MBA Notes: How are new products developed?

Exploration : This is the first stage of new product development begins with the idea of a product. Thus, this step is also known as

" Idea Generation " . Ideas can Origination Research and Development , distributors, consumers , employees, etc. All ideas may not have the immediate potential market. At the same time, a company should always have a collection of different ideas for the creation of a new product is the condition of survival in many industries. The activities carried out in this stage are: -

i . ) Determine the field of products of interest to the company.

ii . ) The establishment of a program for generating ideas.

iii . ) Gather ideas through an organized work.

Projection : This is the second stage, when collected and reviewed to eliminate those who are not in conformity with policies of products and services ideas. Some ideas can always be protected by patents. Some other policies may not be eligible for consideration by the lack of availability of resources for production. The main purpose of this step is to remove only inadequate ideas as quickly as possible . Here the strategy adopted includes:

i . ) Expanding each idea on the concept of complete product.

ii . ) Collect data and reviews to decide whether the idea could turn into a business proposition .

iii . ) The evaluation of each idea of ​​their potential value to the company.

Business Analysis : This is a continuation phase of the previous stage. Here , the creative analysis is applied to the finally selected idea. Product features are analyzed and rough set for program development. This step emphasizes :

i . ) Further study on each idea in detail.

ii . ) The determination of the desirable characteristics of the product and market viability, and

iii . ) Development of specifications and the establishment of a definite program for the product .

Development : During this stage, the idea became hands on the product. The idea becomes a product that is producible and demonstrable . It is during this stage all the developments of the products; from idea to final physical one , which was sold in the market is held . Once the organization decides to pursue the idea of the product, the following activities :

i . ) Modify the product with modified characteristics .

ii . ) Competing laboratory evaluation and the completion of the test product.

Proof: The objective of this stage is to consider whether the product meets the technical and commercial objectives displayed in the original. The test may be the proof of concept , product testing and finally the test marketing .

Marketing : In this stage , the product is presented to the target market and begins his life through various stages of life cycle. It is also the stage where marketing is fully involved with new products and services . This is the last step and is considered the most important and fundamental to any new product and should be handled with care. You should check if advertising and personal selling have actually done and if suitable outlets are arranged for the distribution.

Monopolistic Competition MBA Notes

A large number of companies, product differentiation, competition on price, quality and product marketing, and businesses are free to come and go: Monopolistic competition is characterized by four factors.

A large number of companies

The large number of companies means

• A small market share of each company.

• The domination of one company, so that no one fixed the shares directly to the actions of other companies.

• Agreement is impossible because there are so many companies.

Product differentiation

Product differentiation makes a product that is slightly different from that of companies competing products. As a result, there are not perfect substitutes and if the monopolistic competitive firm faces a downward-sloping demand curve.

Competition on quality, price and marketing

A monopolistically competitive firm will compete on:

Quality

A company promotes the idea that their product has better quality than their competitors' products. These attributes include the design, reliability, service for the buyer and the buyer easy access to the product.

Price

A monopolistically competitive firm, the company is fixed at both its price and its performance against a downward-sloping demand curve.

Marketing

A company uses advertising and packaging of its products known for uniqueness.

In and out

If firms in monopolistic competition earn an economic profit in the short term, new firms enter the market. This increase in supply and demand takes each company lowers the price until gaining a normal profit. If companies are short-term economic losses, some firms exit the industry. The price rises to a normal profit is earned by other companies.

Identifying Monopolistic Competition.

The ratio of four-firm concentration

Dynamic models of oligopoly: Harwood Fundamentals of Applied Economics

The concentration ratio of four companies is the percentage of the value of the share of sales of the four largest firms in a sector. A ratio of four-firm concentration exceeds 60 percent, is considered indicative of a market that is highly concentrated and dominated by a few companies of an oligopoly. Less than 40 percent ratio is considered an indication of monopolistic competition in the competitive market.

Herfindahl-Hirschman Index

The Herfindahl-Hirschman Index (HHI) is the square of the percentage (or the sum of all firms, if under age 50) are a combined market share of each company in the 50 largest firms in the market . If the HHI is greater than 1,800, the market is considered competitive. This is as a guide by the Ministry of Justice to make decisions on whether to challenge a merger used.

Limitations of concentration ratios

a. The geographic scope of the market

Concentration ratios have a national perspective on the market, but some products are in regional markets (in this case, the degree of competition may be overestimated) and others in global markets (in this case, the degree of competition could be underestimated) sold.

b. Barriers to entry and firm turnover

Concentration ratios do not take into account the presence or absence of barriers to entry.

