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ChiWen Jevons Lee Tulane and Tsinghua Lecture One Value Chain: Strategy Design 李志文 Three Keys to Success Vision: Goal, Innovation, Opportunities Strategy: How to make it happen (allocating physical resources) Team: Who make it happen (building anizational human capital) Fundamental Formula of Business Success Economic Value = (price – unit cost) x quantity ?Price and Quantity: Customer Satisfaction, Customer Loyalty ?Cost: Source of Competitive Advantage Economy of Scale Economy of Scope Division of Labor and Specialization Structure of Team ?Free Form: Double Tennis, Jazz Combo ?Centralized: Soccer/Orchestra ?Decentralized: Baseball Basic Components of Team: Functional Role, Decision Type, Leadership Style SWOT Analysis of Competitive Advantage ?Strength ?Weakness ?Opportunity ?Threat Finding SWOT: Benchmark Analysis Benchmarking U S E a s t A c c oun t i ng P r oc e dur eC os t pe r Y e a r