Archive for the ‘business strategy’ Category
Tuesday, March 16th, 2010
We discussed methods for estimating the information content of trades and the effect of inventory control on prices. The models that we discussed generally assume that only one of the effects (information or inventory control) is present. However, the empirical predictions of the asymmetric information and inventory control market microstructure models are very similar. Both theories predict that prices will move in the direction of the trade: a buyer-initiated order increases bid and ask prices, whereas a seller-initiated trade decreases bid and ask prices. This makes it difficult to distinguish the two theories empirically, unless good data on inventories are available. However, this is rarely the case.
Fortunately, in the absence of inventory data there is another way to separate information effects from inventory effects. Theoretically, information effects arise because trades reflect new information. This information will be incorporated in the price. If the market is efficient, the impact will be immediate and permanent. In contrast, inventory effects arise due to liquidity providers’ inventory imbalances. If the liquidity providers actively manage their inventory, these imbalances will be temporary. As a direct consequence, the price effect of trades will also be temporary and will reverse in the future. This gives a handle to distinguish information from inventory control effects:
information has permanent price effects whereas inventory effects are transitory.
Tags: business objectives, cash reserves, debt consolidation, investment opportunities, loans guide, money guide, refinancing
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Thursday, October 22nd, 2009
After the 1990/91 recession the US corporate sector underwent a period of massive restructuring. Balance sheet repair, rights issues to repay debt, asset disposals and measures to improve cash flow generation led not only to falling leverage, but also to low earnings growth rates. During this first phase of the debt–equity cycle, the ‘repair phase’ credit usually outperforms equities. It lays the foundation for higher growth rates due to an improved ability to generate cash flows. The subsequent recovery period is beneficial for equity markets as well as credit markets, as the years 1994–97 have shown.
Tags: Aids finance, currency cycles, Debt, economics, estate, Estate Planning, heir, income, inheritace, insurance
Posted in business goals, business patterns, business publications, business strategy, campaigns, cash demand, companies | Comments Off
Sunday, August 2nd, 2009
After you’ve defined your business strategy, you should test the elements of that strategy. There are many ways to do so, but there’s one simple test that can be tried without fear or risk:
Say the company’s goals aloud.
Strategies are important, but never mistake strategizing for acting. The best strategy in the world is no strategy if action isn’t built into the plan. There are companies that spend a lot of time meeting and working out strategies, but not moving on to map out a plan of action. You’re not likely to have heard of them, of course. Wonder why?
This can be done as part of a meeting of the board of directors, in the executive suite, or even in the privacy of the department manager’s office. Identify the internal elements of the strategy and say them aloud. Some business people refer to this approach as “Run it up the flagpole and see who salutes.” But at this point you don’t want acceptance and allegiance—you want critical thinking and tough questions. It’s time to test, not to salute.
Tags: competition, entrepreneurs, executives, manufacturers
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Saturday, August 1st, 2009
Identify the key steps toward the goal. Knowing the steps the company needs to take to reach its goal is as important as identifying the goal itself. Sometimes entrepreneurs trust too much in their enthusiasm and spirit. That may be enough to motivate their employees, but leaders must plan their campaigns.
So, to sum it all up, you should know what you’re doing (your business) and how you’re doing it (your philosophy). You should recognize who else is out there in your way (your competitors) and decide what sets you ahead of them (your major advantages). Then, you determine where you want to go with your business (your goals) and how you intend to get there (your key steps). All of that forms your business strategy.
Tags: business philosophy, competition, entrepreneurs, manufacturers
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Saturday, August 1st, 2009
Here are some steps that should help you develop your business strategy:
Know your business. This seems basic, but it’s the most often forgotten step along the road to business success. Were railroads in the business of being railroads or part of the transportation industry? There’s a distinct difference between the two and a distinct difference in the psychology and strategy that awareness will bring to the business. It’s important, as we noted earlier, when you’re defining your philosophy, identifying your competition, and finding your niche. But it’s just as important when you’re determining how you’re going to achieve your goals.
Identify the philosophy behind your company’s way of doing business. If it’s a service business, articulate how important that service is to the overall goal. If the company makes products, define the purpose and goal each product line has for the company.
Is there a level of quality or production time important to success? If so, that must be part of the strategy.
Tags: business philosophy, business plan, interests, strategy
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Saturday, August 1st, 2009
Developing a strategy and, subsequently, building a business plan based on that strategy are critical to developing the sound financial strategies.
Companies that take the time at the start to define a strategy and then build their business plan around it improve their chances for greater financial success. And department managers have an obligation to help build that success by understanding the strategy and their part in making it work—through the strategy each defines for his or her department.
Although you may not actually be involved (yet!) in forming your company’s strategy, the following discussion will put you there among the movers and shakers who determine that strategy. Then you’ll better understand the principles behind a business strategy.
Tags: business plan, cutting costs, interests, strategy
Posted in business patterns, business strategy, cash demand, financial principles | Comments Off
Friday, July 31st, 2009
Most enterprises have something called a strategy. Invading armies have one. Football teams have one. In most cases, just having a strategy may mean the difference between success and failure.
More than any other enterprise, a business needs a strategy. Why? Well, just consider what you’re trying to do and what you’re up against. You’re trying to get a share of the dollars out there. You’re competing with businesses that provide similar goods or services, yes, but also with any business at all, because the amount of dollars is limited. You’re risking economic changes as well—not only downturns that could threaten your financial stability and growth, but also upturns that could favor competitors ready and able to capitalize on them, especially if you’re not prepared. Then there are the other dangers, such as the potential loss of vital financial support, a key manager, or a valuable employee. Then, toss in the reaction of customers, which might mean a lawsuit that could sap your resources and damage your public image.
So, every company is facing tough challenges. That’s why every company needs a strategy. That’s often the key to a company’s financial success. Without an overall strategy, you’re less likely to meet your financial goals.
Even if you’re not responsible for running your company, you must first grasp the overall concept behind what the top managers are doing, just to be able to properly manage any part of that company. If you don’t understand the strategy behind the company, how much can you help it succeed?
Tags: business plan, cutting costs, interests, preserving cash
Posted in business patterns, business strategy, companies, funds, negotiationg | Comments Off