet-O-Fish. Another example is a franchisee in Pittsburg wanted to create a heftier sandwich for the steelworkers in that town – thus the creation of the Big Mac. McDonalds is a great example of an organization that has been able to create and capture value (Brickley, 2019).
A business environment is constantly changing with new technology, innovations, changes in customer’s tastes, along with other developments. A firm must learn to adapt to the changing business environment if they want to stay on top or in business. They have to continue to capture value for their customers by developing better production techniques and pricing policies then their competitors (Brickley).
Resources
Brickley, Smith, Zimmerman XXXXXXXXXXManagerial Economics and Organizational Architecture, 6th Edition. New York: McGraw-Hill Education.
Discussion 2:
Brittany Russell
Every transaction involves costs, from both consumer and supplier. Consumer transaction costs are searching, learning, and negotiating about products and then enforcing the agreement. Consumer transaction costs are represented by a downward sloping line. Producers experience similar costs when interacting with suppliers and consumers, and these costs are represented as an upward sloping curve. The area to the left (towards the Y- axis) between the two curves represents the total value created; the combination of consumer and producer surplus. Managers strive to capture this value, and theoretically it is within arm’s reach; however there are other firms practicing a similar strategy. Other managers will seek to obtain those same gains, pushing the market back to equili
ium. There are four ways for managers to increase value: lower production costs or producer transaction costs, reduce consumer transaction costs, increase demand through quality, compliments or substitutes and finally, create new products (Brickley, Smith, & Zimmerman, 2019).
I believe Sta
ucks has done an excellent job creating value. The company knows they are not going to appeal to price sensitive coffee drinkers. Sta
ucks recognizes that consumers like novelty and they use this knowledge to capture their target market. For example, the Pumpkin Spice Latte, equal parts beloved and reviled, has nonetheless come to represent the a
ival of fall,  (Peters, 2018). While Sta
ucks did not invent the drink, they certainly pushed it from meager beginnings in 2003 to the cult love it is today. This was not the first seasonal drink Sta
ucks offered nor would it be the last creation for which people flocked to stores. The Unicorn Frappe sold out in my locality within a day of its official release. They even have a few Halloween themed drinks. Sta
ucks generates value by developing unique beverages based upon cu
ent cultural trends and then keeping these on the market for a limited time.
References
Brickley, J., Smith, C., & Zimmerman, J XXXXXXXXXXManagerial Economics & Organizational Architecture (6th Edition). New York City: McGraw-Hill Education.
Peters, L. (2018, August 31). The History Of The Pumpkin Spice Latte & How It Came To Embody All Things Fall. Retrieved from Bustle: https:
www.bustle.com/p/the-history-of-the-pumpkin-spice-latte-how-it-came-to-embody-all-things-fall XXXXXXXXXX