A. One of the most of import accomplishments to larn in managerial economic sciences is the ability to place a good concern. Discuss at least four features of a good concern.
Based on the article about Coca-Cola. there are five indispensable features of a concern for it to be considered as a “Good Business” . First. it should be appealing to both immature and old alike. Second. it must hold a distinguishable characteristic which can non be easy imitated by others. Third. it must already do an impact to the market because it has already earned a big part of market portion. Fourth. net income border and rates of return should be high. And Last. it must hold a competitory advantage or economic fosse.
Appealing to both immature and old alike. The merchandise that the company sells / offers can be used or consumed by people of all ages. It must be enjoyed non merely by selected markets instead it should be enjoyed by all.
Distinct characteristic which can non be easy imitated by others. The merchandise that the company sells / offers must be alone and exceeding. It must safeguard it’s “secret ingredients” . So that it can non be easy imitated by others.
Large part of market portion. The merchandise that the company sells / offers is used or consumed by a big part of the market and must be preferred above other companies who are in the same line of concern.
A good concern must able to deploy a batch of incremental capital at an above norm rate of return for a long clip. If a concern is able to make that. it will in consequence be assisting its stockholders compound their money at a good rate of return and salvaging them the problem of holding to put the excess dividends they would hold received if the company didn’t reinvest in its operations.
A lasting competitory advantage or economic fosse is what sets apart the good and great companies from the mediocre and downright icky companies. A important competitory advantage allows a company to gain better than mean net incomes or possibly even first-class net incomes. and protects the company’s net incomes from rivals that want to acquire a piece of the action. A strong trade name. being the low-priced manufacturer. patents. and holding a close monopoly over a certain market are some beginnings of competitory advantage.
B. Identify and speak about at least four companies that you regard as holding the features listed here.
Apple Company – This popular company is the encephalon behind appliances like iPod. iPad. iPhone. and MacBooks. Their merchandises are user-friendly and can easy be used by people both immature and old. Besides. Apple ever sees to it that their merchandises offer alone characteristics which suit the people’s wants and needs enabling the people to sponsor their merchandises ; therefore in return. gaining a big part of market portion compared to other rivals.
SM Investments Corporation – This is composed group of companies: Retail. Mall Operations. Property. and Banking & A ; Finance.
RETAIL – SM is the Philippines’ most dominant participant in retail with 193 shops countrywide. Of these. 46 are SM Department Stores ; 37 are SM Supermarkets. 76 are SaveMore subdivisions ; and 34 are SM Hypermarkets.
MALL OPERATIONS – SM is the Philippines’ largest shopping promenade developer and operator with 46 promenades countrywide. SM Prime besides owns 4 promenades in China’s 2nd and third-tier metropoliss. viz. Xiamen. Jinjiang. Chengdu. and Suzhou. By the terminal of 2012. SM Prime will hold a sum of 46 promenades in the Philippines and five in China with a combined GFA of 6. 3 mn sqm.
Property – SM’s belongings group is a fast emerging concern with involvements in residential. commercial. leisure and hotel development. SMDC is quickly turning with 15 residential undertakings under its SM Residences and two undertakings under its M Place trade name.
Banking & A ; FINANCE – SM’s bank web is the largest in the Philippines with its 41 % involvement in BDO Unibank and 20 % involvement in China Banking Corp. In 2Q 2012. BDO became the country’s largest bank in footings of assets with 744 subdivisions countrywide. Chinabank is the 8th largest with 307 subdivisions countrywide.
ABS-CBN – is a major Filipino commercial telecasting web owned and operated by the Filipino media conglomerate ABS-CBN Corporation. a publically traded company. It is the country’s taking telecasting web with an advertisement gross amounted to 17. 5 billion pesos for the financial twelvemonth 2011
San Miguel Corporation – is Southeast Asia’s largest publically listed nutrient. drink and packaging company with over 17. 000 employees in over 100 major installations throughout the Asia-Pacific part. San Miguel carries many trade name names in the Filipino nutrient and drink industry. including San Miguel Pale Pilsen. Ginebra San Miguel. Monterey. Magnolia. and Purefoods. San Miguel Beer is one of the largest merchandising beers and among the top 10 selling beer trade names in the universe. SMC fabricating operations extend beyond its place market to Hong Kong. China. Indonesia. Vietnam. Thailand. Malaysia and Australia ; and its merchandises are exported to 60 markets around the universe.
C. Suppose you bought common stock in each of the four companies identifies here. Three old ages from now. how would you cognize if your analysis was right? What would convert you that your analysis was incorrect?
Supposing I bought common stock in each of the four companies indentified above ; three old ages from now. I would cognize that my analyses were right by merely looking back and measuring if the company still suffice the list of features of a good concern. I will be convinced that my analyses were incorrect if it will non do even merely one of the features listed for it to be considered as a “good business” .