business

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 Reasons why stock market may decline

 

 

Introduction

For every company to survive in the market, it must have modalities to ensure its stocks remain competitive. However, this is one of the most unpredictable markets. This owes to a variety of factors as indicated by Glenn Curtis in his article Top 5 reasons for a stock slide. In this article, Glenn asserts there are various factors that contribute to changes in stock market most of which cannot be predetermined. Slav Fedorov in the reasons for stock market decline asserts the causes moves in trends that are major, intermediate or short term. In regard to the two articles, the trends in the market share are determined by competition, investors offloading their shares and poor financial performance among other factors.

Changing trends in the market indicate that prices in stock market change considerably. This owes to varying factor through which the business is operating. It includes among others factors of competition, customer services, pricing and quality of the products on offer.

In the findings of Eadie and Alison (1986), the bigger the market share of a company the more likely it is for the share price of the company to appreciate. This is brought around by the fact that growth in customer base increases the revenues of a company that in effect translates to overall growth of the company. Of importance however, is to note that in order to achieve a niche in the market, there requires massive investment and marketing procedures that will ensure the target group is reached adequately as well as efficient provision of the products of the company.

How competition affects the share price

Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010) on marketing metric states there are various ways through which measures to get the performance of  a particular company can be measured. In what is considered as the common language in business all these measures used by the marketing accountability standards board. It is in the same perspective that J. Scott Armstrong and Kesten C. Greene (2007) in his journal article "Competitor-oriented Objectives: The Myth of Market Share"  he outlines the various strategies that a company management requires to put in place to ensure they are able to gain competitively in the share market. This is further asserted by another journal of marketing research as provided by J. Scott Armstrong and Fred Collopy (1996). The article titled "Competitor Orientation: Effects of Objectives and Information on Managerial Decisions and Profitability" various steps that may be undertaken to improve on the performance of the company and other strategies that may be put in place are scrutinized. This is done in respect to ensure that each and every of the policies put in place will come with positive and negative effects and in such a way gain an insight on what is best for the company in question and the possible repercussions.  Where the company fails to take the competitive advantage in its products, it means the competitors will have a higher advantage in the market and thereby resulting in low revenues. This in effect discourages investors resulting to massive disposal of shares held by investors and as well attracting fewer investors. In such way, the prices of shares tend to fall.

Effect of pricing on shares

Research finding also leads to a great effect on the market shares. This is more likely if the results are released on a negative tone after the company releases its financial reports. In the journal article, “what is the impact of research on stock prices” this often affects the mode of thinking mostly on short term investors who are in the stock market to make quick profits. While this information may not easily available to the investors, the press and the research firm more often releases part or whole of the information to the general public more so if the company in question is a large public company. With growing customer base, the prices of shares tend to grow upwards. This owes to the fact that potential investor read signs of future profitability in the amounts of shares invested. While market forces dictate the price of the shares in the market. The management remains under responsibility to set the precedent on the best price of the company shares. This should be done after an extensive and articulate research has been undertaken to ascertain the performance and possible reception by potential investors

Customer service effect

The customer is one of the most valuable assets in a business organization. Adequate customer satisfaction enhances the growth of the business and as well ensure there is strategic development pattern. In a company, there are varying categories of customers who include the consumers of the company products and the prospective investors. All these customers require to be served adequately to enhance growth of the company. This includes among other factors ensuring they are provided with appropriate information regarding the growth and performance of the company and its products in the market. This is clearly indicated by Hultens, Staffan and Molleryd, Bengt (28 June 2000), in the "Entrepreneurs, Innovations and Market Processes in the Evolution of the Swedish Mobile Telecommunications Industry". Where they assert that in the industry it depends on customers to have the company grow. In such respect failure to satisfy the customers may either lead to decline in overall growth of the company from lack of sales to offsetting of shares by the existing shareholders.

