How do business expand and grow??
We always end up with this dilemma that how do sudden aspects lead to the growth of the business. There are certain conditions which can be considered that uplifts the business to newer heights.
1.Market and customer preference
Many of the entrepreneurs might agree with me that if any business does not have the capacity to satisfy the customers, then it wouldn’t prosper for long time. Naturally, when considering any business, market conditions are evaluated on the basis of customer preference, competition from the existing companies, and resources available for the growth of the company.
customer:- customer can be any company, a group of person or an individual. The cost of retention of existing customers is less then the cost of attracting new customers which should be considered when prioritizing the services. The customers are actually not attracted to funky designs, or secondary features rather they want a good and prompt service from any company.
Competition from other existing companies:-undoubtedly any company fears of not able to compete with the existing companies due to the level of experience possessed, customer hold in the market, and goodwill. The strengths of any company is overwhelmed by its weakness which could be used against the existing companies. Due to the monopoly the existing companies charge high price which could be eliminated by less price. The existing company does not innovate and try new methods cause of fear of falling from the esteemed position which is no longer a concern for new companies.
Resources available from the market:-The resources such as the availability of materials, laborers, skilled employees, infrastructure such as transport, storage facilities, water and electricity which could be used at the best reasonable price. There certain more factors to be considered when acquiring materials from suppliers such as replenishment time, prompt service, availability of suppliers, and the bargaining power of suppliers.
No business can be started without a financial support. The company can be financed through investors, public issue of shares and bank finance. The company needs to set aside larger reserves at the time of investment though there are tools such as budgeted cash flow statement and budgeted balance sheet to certify the approximate amount required for any business venture at the beginning. It wouldn’t suffice only to forecast at very beginning of customer demand and market condition because not much companies make it large at the start itself.
The reserves could be used to set off the loss for few months. The amount brought forth into business carries a interest rate, which needs to paid so as the wages and salaries for laborers and employees, the installments on fixed assets and working capital required for the inventories, and also the rent, taxes and dues.
The conversion of idea into a business needs financial support till the time the company establishes itself in the market.
Economic factors play a major role in growth of companies. Though these factors also lead to closure of companies. The business cycles such as recession, boom, and inflation causes any company to expand, diversify, divest and retreat from its current operation.The inflation emerges due to the excess money in market with less supply resulting in higher prices and ultimate effecting all the industries.
The chronological truth of this era, concluded briefly with this tale.
We have two close friends, both of them are eager to start their own venture and build fortress of their dreams. One among them is very generous, modest and truthful, he wouldn’t carry out any activities which will cause damage to others, in spite of profits. While the other friend is completely opposite who is arrogant, liar, unkind and would succeed at any cost.
After many years, one of them turned out to be the most successful person and other one made enough for living but was loved by all. Its obvious who made out to be rich and who was prospered by love. But will the love suffice to your living?? Or will they help you when you’re in need??
The business in order to survive needs the qualities of both the friends, you cannot act generous always and think of others at crucial time of incurring profits. You cannot lie to the suppliers, shareholders and banks, were modesty is essential and the necessity of being truth to its customers invoking brand loyalty. The overall simplicity of the business which is credited to be complex in the books is purely based on the ability on the managing director to communicate with fellow subordinate and get the work done.
“The immense knowledge and wisdom is no longer a concern when a person is consumed by the obsession”.
The harsh proof of obsession can be seen is in the Indian political system, where even the most qualified person indulges in an perverse activities to gain power. The obsession of power among the political leaders is much more greater then the development of the COUNTRY.
We see political leaders spend huge amount on elections for campaigning, pamphlets, banners and even for organizing public speeches to accumulate wealth of power, which is again used for the personal benefit. These Leaders come out of their gold chested castles only before the elections, to make sure their regime is not disturbed. The elected Minister resides in a house with thousands guards but a middle class person is left unprotected in street from virtual reality of rape, robbery and murder. The rule should be brought forth which will disallow any minister to have any kind of security.
The party who controls the regime does not matter, cause the damage is undoubtedly done to the citizens. The Largest democracy in the world is concentrated only in the fewer hands , rest are left to rot. The People are not fools, nor they don’t understand how actually the political party makes undone promises.
We are only silent, because there is no one prior who can change the course of political system, and these will continue for many more decades yet we stand in belief that in time and with development even political system will grow to be more professional and carry forth the ethics needed in politics.
It seems that ethics, values and principles exhibited by Mr. Gandhi is lost and forgotten.
Hope to see a rising India
A two decades back, a boy born on a full moon day was blessed with not the greatness, nor the richness but the love of almighty himself. The Boy was well nourished by his parents, loved by his grandparents. Time turned into years and the moment arrived when he was sent to the nursery which indeed was the beginning of new challenges, struggles, pain and happiness. The boy was not able to cope up with the local language, struggled but yet failed to move to the next level of the education. The establishment of new school under the central board was just set up at the right moment which ensured the boy’s future. The prolong conversation of admitting the boy into the new school or not carried forth and finally a guide foresaw that the boy was transferred to new school.
The New school was the right kind of school for the boy who developed his skills and enhanced his qualities. The Time again was in mood of playing unfair battle with the boy. He fell sick in the final exam of 9th which left him with no hope to pass but unfair was turned into fair by almighty’s grace which pushed the boy’s limit to succeed.
The 10th was done, now was the age of new teen hood and under the pressure boy took a college which was not capable of providing him better future. The boy dint feel the college environment, which unleashed him to skip college and roam without hope. He sat in church for hours long trying to understand what will be his future.
The time was crucial but again with the help of almighty he was determined to set forth a new task of completing his Puc with only self gained knowledge from books and to the greatest joy he cleared it with the first class.The BBM was his whole new life which taught him not only the core subject but moreover the determination to succeed, achieve the target and immense hope when there is no hope.
Then came MBA which filled his life with love from everyone and there was never a moment when the power of god was never besides him. The hope enchants the person in believing to do something ordinary which is extremely extra-ordinary. The grace and love felt by him when the almighty himself becomes the guide, is something a rare sight yet a beautiful feeling.
That boy is me.
|call option using Bull spread|
|The rule- Purchasing a call option at lower exercise price and selling another call option using a higher exercise price|
|Higher exercise price>lower premium|
|lower exercise price>higher premium|
|A investor buys for INR 10 a call option with a lower exercise price INR 60 and with an anticipation of rise in price, he shorts a call option of premium INR 8 with a higher exercise price of INR 80. The possible price range underlying the assest is|
|cost of strategy=2|
|Possible prices||Pay off from long call E1=60||Pay off from short call E2=80||Total pay off||Net pay|
|Location arbitrage is possible|
|When there is a difference in the value of currency offered by the bank in two different location|
|A -exchange in india for Aed||16.1||16.25||INR/AED|
|B -exchnage in U.A.E||16.3||16.3444|
|Purchase Aed from A-exchange in India AT ASK RATE|
|Sell the 61.53846154 Aed at bid rate with B exchange in U.A.E|
|Profit of 3.076923 INR|
|Question to last problem|
|An importer in order to cover the risk of depreciation in the value of rupee, buys a call option with an exercise price of 16|
|Premium =.50 INR|
|Maturity||Exercise price||Premium||Profit/loss||Net loss /profit on 25000Aed||spot rate after 3months||Amount in Aed||amount payable In rupees||Add the loss due to hegde and subtract the gain from hedge|