Tag Archive: economics


Decisive Entrepreneur

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An overview on one aspect that captures almost all the economic activities include a representation to a change. This clue distinctions of when and where supports all those interested wantings for the future development and innovation, in the activity of the products and the services desired for the necesary market.

You never know where you are going to find a good idea.

That may sound like a saying from a fortune cookie. But for Normal CEO, and founder, Nikki Kaufman, it’s a management style.

It’s also why the headquarters of her 3-D printed custom earphone company are open and transparent across departments. It’s a guiding principle on how to run a team.

I encourage new ideas all the time here at Normal. That’s one of the things that I really like about having everyone in one office.
She included this advices from the floor of her New York City retail location, which also serves as the company’s factory and corporate office along with an incredible pursuatiation for advocating content into the shared markets .
An idea can come from anywhere.”



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Old Business Models

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Every industry is changing

There are no original ideas left. Sure, it’s kind of a cynical thought, but try and brainstorm a completely new concept, whether for a business, an advertising campaign or even a limerick, and you’ll start to think it’s true. It can sometimes be a stretch to come up with anything that hasn’t already been thought of.
It’s the reason someone once famously said there are only three original jokes and all the others have been derived from them. It’s why Hollywood remakes old movies. And the dearth of original ideas is why businesspeople sometimes pay other businesspeople to come up with a new concept for their own products or services.
Fortunately, if you’re an entrepreneur trying to come up with a new business model, you don’t have to be completely unique. For instance, you probably wouldn’t attempt to sell fingernail clippings in a bag, no matter how groundbreaking and unique the idea is. In fact, if you’re starting a business, you probably shouldn’t do something that’s never been done -after all, think of the learning curve your target market will have to tackle. But you would be well advised to take an old idea and make it new. That’s exactly what David Friedberg did. It was around 2001, Friedberg figures, when he was 20 years old and living across the road from a bicycle rental shop.
Every day that it rained, the bike shop was closed. “It became pretty noticeable,” recalls Friedberg, now 26 and already an ex-Google executive and the CEO of his own company, WeatherBill, in San Francisco. After watching the bicycle rental store owner get rained out day after day, Friedberg started noticing how many other companies- think golf courses and car washes- were taking a financial bath whenever it was wet outside.
“You don’t really think about it, but 70 percent of businesses are affected by the weather every year, across regions and industries,”
says Friedman.
“The weather affects so many different types of businesses, whether in negative or in positive ways, like taxi cabs in New York, which are often full in the cold.”
Friedman was a business product manager at Google when he had his “a-ha moment.” It occurred to him that he should start an insurance company- a very old idea- but gear it specifically toward companies that want to protect themselves from losing money on a rainy day -a new idea. It may not sound new. After all, insurance companies generally protect you if you’re hammered by a hurricane, slaughtered by a sandstorm or frozen under the tundra. But we’re talking about the car wash that doesn’t want to lose an entire day of income when there are five inches of rain.
That’s why Friedberg developed, with his “computer science friends,” an elaborate website where anyone can log on and buy a contract to protect themselves from unseasonable weather. The site is completely customizable and automated. A farmer, for instance, could receive money every time the temperature dips below 67 degrees in a particular month. Or if a ski resort has a week and a half of beautiful, balmy weather in January, the owner could automatically receive a check without having to report the weather.
“There is no claims process,”
Friedberg says proudly. Instead his company uses a third-party weather station, EarthStat, that independently confirms data and sends daily reports to WeatherBill, which then processes the checks and sends them out.