Capital Budgeting - Significance of Capital Budgeting

WHAT IS CAPITAL BUDGET?

Capital budgeting decisions as the company's decision to invest this fund current activities may be better established in long-term forecasts of the expected stream of future benefits over a number of years.
Future benefits may take the form of lower costs, higher revenues, simplification of processes, improve quality, etc.
Decision capital budget includes the purchase and sale of assets, the replacement of old equipment with new, including leased equipment and the implementation of new projects. Make investments, capital management long-term investment decisions. Asset management, etc., is another name for the capital budgeting decision.

FEATURE OF CAPITAL BUDGETING DECISION:
a) Key Features of the decision of investment appraisal can be listed as follows
b) The funds will be invested in the current period in order to obtain future benefits.
c) receive future benefits are based on a series of the year and in one year.
d) There is often a relatively long period between the initial investment and get the first return.
e) A relatively high degree of risk involved in investment accounting, change that many factors in the future.
f) Cost of investments and the benefits of this investment should be measured in terms of cash flow and not in reference to the book profits.
g) The election of a worthwhile investment to the objectives of maximizing shareholder wealth by maximizing the value of the concept of justice.

SIGNIFICANCE OF CAPITAL BUDGET
Investment budget is very important for a business, and it is necessary to the investment plan for the following reasons:
Capital budgeting decision has long-term significance. The effect of the decision of the investment analysis will continue in the long term. Therefore, any wrong decision, the burden for a long time taken to be worn. The future prospects of a company depends largely on its own expenditure. The company can earn huge profits if they can make appropriate investments at appropriate times. Therefore, the company should have is sufficient reflection and consideration before making such decisions.
Investment decisions in general to large sums of money. These investments are back for a long time, but to get the goods, a company needs to invest huge sums of money. So, before you make such an investment, the company must take enough care and arrange for the collection of large funds.
Investment budget decision is irreversible in most cases. If a machine on the goods after purchase, it is difficult to recover the money from the sale, since the goods in question are very limited market. Thus, in many cases, the company has no choice but to give up, as the goods for sale at throw away price.
Investment requires big money. No company has unlimited money. If the money is not only wrong, loss of business is invested, it will also be deprived of profits would be derived from alternative uses of the money.
Investment appraisal is important because they are to make the difficult decision. To make such a decision must anticipate future events and the future revenues and expenditures. The future results can not always be expressed in monetary terms.
Based on a decision of budgeting, business investment in particular may increase the risk. Suppose that due to the adoption of a proposed investment, the company's turnover, but the fluctuation of income at the same time increased was also increased, in this case both the increased earnings and risk position the company. The cost structure of the company's future is also linked investment appraisal decisions.

MBA Notes: Pricing for Global Markets

The price is an important element of global business strategies. However, it is very difficult on the international stage, with various factors, such as multiple currencies, additional costs, a wider distribution network and complex trade barriers and heterogeneity in the markets.

Prices in effect has an impact on the value for the customer. It also has an indirect influence on the strategy for the promotion and may for some other gaps in the marketing mix to make.

It is important for managers to pay close attention to during the development of pricing policy. Apart from production costs and analysis of supply and demand, must they consider other factors such as insurance costs, fluctuations in exchange rates, etc. The most important influencing factors on the pricing decision as follows:

• Type of business / type of product - a product that is new to the market and has little or no competition can have a high price. However, as competition increases or reduces technological advantage, the company should effectively pricing strategies based on the focus of selected market segments.

• Location - A company has manufacturing facilities in foreign countries often relative advantage over companies that are in their home country and still exports. This is because some changes in the economic policies of the countries heavily in export activity.

• Distribution - An exporter who has its own subsidiaries outside the distribution has a greater influence on pricing decisions in relation to those who bank with independent distributors. Independent distributors tend to highlight the prices significantly. This problem may be by reducing the number of intermediaries between the company and the final consumer, setting up its own subsidiaries overseas minimized on the market.

• Foreign markets - external environmental factors contribute to the complexity of pricing.

• Differences in foreign currencies - Several economic factors such as inflation influence, and regards price controls, exchange rates, the pricing decisions.

