G202 Exam 2
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1. Market power Exists when firms are able to restrict competition to sustain prices above marginal
cost (monopoly has 100%, and rival firms can share it)
2. Market strate- Guarding trade secretes, control of an essential resource, exclusive contracts and
gies customer lock-in, collusion
3. Non-market Government licensing, patent or copyright protection, trade regulations, govern-
strategies ment or NGO certification
4. Optimal sales tar- The profit maximizing sales target occurs where marginal revenue equals margin-
get al cost (If MR>MC = firm sells more unit, MC>MR = firm loses money on selling
unit)
5. Optimal price Given the optimal sales target, price is found as a markup over cost, where the
markup factor depends on the demand for the product (more inelastic = higher
markup)
6. Imperfect price Groups of consumers are charged different prices, based on their different
discrimination willingness to pay (elasticity)
7. Perfect price dis- Each consumer is charged a price equal to her willingness to pay (no consumer
crimination surplus)
8. Strategic Sustain- Operation is going to be driven towards providing consumers and community
ability with a positive impact (Paul Polman and Unilever)
9. Unilever values Over half the values are sustainability focused
10. Unilever stake- hierarchy: Consumers - Society - Employees - Shareholders
holder
11. USLP Hierarchy and Unilever's values were envisioned to improve business perfor-
mance by signaling to key stakeholders that societal issues are integrated in
Unilever's core business strategy
, G202 Exam 2
Study online at https://quizlet.com/_ixq0ck
12. USLP effects Growing consumer trend towards health and environment, employee motivation
and empowerment leads to innovation, government and NGO focus on mitigating
global social threats, capital allocations increase due to increased trust from SRIs
13. Unilever goals Differentiate products by valuing sustainability to create more loyal customers and
thus, giving more inelastic demand so Unilever can raise prices
14. Elasticity More inelastic (0) = supports a higher price, More elastic (infinity) = needs a lower
price
15. Customer loyalty (Unilever) Increased operating margins from 13.6% to 14.5%, outpaced market
growth
16. Employee loyalty (Unilever) 3rd in world's most in demand employers, employee satisfaction grew
from 63% to 75%
17. Investor loyalty (Unilever) 18% increase in shareholder value, listed on Dow Jones Sustainability
Index and GlobeScan Sustainable Leaders
18. Profit maximiza- Differentiation and customer loyalty, Pf and Qf (MR = MC)
tion
19. Social efficiency Competition and homogeneous goods Pe and Qe (D/P = MC)
20. Inefficiency When firms with market power under produce relative to the socially efficient
output, society loses out on a net benefit
21. Sustainability tar- (Unilever) In 2013, 50 defined sustainability targets (5 off plan), 2014 67 target
gets (7)
22. Improved inter- (Unilever), Internal GHG emissions decreased 40%, water impact decreased 31%
nal resource effi-
ciency
Study online at https://quizlet.com/_ixq0ck
1. Market power Exists when firms are able to restrict competition to sustain prices above marginal
cost (monopoly has 100%, and rival firms can share it)
2. Market strate- Guarding trade secretes, control of an essential resource, exclusive contracts and
gies customer lock-in, collusion
3. Non-market Government licensing, patent or copyright protection, trade regulations, govern-
strategies ment or NGO certification
4. Optimal sales tar- The profit maximizing sales target occurs where marginal revenue equals margin-
get al cost (If MR>MC = firm sells more unit, MC>MR = firm loses money on selling
unit)
5. Optimal price Given the optimal sales target, price is found as a markup over cost, where the
markup factor depends on the demand for the product (more inelastic = higher
markup)
6. Imperfect price Groups of consumers are charged different prices, based on their different
discrimination willingness to pay (elasticity)
7. Perfect price dis- Each consumer is charged a price equal to her willingness to pay (no consumer
crimination surplus)
8. Strategic Sustain- Operation is going to be driven towards providing consumers and community
ability with a positive impact (Paul Polman and Unilever)
9. Unilever values Over half the values are sustainability focused
10. Unilever stake- hierarchy: Consumers - Society - Employees - Shareholders
holder
11. USLP Hierarchy and Unilever's values were envisioned to improve business perfor-
mance by signaling to key stakeholders that societal issues are integrated in
Unilever's core business strategy
, G202 Exam 2
Study online at https://quizlet.com/_ixq0ck
12. USLP effects Growing consumer trend towards health and environment, employee motivation
and empowerment leads to innovation, government and NGO focus on mitigating
global social threats, capital allocations increase due to increased trust from SRIs
13. Unilever goals Differentiate products by valuing sustainability to create more loyal customers and
thus, giving more inelastic demand so Unilever can raise prices
14. Elasticity More inelastic (0) = supports a higher price, More elastic (infinity) = needs a lower
price
15. Customer loyalty (Unilever) Increased operating margins from 13.6% to 14.5%, outpaced market
growth
16. Employee loyalty (Unilever) 3rd in world's most in demand employers, employee satisfaction grew
from 63% to 75%
17. Investor loyalty (Unilever) 18% increase in shareholder value, listed on Dow Jones Sustainability
Index and GlobeScan Sustainable Leaders
18. Profit maximiza- Differentiation and customer loyalty, Pf and Qf (MR = MC)
tion
19. Social efficiency Competition and homogeneous goods Pe and Qe (D/P = MC)
20. Inefficiency When firms with market power under produce relative to the socially efficient
output, society loses out on a net benefit
21. Sustainability tar- (Unilever) In 2013, 50 defined sustainability targets (5 off plan), 2014 67 target
gets (7)
22. Improved inter- (Unilever), Internal GHG emissions decreased 40%, water impact decreased 31%
nal resource effi-
ciency