Modernizing the Wheel
Some business models only need to be slightly tweaked to appeal to the modern consumer. Want to update the traditional dentist office? Put it on wheels. While cleaning teeth is an industry almost as old as, well, teeth, putting an office in a van that can travel anywhere from giant corporate campuses to nursing homes is a much more recent concept. The rise of mobile dentist offices in the last few years shows that catering to people’s busy and complicated lives is a nearly surefire way to improve upon an old concept.
Then there’s the Pearson Ford Fuel Depot in San Diego, which has received a lot of attention for its one-of-a-kind gas station that offers a full range of clean-burning alternative fuels from ethanol to BioWillie, a type of biodiesel made from soybeans and promoted by singer Willie Nelson. Gas stations may be becoming synonymous with global warming, but by offering an alternative, this fueling station has managed to drum up publicity while serving an emerging niche market.
Capitalizing on consumers’ nostalgia is yet another potential approach. In true throwback fashion, State Street Barbers, located in Chicago and Boston, gives modern hair cuts to men in an environment decked out to look like a ritzy salon in the 1920s. Patrons are given a cold beverage when they walk in and can get a hot lather shave with a classic straight razor and hot towels.
In the end, it’s easier to be original and unique in an established industry like home selling or insurance when you have plenty of capital funding behind you; it’s another story if you’re running a fledgling startup in your parents’ basement, and you feel you have to take any client with a pulse and a wallet. But whether you’re a big fish in the ocean or a small one in the pond, the principles are always the same. If you’re going to tweak a formula,
“throw out the way things have been done before,”
advises Friedberg.
Manufacturers wants more to connect with their suppliers, their distributors, and ultimate their customers. In a consumer world there is an app for that, in the government world there is form for that and that is the technology that needs to be closed. Banks knows a lot about the customers and that information is spread to the full wings. The reason why most of the companies are not embracing the future faster, is because they continue to throw their capital to what they worked in the past and that’s what is keeping manufacturers up at night, is how to innovate quickly with agility, and deepen their relationships with their retailers, suppliers and consumers.
Figure out your end goal, and then forget about what all of the other people have done, and come up with a new way.



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The Latest News & Developments in Business Strategy Practise

Financial Goals

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In the new case of the industries you  should be proactive in helping achieving and creating your goals.

When you’re a start-up with few employees and few customers, it’s easy to stay on top of what customers want and what they’re getting. But as you add more customers and employees, you add links to the customer service chain. That creates the potential for growth and the potential for poor service along the way. That’s why creating a customer service policy and adhering to it is so important. Here are some steps you can take to ensure that your clients receive excellent service every step of the way.

  1. Put your customer service policy in writing. These principles should come from you, but every employee should know what the rules are and be ready to live up to them. This doesn’t have to be elaborate. Something as simple as “the customer is always right” can lay the necessary groundwork, although you may want to get more detailed by saying, for instance, “any employee is empowered to grant a 10 percent discount to any dissatisfied customer at any time.”
  2. Establish support systems that give employees clear instructions for gaining and maintaining service superiority. These systems will help you outservice any competitor by giving more to customers and anticipating problems before they arise.
  3. Develop a measurement of superb customer service. Don’t forget to reward employees who practice it consistently.
  4. Be certain that your passion for customer service runs rampant throughout your company. Employees should see how good service relates to your profits and to their futures with the company.
  5. Be genuinely committed to providing more customer service excellence than anyone else in your industry. This commitment must be so powerful that every one of your customers can sense it.
  6. Share information with people on the front lines.Meet with your employees regularly to talk about improving service. Solicit ideas from employees-they are the ones who are dealing with customers most often.
  7. Act on the knowledge that what customers value most are attention, dependability, promptness and competence. They love being treated as individuals and being referred to by name.

 

It has been about trust and it has been about getting there faster than anybody else,as we are driving innovation and bring ideas from other industries through our success.

 

Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.” 

 Howard Stevenson 

 

This is one of the first definitions of entrepreneurism.It perfectly captures the nature of entrepreneurship and highlights some key qualities that successful entrepreneursshare. Entrepreneurs are confident in their abilities and they are able to recognize opportunities where many others don’t see them.




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A chance to catch up on much-needed reading to refresh and recharge your standards and leadership style scoured this lists of books that helped to look at life and work in a whole new way. While these books are not your typical newest releases, they have timeless value and are best read together to rejuvenate yourself and, by extension, your team.

The review by Rebecca Talbot, Content Marketing & Research Manager & Leadership Story Lab sais:

Feeling comfortable in our workplace can have its downsides. It’s easy to fall into patterns and make assumptions about the people we spend our days with.”