Effects of quality in share pricing

The share portfolio in a company determines its strength or weakness. This is further enabled by the aspect where the company us able to produce high quality products and in such create its niche in the market (H.A. Simonand C.P. Bonini, 1958). This not only make the company strong but also enhances the price the viability of attracting new and existing investors an in such way improve the performance of a given company in the market. As such, the quality of products or services offered by the company give a clear indication on the much strength the company has to sustain itself in the prevailing market and in such way capability to attract investor in form of shareholders  (Givon, M. Mahajan, V. and Muller, E. 1997).

Conclusion

Further growth in the mobile industry, is still projected to remain on the upward trend in the coming years. However, current technological advances dictate that the company reinvests heavily to ensure they are able to keep up with the changing technological trends. This is further enhanced by ensuring an effective customer service team that will be in a position to interact fully with the clients and as in such a way able to ascertain the need s of the client and use it as a platform for more creative products.

 

 

 

 

 

 

 

References

  1. Wemerfelt,(1984). "Consumers With differing Reaction Speeds, Scale Advantages and Industry Structure," European Economic Review. Vol. 24.
  2. Wernerfelt, (1985). "The Dynamics of Prices and Market Shares Over the Product Life Cycle," Management Science, Vol 31'

Boston Consulting Group, Perspectives on Experience (1972)

Browning, Jonathan (18 June 2012). "Vodafone Gets Approval for C&W Bid as Orbis Drops Opposition". Bloomberg L.P. Retrieved 11 December 2012.

C.Y.Y. Woo and A.C. Cooper, (1981)."strategies of  Effective Low Share Businesses, "Strategic Management Journal, Vol.E.

C.Y.Y. Woo and A.C. Cooper, (1982). "The Surprising Case for Low Market Share," Harvard Business Review, Vol. 60, No 6.

H.A. Simonand C.P. Bonini, (1958). "The Size Distribution of Business Firms,"  The American Economic Review.

Hultens, Staffan and Molleryd, Bengt (28 June 2000), "Entrepreneurs, Innovations and Market Processes in the Evolution of the Swedish Mobile Telecommunications Industry". Retrieved 9 September 2013

Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River, New Jersey: Pearson Education, Inc. ISBN 0137058292. The Marketing Accountability Standards Board (MASB) endorses the definitions, purposes, and constructs of classes of measures that appear in Marketing Metrics as part of its ongoing Common Language in Marketing Project.

F,M, Sherer, (1970). Industrial Market Structure and Economic Performance.

Givon, M. Mahajan, V. and Muller, E. (1997). "Assessing the Relationship between the User-Based Market Share and Unit Sales-Based Market Share for Pirated Software Brands in Competitive Markets". Technological forecasting and social change 55 (2): 131–144. doi:10.1016/S0040-1625(96)00181-3

Hasell, Nick (30 June 1999). "Scramble for Vodafone as blue chips retreat". The Times (Times Newspapers).

  1. Scott Armstrong and Kesten C. Greene (2007). "Competitor-oriented Objectives: The Myth of Market Share". International Journal of Business 12 (1): 116–134. ISSN 1083-4346.
  2. Scott Armstrong and Fred Collopy (1996). "Competitor Orientation: Effects of Objectives and Information on Managerial Decisions and Profitability". Journal of Marketing Research (American Marketing Association) 23: 188–199.

Kevin Godbold (2014).How will Vodafone group PLc fare in 2014.

Krause, Reinhardt (8 June 1999). "Vodafone's Quest Begins With AirTouch Alliance". Investor's Business Daily. Archived from the original on 27 September 2007. Retrieved 4 April 2007.

  1. Haspeslagh, (1982). "Portfolio Planning: Uses and Limits," Harvard Business Review, Yol.60, No. I.

Reguly, Eric (20 November 1996). "Vodafone pockets Peoples Phone". The Times (Times Newspapers).

R.G. Hamermesh,(1978), "Strategies for Low Market Businesses, "Harvard Business Review, Vol. 56, No. 3.

R,P. Rumelt and R. Wensley(1981)."In Search of the Market Share Effect," in Proceedings of the 41st Meeting of the Academy of Management.