Many companies follow the central price, because it helps the consistency in terms of price. This in turn prevents the unauthorized importation of cheaper countries to sell in expensive markets. A company faced with almost the same competitors in different markets on the world stage. For example, a fragmented strategy will not be very effective. Centralized price leads to a better forecast and plan effectively for the production. This is necessary in order to create uniformity, if the company seeks to market its products comprehensive set of homogeneous markets, which are distributed in different countries. These are markets that may differ in terms of geographical presence, however, market segments and customer requirements. However, a company promotes decentralized prices on some occasions. It is necessary to freedom, subsidiaries or distributors be to change the pricing policy, if there are sudden need for change due to external factors. For example, the companies have to follow the market trend, if there are more players in the region. The authority should amend the prices are taken to be that society does not lose market share because of a delay in the implementation of changes. You can also make changes if it were a market where most or all of the customers belong to a group with low income. It is important that the prices will meet local needs.

Enhancing Creativity - Gordon Technique

William J.J.Gordon worked with creative-thinking groups and had a variety of other creative activities. He was afraid that people will come, when asked, with a new creative idea, dear incrementalize. In other words, make it an alternative to a gradual improvement. While this may result in slightly better alternatives alternatives probably not real progress. Gordon decided that one way to avoid this problem would not simply say to the people what they forged. For example, uses the technique of focusing first on Gordon-function. Instead of saying, can build a better mousetrap, the group initially said that the focus has been entered. Instead of the group responsible for the development of an improved knife, the function could be expressed as a fraction.

Synectics
Caffeine for the Creative Mind: 250 Exercises to stimulate your brain gordon also developed a well-known technique called Synectics. Synectics means "the combination of seemingly disparate elements." First, set of very different people together in groups Synectics to get a real variety of perspectives. Secondly, Synectics relies heavily on the use of analogies. Synectics techniques were often taken over by companies and educational institutions. Three tools to Gordon Synectics direct analogy, personal analogy, and the analogy of the imagination.

Direct analogy: 

It is looking for evidence in parallel, the knowledge or technology in an area different from the development. For example, we may believe something similar happens in nature?

Personal Analogy:

With this approach, the Synectics Group to identify psychologically with the most important pieces of the problem to try. In one case, for example, the group was invited to a mechanism that would work a rotating shaft 400 to 4000 revolutions per minute, so that the end of the PTO at 400 revolutions per minute would constantly turn design. To answer this question, the group entered the metaphorical box and I tried to use her body to the speed required to achieve without excessive friction.

Fantasy analogy:

Sigmund Freud saw creativity as the fulfillment of a wish or a fantasy. Fantasy analogy asks how many in wildest dreams that I can do? Gordon gives the example of a group of Synectics, to invent the task of a closure to the vapors of space suits. Their solution was a spring mechanism on the analogy of an imaginary line through the accession of insect claws closed bolt holding formed based.

It is more than just Synectics use of analogy. The technique follows a structure to solve the problem, interact and in what order a client and other participants to develop a viable solution for the customer. For example, after the problem was presented and discussed, there is a "stepping stone" in which the problem by the client for the concerns, opinions and wishes in states such as "I want to convert is open ..." or " How to ... ". Later, after a first idea was developed and refined, "detailed response" step requires the client of three useful functions or benefits to keep the idea and to generate key concerns. Still later, after the group is working to change the proposal in order to overcome these concerns, the "possible solution" to the elements of novelty and viability checked and, if there is sufficient commitment to the solution of additional measures. Finally, the customer, the steps to implement the solution, simple to use and the schedule and staff.

MBA Notes - The Monopoly Market

There is a single seller in monopoly. This is exactly the opposite of perfect competition.

Characteristic

• There is only one company that sells the product.
• The company has no direct rivals or competitors.
• Substitutes may exist. However, close substitutes are not available.
• Difficult entry for other companies.
• Monopoly is the price that producers and tried the best available, demand and cost conditions, without the fear of new businesses that take in the competition.
• Monopoly is not a permanent condition. For reasons such as the development of substitutes, the entry of new firms, etc., a company that is now a monopoly not a monopoly may in the future.

Prices under monopoly
Aggregation as a mechanism to sell multiple optimal for a monopolist good. The price and monopoly power are determined based on certain assumptions, the price discrimination monopoly, companies are not defined. It aims to maximize returns. The individual buyer is a price taker and the company holds a monopoly in the state of no restrictions in terms of price.

    The company monopoly control of both the price and supply of the goods, but one at a time.
    The firm's demand curve is the same as the demand curve in the industry.

a) prices in the short term
The monopolist seeks to gain increasing performance to a level where the additional income to maximize cost extra. A monopoly can be profit or losses in the short term.

