Corporate Strategy Management

Posted on October 5, 2013 by Sultan

Pfizer Social MediaPfizer corporate strategy – Setting up a social media strategy for Pfizer

The new digital social media is becoming a paramount important to the pharmaceutical industry, the industry that has been criticised for being slow to begin the transition into the online digital community. However, the FDA has been slow to issue formal regulations to provide an official social media policy, and a wooly relationship exists between leading pharmaceutical players and the market capture of social media. Benefits of engaging in social media include enhancing reputation, customer service, and sales. Challenges include individual or corporate lawsuits, cyber-security regulations, and, most extremely, public health crises. Therefore, a balance must be struck for the pharmaceutical industry to appropriately harness online information.

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Executive Finance – Business Valuation

Posted on October 5, 2013 by Sultan

Business ValuationThe ability of firms to create value for their shareholders is related to the way they treat their customers, employees and community.
Corporate Decision Making requires the following:
1- Capital Bufgeting Decision: Measure the NPV and IRR, if the NPV is +ve then the project creates value, if the IRR>WACC then we should invest.
2- Capital Structure Decision: Calculate the WACC, how much of the firms assets should be financed by equity and how much should be financed by debt?
3- Business Acquisition Decision: How much should be paid to acquire another company?
4- Foreign Investment Decision: How to account for multiple currency cash flows and for the different risks of operating in a foreign country.

Entry Barrier strategy to prevent competitors from entering the market:
1- Patents and Trademarks on Products
2- Building a Powerful brand name similar to Cocacola
3- Produce an innovative and attractively designed products that cannot be easily immitated by competitors such as APPLE products
4- Create a unique Distribution Channels similar to Dell computers, manufactured to order and delivered by mail
5- Try to be the market’s lowest cost producer such as samsung

 

Posted in Business Acquisition, Business Valuation, Capital Budgeting, Fiat, Foreign Investment | Leave a comment

Long Term Financial Policies

Posted on October 5, 2013 by Sultan

Linkedin

Going public is a monumental decision for any company. It forever changes how a company goes about doing business. A public company has access to more, and often deeper, sources of capital than a private company. The actual process of going public can be time-consuming and presents certain unique challenges that a company should be prepared to undertake.

The Linkedin IPO process is a good example and started by the  planning of the IPO followed by:

Days1-60:Registration of the statement form and preparing the registration statement

Days 61-90: Filling the registration statement with the SEC

Days 91-100:Responding to the SEC letter of comment and preparing the amended registration statement.

Underwriters for the IPO were led by Morgan Stanley, Bank of America Merrill Lynch and JPMorgan.

LinkedIn’s rise was the biggest for a newly public Web stock. LinkedIn is one of few foreign social networking companies that can operate in China, where it has about a million users. Many other sites including Twitter, Facebook and Google don’t have a presence in the world’s biggest Internet market.

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Economics – Taxation

Posted on October 5, 2013 by Sultan

Taxation The Irish Taxation System

Benjamin Franklin once said “In this world nothing can be certain except death and taxes”. Ireland, like many other countries in the Euro zone, has implied a rigorous tax system.
The Irish total tax revenues for 2012 were EUR36.6bn where Personal income tax brought in the most of it, at EUR15.2bn. Value-added tax (VAT) generated revenues of EUR10.2bn, while excise and corporation tax (the other two “big tax heads”) totaled EUR4.7bn and EUR4.2bn respectively.
According to OECD revenue statistics, the tax revenues as percentage of GDP in Ireland is 30.4%, placed number 16 in the world.

The best strategy  for Ireland to generate more revenues is not by increasing the income taxes but setting strict rules related to business and corporate taxes.

Posted in Economics, Taxation, The Irish Taxation System | Leave a comment

Human Resources Management

Posted on October 5, 2013 by Sultan

Human ResourceHow important is the HR department in corporations? HR role is not only to attract the best talents, its more about motivation and productivity. The 1st KPI for HR is to increase productivity and reduce employees Turnover (safet net, Employment at will, Prevention Vs Intervention) by complying with all the applicable laws such as ADEA, ADA, EEOC, AAL, etc. HR should comply with all the applicable laws because if we have violation in the law for example sexual harrassment, this will incur high cost to the corporation. The 2nd KPI is Don’t mess with the zone of compliance to meet with the laws and the 3rd KPI is satisfying and motivating employees.

3 pillars under HR: Systems and Procedures, Personal, Training and Development.

The Internal Environment covers Culture (Philosophy, ethics, etc) and Organization structure (Tall, flat, etc).There is interdependence between culture and structure (TheoryX and Theory Y of management).
The external Environment which is mainly the social responsibility.

Social Responsibility Strategy:
1- Obstructional Strategy: When it comes to ethical and legal obligations, not everything legal is ethical and not everything ethical is legal.
2- Defensive Strategy: What’s legal = What’s ethical, Company follow the laws as they are.
3- Accomodation Strategy: What’s ethical=What’s legal + Extra
4- Proactive Strategy: Leader in salaries and benefits.

