Describe the economics of the market in terms of what each ring in Figure 13.2 represents.

Figure 13.2:

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The Economics of the Market Proft Non-Value-Added Activities and Cast (Waste) Market forces constrain the revenues a firm can earn. Business Costs tend to creep upward, creating á profit squeeze. Value-Added Activities and Costs Value-Added Core of Activities and Costs FIGURE 13.2 WHAT CUSTOMERS ARE WILLING TO PAY FOR A PRODUCT OR SERVICE IS BASED ON ITS PERCEIVED VALUE, NOT THE AMOUNT OF MONEY A COMPANY EXPENDS ON OTHER ACTIVITIES LIKE GENERAL OVERHEAD, WASTE, AND SO ON.