                                                           

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Partnership

 

 

Name of Partnership Form

Federal Tax Structure

State Tax Structure

Corporate Asset Liability Exposure

Personal Asset Liability Exposure

General partnership

For income tax, only the earnings of individual partners are taxed and not the partnership. Further, each individual partner is liable for Medicare taxes and Social Security taxes on their earnings

Each individual partner is liable for Medicare taxes and Social Security taxes on their earnings

The assets of the partnership are not exposed to liability in case of debts.

Partnership debts and wrongful acts of individual partners are paid from personal assets.

S Corporation

For the income tax, only the shareholders have a tax liability and not the corporation implying that tax is once.

Only the shareholders’ wages and not the dividends are subjected Medicare taxes and social security taxes.

The assets of the corporations are risked to liability in times of claims.

The shareholders benefit from the limited liability in that their personal assets are not exposed in times of liability.

C Corporation

Income tax is done twice on the corporation’s earnings and on the shareholders dividends earned from the corporation.

Only wages and not dividends of the shareholder are subjected to Medicare taxes/social security taxes.

The assets of the corporations are risked to liability in times of claims.

The shareholders benefit from the limited liability in that their personal assets are not exposed in times of liability.

Limited liability company (LLC)

If the LLC has one member, it is taxed as a sole proprietorship (once) but if it has two or more members, it is taxed twice, on the LLC earnings and on personal wages.

Payment of Medicare taxes and Social Security taxes is paid based on whether the entity is treated as a partnership or a C/S corporation.

The LLC assets are liable in times of debts, liabilities, and obligations.

Personal assets are not risked in times of liability, debts, or obligations.

 

 

 

Reference

Smith, J. E., Raabe, W. A., Maloney, D. M., & Thomson Gale (Firm).(2007). Taxation of business entities. Mason, Ohio: Thomson/South-Western.

 

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Proposal: Moller & Maersk (M&M) Group

 

Abstract

Even though Moller & Maersk Group currently operates in over 130 countries across the globe with five core businesses namely Maersk Line, APM Shipping Services, APM Terminals, Maersk Drilling, and Maersk Oil, it is notable that it faces a number of challenges. Even with the understanding of the importance of human resources in an organization, Maersk Group is faced with a number of challenges in human resource management. The talent management issues according to Maersk Group that need to be addressed are increased employee turnover, increased employee diversity, internal training and development programs, rehiring previous employees, and hiring experienced employees from the external labor market. These problems can easily be resolved using cloud-based human capital innovation applications. Cloud innovation alludes to a type of processing where numerous gatherings of remote servers are organized with a specific end goal to encourage incorporated information preparing and stockpiling that gives online access to PC frameworks, assets, and administrations. The essay below explains how cloud-based human capital innovation applications would be applied to solve the HR problems, how it would be implemented, the expected benefits, and recommendations. 

Brief Company background

Moller & Maersk (M&M) Group was founded in 1904 in the Danish City of Svendborg. It currently operates in over 130 countries across the globe. It has five core businesses namely Maersk Line, APM Shipping Services, APM Terminals, Maersk Drilling, and Maersk Oil. The core values in the company that guide the way business is done are constant care, the name, the employees, humbleness, and uprightness. The company policies and core values work together to guide how each business unit as well as how the employees engage with the customers, with the suppliers, colleagues, and the entire community.

Discussion of business problem(s)

Human resources are very important assets in an organization. This is not the era in which human resources were considered objects that could be ordered around. All the activities and tasks in organizations are carried out by human resources. Irrespective of the size of the organization as well as the extent of the resources, the organization succeeds as a result of the performance and capabilities of the people who are the employees. The human resource function in an organization incorporates several activities including the staffing needs the organization has and how to fulfill them, recruitment and training strategies to have the top talents, handling performance issues, and ensuring that the human resource practices conform to the stipulated regulations (Ofori, Sekyere-Abankwa&Brquaye, 2012).