Motivation Theories (Different Schools of Management):
1-Mclelland: As managers, we need to satisfy 3 types of people. People who have need for power, people who have need for achievements and people who have need for social life affiliation.
2-Maslow: A pyramid of 5 layers: Existance (Physiological, Safety), Relatedness(Social), Growth (Self Esteem, self Actualization).
3-Hygiene Theory of Motivation developed by Hersberg, added the hygiene factos, Lack of the Hygiene factor will lead to dissatisfaction.
4-Expectancy Theory devised by VROOM: Me=f(E, I, V) or Motivation of employees is a function of Expectancy (Management by Objectives, Efforts will lead to performance), Instrumentality (Linkage between performance and reward) and Valence (Reward will lead to value).
5-Equity Theory of Motivation: 2 types of Equities (Internal and External Equity). Each employee will compare the ratio of his output over his input to someone else with the same qualifications and same work in the same company (Internal Equity) and external companies (External equity)
6-Blake and Mouton: The concern for people and concern for production axes.
7-Hersey and Blanchard: Situational School of Management, Manager can change his style from X to Y and viceversa based on the level of maturity of employees and developed the 4 situational leadership styles (Tell, Sell, Delegate, and Consult or participate)
HR Diagnostic Approach: Diagnose, Devise, Implement, and Evaluate.
Selection Process: Due Deligence, Due Process, Pro Bono, QUid Pro Quo, Status Quo.

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Economy – Fiscal Policy

Posted on October 5, 2013 by Sultan

Fiscal PolicyAnalysed the debt development for Spain, Greece, Italy by performing debt sustainability analysis and checking the debt to GDP and deficit to GDP ratios. Set an economic reform strategy for revenues and expenditures and debt reform strategy by introducing the medium term debt management strategy MTDM, applying Debt Restructuring to reduce the contracted interest rates on debt services and Debt Refinancing by replacing the existing debt instruments (loans and bonds) by more favorable instruments to reduce the cost of debt service

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Quality Management – Health Care

Posted on October 5, 2013 by Sultan

Health Care1If we are truly committed to Quality, almost any mechanism will work. If we are not, the most elegantly constructed of mechanisms will fail” – Avedis Donabedian

According to the Institute of Medicine, quality is defined as the “degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge”. It is doing the right thing at the right time in the right way for the right person and having the best possible results.

It wasn’t until the 1999 when the quality of health was given high importance after the Institute of Medicine published the most famous articles in the health care revolution “To ERR Is HUMAN” and “Crossing the Quality Chasm” where the IOM highlighted that the health care in the US not as safe as it should be with 44,000-98,000 annual deaths as result of medical errors where 25-50% of these errors could be prevented. The concept of quality has evolved after that to include Quality Control; Quality Assurance; Continuous Quality Improvement CQI and Total Quality Management TQM.

 

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Corporate Strategy Implementation

Posted on October 5, 2013 by Sultan

Norton and KaplanThe business model is the baseline for any strategy. A clear vision was behind the success of great companies: Vision on Nike in 1980 was “Crush adidas”, Vision of Sony after Hiroshima and Nagazaki was “Going to elevate the whole Japanese Culture”. Not only the vision but also the mission, knowing why I am here and why I exist was the cornerstone of great companies: The Mission of Merck was ” Advance the health of human beings” and Profits will come will come. After the vision and Mission, its critical to have clear objectives and strategies (Cost Leader, Differentiator, etc ) using EFE, PESTEL, CPM, SWOT, BCG matrix and VRIO model. Finally, if you have a great strategy and you don’t know how to execute, as if you don’t have a strategy. Norton and Kaplan studied companies and came up with the following results “90% of companies failed because they dont execute” and came up with the Balance scorecard (Looking inside and outside the companies)composed of 4 main indicators:
1- Financial Indicators
2- Customers
3- Internal Processes
4- Employees (Learning and Growth)
Final Project: Setting the balance score card for the departmenet I work for in Ericsson including the financial, customer, internal processes and employees KPIs.

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Finance – Working Capital Management

Posted on October 5, 2013 by Sultan

Operation CycleNWC= CA – CL
Managing a working Capital incurs some cost. Having Cash sitting idle is a carrying cost.
Its very important to match the Asset and Liability maturities
Operation Cycle= Inventory Period+Accounts Receivable Period
Cash Cycle= Operation Cycle – Accounts Payable Period
Before setting a WC and Profitability strategy, its critical to calculate the Liquidity risk and Interest Rate risk, and measure the Interest Profit Margin which is the difference between Interest on Loans and Interests on Deposits.

Final Project: Analysed a case about Johnes Electric Distribution by evaluating the company operational and financial performance (Financial Ratios). Analysed the operation cycle (Inventory and receivables turnover) and cash cycle and performed a forcasted balance sheet, financial statement and cash flow statements for 3 years.

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Economics – Pricing Techniques

Posted on October 5, 2013 by Sultan

Pricing TechniquesPrice Elasticity Of Demand: Apple products are Luxurious, meaning that they are Elastic. Apple total revenues moves directly with the demanded quantity.
Own Price Elasticity=-0.1 meaning that for 1% increase in own prices, there will be a 0.1% decrease in the quantity demanded.
Cross Price Elasticity (Substitutes)=0.5 meaning that for 1% increase in competitor’s prices (Samsung, Blackberry), there will be a 0.5% increase in the quantity demanded.

Mobile Phone Market Structure: The mobile market characterized by its imperfect competition meaning that companies like apple can influence the market by controlling their prices.
In Imperfect competition, P is a function of Q. we can maximize our Profit by having the Marginal Cost equal to the marginal Revenue.
Apple don’t produce above the Q* point where the MC=MR, that’s why its showing high net income in their balance sheet.

Pricing Techniques:
Apple is using a Cost-Plus pricing technique. Since the demand is less-elastic, the profit-maximizing markup factor is high. Apple is not following any natural monopoly or oligopoly Pricing.

Pricing Strategies used by Apple:
Skimming: Apple products are sold at high prices, sacrificing sales to gain high profits.
Temporal Price Discrimination: Apple are not discriminating their prices in terms of geography or users but in terms of versions where it proposes many versions of products according to the needs and prices of their customers.

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