The Coaching Habit by Michael Bungay Stanier offers a way to get beyond our assumptions about our coworkers’ behavior and learn their stories instead. Stanier’s short book explores seven questions managers can use to get people talking, and to train themselves to avoid thinking they “already know” what’s motivating people. His first question is simply:

What’s on your mind?

When we are willing to start our conversations with an open-ended question, the answers might surprise us!And that’s Stanier’s whole point-that we need to approach each other with far more curiosity.

The “what’s on your mind” question resonated with me because it is a question my dad used to ask me often when I was a teenager. The respect and curiosity implied in the question worked well to encourage a teenager to talk.

Likewise, family, friends and colleagues generally need an invitation before they will share what’s been important to them lately. Now that Stanier has reminded of that, I’ll be using this question more frequently.

 


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Latest Financial Topics for Strategy & Business Developments

A healthy economy

 How should a sustainable, universally economy look like?



 

“A healthy economy should be designed to thrive, not grow” sais Oxford economist, Kate Raworth.

 

 

 

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“An old academic theory links interest rates to inflation and growth, and that connection seemed durable for some time.

In past business cycles, periods of high inflation and rapid expansion led investors to demand a high rate of return. When the economy grew slowly and prices held stable, interest rates fell as competition for capital declined.

Since 2000, however, the real yield on the 10-year Treasury—which is often seen as a proxy for the true long-term interest rate—has persistently fallen short of the real rate of economic growth. The theory tells us the 10-year yield should rest between 4 and 5 percent today, far above its current 3 percent. The link between growth and interest rates still exists, but there are external forces combining to keep yields soft throughout the expansion.

 

It’s Not an Inflation Surprise

Over the past decade, investors’ expectations for inflation have aligned closely with the actual behavior of prices, so today’s relatively low real yields cannot be attributed to an unforeseen bout of inflation catching the market off guard. Bond investors currently anticipate inflation to hold near the Federal Reserve’s 2 percent target over the long run, leaving a very low real return.

The 10-year Treasury Inflation Protected Securities yield is currently less than 1 percent, yet real GDP growth sits near 2 percent with the potential to accelerate to 3 percent in the fall. It seems curious, then, that bond investors are settling for so little.

 

Widening Spreads

Treasury yields may be historically low, but they exceed the yield on German bunds by more than 2 percentage points—a historically wide margin. For global investors seeking safe returns, US government debt is much more attractive than the bonds issued in Europe or Japan, where quantitative easing programs are intentionally suppressing yields. The Fed may have tapered its own asset-purchasing program, but the US bond market is likely being skewed by the actions of central banks abroad.

This distortion should eventually fade. The European Central Bank plans to gradually wind down its quantitative easing program this year, which will allow yields to rise to their natural equilibrium. But tapering will unfold over a long period, and the US advantage in yields will likely persist for some time.

 

Trade Imbalances

Developing economies naturally run trade surpluses; to keep their exchange rates stable, foreign governments often park their surplus dollars in US Treasurys. This keeps East Asia’s export-focused manufacturing sectors competitive on the global market, but the influx of foreign capital also tends to drive Treasury yields lower.

Trade imbalances are the natural consequence of rapid growth in industrializing nations, a trend that shows no sign of slowing. Dollarization should begin to ebb as a new consumer class emerges throughout the developing world, but this shift in capital flows is likely to evolve over decades.

 

Capital Requirements

The Fed is shrinking its balance sheet, but new banking regulations have increased liquid capital holding requirements for large financial institutions. This means that as the Fed sells off the excess holdings acquired through quantitative easing, demand from private banks likely will increase.

This is one reason for the relative stability of yields as balance sheet normalization begins. The Fed is currently allowing $30 billion in Treasurys and other long-term securities to mature every month, with the pace of the runoff set to accelerate to $50 billion monthly later this year. Much of the new debt entering the market is being bought up by financial firms, which are required to maintain a large buffer of stable, liquid assets as a backstop against volatility. Since Treasurys are ideal for meeting this requirement, banks will likely continue to buy them even when yields are below their natural equilibrium.