Strategy
The company can benefit by making the price higher than the cost and demand, caused by the specified units of the commodity.
Puck Magazine April 29.1885 - Jay Gould and monopolists may-pole
But the company may suffer losses as well due to the request of his misjudgment in determining the price or determination. In addition, the risk of competitors, the prices set below cost leading to a loss in the end.

The monopoly in the short term may be to price or quantity. He can not fix both. The company has a strategy to maximize profits or minimize losses led to the development. The company must be alert to the possibility of its competitors.

b) Pricing In The Long Run
The short-term gains would certainly attract other companies to enter the market. With the entry of new firms in the market would change from a monopoly to oligopoly or perfect competition.

If the control of society for scarce resources, it may prohibit the entry of new companies and take advantage of their monopoly. In the long run, it is not necessary that companies use their existing equipment to optimize its performance due to the lack of competition.

However, it is necessary for the company to take a loss on the long term. The size of the facility and how they can be used depends on the demand for raw materials.

A monopolist is in a better position to exploit the market and may limit the penetration of external companies in the industry. It is the concentration of economic power in the market where a monopoly exists.

MBA Notes-The Production Possibility Frontier

Consider the case of an island economy that produces only two goods: wine and grain. In a given period of time, the islanders may choose to produce only wine, only grain, or a combination of the two according to the following table:

Production Possibility Table

Wine (thousands of bottles)	Grain (thousands of bushels)
0	15
5	14
9	12
12	9
14	5
15	0

The production possibility frontier (PPF) is the curve resulting when the above data is graphed, as shown below:

Production Possibility Frontier

The PPF shows all efficient combinations of output for this island economy when the factors of production are used to their full potential. The economy could choose to operate at less than capacity somewhere inside the curve, for example at point a, but such a combination of goods would be less than what the economy is capable of producing. A combination outside the curve such as point b is not possible since the output level would exceed the capacity of the economy.

The shape of this production possibility frontier illustrates the principle of increasing cost. As more of one product is produced, increasingly larger amounts of the other product must be given up. In this example, some factors of production are suited to producing both wine and grain, but as the production of one of these commodities increases, resources better suited to production of the other must be diverted. Experienced wine producers are not necessarily efficient grain producers, and grain producers are not necessarily efficient wine producers, so the opportunity cost increases as one moves toward either extreme on the curve of production possibilities.

Suppose a new technique was discovered that allowed the wine producers to double their output for a given level of resources. Further suppose that this technique could not be applied to grain production. The impact on the production possibilities is shown in the following diagram:

Shifted Production Possibility Frontier

In the above diagram, the new technique results in wine production that is double its previous level for any level of grain production.

Finally, if the two products are very similar to one another, the production possibility frontier may be shaped more like a straight line. Consider the situation in which only wine is produced. Let's assume that two brands of wine are produced, Brand A and Brand B, and that these two brands use the same grapes and production process, differing only in the name on the label. The same factors of production can produce either product (brand) equally efficiently. The production possibility frontier then would appear as follows:

PPF for Very Similar Products

Note that to increase production of Brand A from 0 to 3000 bottles, the production of Brand B must be decreased by 3000 bottles. This opportunity cost remains the same even at the other extreme, where increasing the production of Brand A from 12,000 to 15,000 bottles still requires that of Brand B to be decreased by 3000 bottles. Because the two products are almost identical in this case and can be produced equally efficiently using the same resources, the opportunity cost of producing one over the other remains constant between the two extremes of production possibilities.

Source: www.netmba.com

MBA notes download

MBA Notes Download

Supply Chain Management
http://www.meiss.com/download/MBA-Supply-Chain-Management.pdf

Revenue Management
http://www.meiss.com/download/MBA-Revenue-Management.pdf

Viral Marketing
http://www-personal.umich.edu/~ladamic/papers/viral/viralTWeb.pdf

Corporate Finance
http://web.mit.edu/career/www/guide/finance.pdf

Behavioral Finance
http://bear.cba.ufl.edu/ritter/publ_papers/Behavioral Finance.pdf

Branding Tips
http://www.score.org/pdf/Sony e-guide 3-09.pdf


source: http://www.pdfqueen.com

MBA study material-Annual report

What is Annual Report
An Annual Report is a statement prepared by companies that are traded publicly. The development of an Annual Report provides inherent value in the process of reviewing major financial and operational achievements that occurred during the past 12 months.
The contents of Annual Reports may vary by industry, but usually includes the following:

* A Balance Sheet
* An Income Statement
* Company stock pricing trends
* A Letter to Stockholders
* An Individual Report from the Chief Executive Officer
* An Individual Report from the Chief Financial Officer
* Major Accomplishments during the past year

In the United States, the contents of an Annual Report became more stringent after the passage of the Securities and Exchange Act of 1934. Prior to that act, some companies had been less than forthcoming or in some cases even deceitful in their reports. The financial aspects of an Annual Report are audited by a certified accountant.