Long-term bond yields—and by extension, interest rates—may be resting well below their natural equilibrium. If inflation holds near the Fed’s 2 percent target and real growth averages between 2 and 3 percent annually, nominal yields should tend to rise toward 4 percent.

The link between interest rates, growth and inflation has not broken, but the forces skewing the bond market are persistent. Yields are likely to evolve over the course of years or even decades as they seek their natural equilibrium.

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If it can be sustained, the robust economic growth that we have seen this year could help lift millions out of poverty, particularly in the fast-growing economies of South Asia. But growth alone won’t be enough to address pockets of extreme poverty in other parts of the world.”

World Bank Group President Jim Yong Kim said.

 

Policymakers need to focus on ways to support growth over the longer run

 

By boosting productivity and labor force participation in order to accelerate progress toward ending poverty and boosting shared prosperity. Activity in advanced economies is expected to grow 2.2 percent in 2018 before easing to a 2 percent rate of expansion next year, as central banks gradually remove monetary stimulus, the June 2018 Global Economic Prospect essays.

 

Growth in emerging market and developing economies

 

Overall is projected to strengthen to 4.5 percent in 2018, before reaching 4.7 percent in 2019 as the recovery in commodity exporters matures and commodity prices level off following this year’s increase.  This outlook is subject to considerable downside risks. The possibility of disorderly financial market volatility has increased, and the vulnerability of some emerging market and developing economies to such disruption has risen. Trade protectionist sentiment has also mounted, while policy uncertainty and geopolitical risks remain elevated.

NEW World Bank report says global growth to slow to 3% in 2019 from 3.1% in 2018, as slack dissipates, major central banks normalize policy, trade and investment moderate.

 


 

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Economic Trends|News section pursuing a compilation of the main economic indicators|

 

Infinite Map

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The dividend policy

A company will have a direct impact on the amount of retained earning available for investment. A company which consistently pays out a high proportion of distributable profits as dividends will not have much by way of retained earnings and so is likely to use a higher proportion of external finance when funding investment projects.

“Corporations with more diverse boards of directors are less prone to take risks and more likely to pay dividends to stockholders than firms whose boards are more homogenous.”

Firms need to take risks to run business. However, excessive risk taking may endanger their survival. Therefore, investors and regulators have broadened the board’s role to include corporate risk oversight, especially since the wake of the financial crisis in the late 2000s.

Most research on board diversity has focused only on gender diversity.
We used a broader-than-normal definition of diversity, encompassing gender, race, age, experience, tenure and expertise.

We looked at company records and employed five variables to measure risk: capital expenditures, research and development expenses, acquisition spending, the volatility of stock returns and the volatility of accounting returns.
The first three variables are direct measures of corporate risk as firms can adjust risk by directly altering their investment policies and spending. The last two variables measure corporate risk taking using the volatility of firms’ market and accounting performances.

“Firms with more diverse boards spend less on capital expenditure, R&D and acquisitions, and exhibit lower volatilities of stock returns than those with less diverse boards.”

Additional analysis showed that companies with more diverse boards were more likely to pay dividends and to pay a greater amount of dividend per share than corporations with less diverse boards. In general, risk-averse firms are more likely to avoid investment projects with uncertain outcomes and return cash to shareholders in the form of dividends.
Having this insight can help avoid costly cultural mistakes at both large corporations and small businesses. Studies showes that most corporate boards are relatively homogenous in gender and race – being mostly white and male. There was, however, considerably more diversity when we factored in characteristics such as age, experience, tenure and expertise.

Measuring diversity based only on gender misrepresents the actual diversity in corporate boardrooms.
On the one hand, diverse boards could reduce the level of corporate risk taking, discouraging innovative and risky projects.

On the other hand, if firm management is overly aggressive in its use of corporate funds for investing in risky projects, our results suggest that more diverse boards could perform better oversight of corporate risk taking than less diverse boards.
Rini Laksmana, associate professor of accounting at Kent State University, and Agus Harjoto, associate professor of finance at Pepperdine University, collaborated on the research for the project reviews.


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