The more detailed disclosure was required in order to better inform potential stakeholders such as those outlined below:

* Current Shareholders
* Potential Shareholders
* Current Donors (if applicable)
* Future Donors (if Applicable)
* Potential Business Partners
* Employees
* Customers
* Applicable Government Entities

An Annual Report does not have to be viewed as a staid document full of boring figures. In fact, an astute marketer can mine the basic elements for marketing gold. Just as promotion tactics are devised with marketing segments in mind, in like manner an Annual Report can be tailored to speak to the concerns of its audience.

MBA study material-Brainstorming

What is Brainstorming
Brainstorming is simply a means of getting a large number of ideas from a group of people in a short time. Brainstorming is great for marketers! Marketers can generate new creative ideas for products, services, solutions or concepts. Not only is brainstorming useful for creative thinking, but is can also be used for marketing problem solving and marketing decision making.

Successful brainstorming depends upon four key rules:

1. Suspend judgement.

2. Let yourself go and freewheel.

3. Go for quantity - quality implies evaluation (which means that you have not suspended judgement).

4. Cross-fertilize - pick up someone else's ideas and suggest others leading from it.
Steps in Brainstorming.

A. State the problem.

B. Restate the problem.

C. Select restatement.

D. Warm-up.

E. Brainstorm.
Oiling the Wheels

If brainstorming group dries up the leader can get the ideas flowing again by using any one of the following approaches:

1. Silent review - let the group review silently the ideas already generated in order to stimulate their thinking.

2. Quantity targets - encourage the group to go for 10, 50 or 100 ideas!

3. The one idea - get the group to focus on one idea and use that as a stimulus.

4. Select a restatement from the list the group produced earlier and brainstorm it.

5. Wildest idea - let the group silently review the ideas already generated in order to use the wildest idea as a stimulus for more productive ideas.
Evaluating ideas

1. Scrutinise all the ideas and pick out any that instantly jump out at you.

2. Sort the remaining ideas into groups of a manageable size and examine using some predefined criteria e.g. profitability or relative competitive advantage.

3. Subject ideas to reverse brainstorming. Ask the question 'In how many ways can this idea fail?'

Micro Environment for organization

Micro Environmental Factors
These are internal factors close to the company that have a direct impact on the organisations strategy. These factors include:
Customers
Organisations survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to do so will result in a failed business strategy.
Employees
Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of an organisation. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge. This is clearly apparent in the airline industry.
Suppliers
Increase in raw material prices will have a knock on affect on the marketing mix strategy of an organisation. Prices may be forced up as a result. Closer supplier relationships is one way of ensuring competitive and quality products for an organisation.
Shareholders

As organisation require greater inward investment for growth they face increasing pressure to move from private ownership to public. However this movement unleashes the forces of shareholder pressure on the strategy of organisations. Satisfying shareholder needs may result in a change in tactics employed by an organisation. Many internet companies who share prices rocketed in 1999 and early 2000 have seen the share price tumble as they face pressures from shareholders to turn in a profit. In a market which has very quickly become overcrowded many havel failed.

Media

Positive or adverse media attention on an organisations product or service can in some cases make or break an organisation.. Consumer programmes with a wider and more direct audience can also have a very powerful and positive impact, hforcing organisations to change their tactics.

Competitors

The name of the game in marketing is differentiation. What benefit can the organisation offer which is better then their competitors. Can they sustain this differentiation over a period of time from their competitors?. Competitor anlaysis and monitoring is crucial if an organisation is to maintain its position within the market.

Basic forms of Ownership

Sole proprietorship: A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has total and unlimited personal liability of the debts incurred by the business.
Partnership: A partnership is a form of business in which two or more people operate for the common goal of making profit. Each partner has total and unlimited personal liability of the debts incurred by the partnership. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.
Corporation: A business corporation is a for-profit, limited liability entity that has a separate legal personality from its members. A corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business's managerial staff.
Cooperative: Often referred to as a "co-op business" or "co-op", a cooperative is a for-profit, limited liability entity that differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.