Organizations are required to ensure that human resources continue to be productive assets for the organization. This is done through training and development in which the employees are equipped with the necessary skills that will enable them perform their tasks effectively and to satisfactory levels. Even with the understanding of the importance of human resources in an organization, Maersk Group is faced with a number of challenges in human resource management. The talent management issues according to Maersk Group that need to be addressed are increased employee turnover, increased employee diversity, internal training and development programs, rehiring previous employees, and hiring experienced employees from the external labor market.

 

High level solution

Even with these evidenced challenges, Maersk Group has to have the right talents in the right job at the right time. However, this does not mean that the company should always be losing top talents and hiring new fresh employees from colleges. There is thus need of the company coming up with a training and development program that would help solve the identified human resource issues. Even though there are different ways of ensuring effective training and development programs in organizations, the cloud-based human capital innovation applicationsis among the best. This model has major phases that make the training and development program easy to plan and implement. This is because the training and development program should not only align with the goals of the organization but also with the learning needs of the employees who will participate in the training program (Taylor&Asburry, 2011).  

            Even though all employees in an organization are important, there are some who are critical to others because of their indispensable nature. This is based on the fact that some employees are hard to replace and leaving the organization is a big blow. It is easy to replace the junior employees because their assigned tasks are general and less complicated and new employees can easily learn them. This is not the same case for top managers who require not only the knowledge and skills learned in schools but also the experience that is earned by working in a certain organization (Alagaraja, 2013). These are some of the challenges Maersk might be exposed to as a result of increased employee turnover. Increased employee diversity is also a great challenge to the organization since if not effectively managed, the organization might evidence conflicts. However, with effective management of employee diversity, Maersk would benefit from the advantages of diversity such as varying skills/ talents.

As a result of changes in technology, there is also need of an effective training and development so that they do not get obsolete. With changes in technology, employees should be trained to be conversant with the applied technologies in the organization. Maersk also requires a hiring, training, and development program that will enable it hire experienced and skilled talents from the labor market. This is possible with cloud-based human capital innovation applications (Leavitt, 2009). Maersk should be able to hire and retain top talents by matching them with the right jobs. This also requires rehiring previous employees who have maybe left and become more skilled and experienced in the same positions they held or even in higher positions. The main aim of the developed training and development program is to have the best talents who match the assigned tasks and thus report excellent results. 

Cloud innovation alludes to a type of processing where numerous gatherings of remote servers are organized with a specific end goal to encourage incorporated information preparing and stockpiling that gives online access to PC frameworks, assets, and administrations. Mists can either be private, open, and crossover. Because of this, it turns out to be clear that human capital innovation that is cloud-based includes the sharing of diverse HCM applications between a few clients (Heisterberg&Verma, 2014).

The tasks of the HR manager include handling all HR issues in the organization including hiring the right talents for each job so that they perform the assigned tasks satisfactorily. The HR manager should ensure that the hired employees are trained to fulfill their learning needs. This is beneficial for the organization as employees would be able to perform the assigned tasks effectively and efficiently, meeting targets and standards. With the cloud-based human capital innovation applications, employees would be able to use the applied technology in the organization to achieve the set objectives of the firm through improved performance and productivity (Bidgoli, 2010). The expected constraints include limitation of non-human resources and a strict timeline. The cloud-based human capital innovation applicationswould thus help in decreasing employee turnover rates, increasing and understanding employee diversity, increasing rehiring of previous employees, and attracting the best talents from the labor market.

Benefits of solving the problem

In the course of recent decades, the part of HR has confronted various weights and subsequently is quickly evolving. Due to this, the part of HR is relied upon to give customary operational and staff benefits too suspect, react to particular, and key business needs. As of now, there is a major test that human asset proficient face and that is the test of addressing business needs utilizing an innovation that is as a part of quick change. Cloud-based human capital innovation applications have presented new channels that can help HR experts change HR to be an administration supplier as well as a corporate counsel. By continually adopting cloud-based human capital applications, it will become easier to deal with ongoing personnel issues, eliminate inefficient processes, increase profitability, and improve corporate communications (Taylor&Asburry, 2011).

In the later past, it has turn out to be clear that these common applications have the capability of giving various advantages to all clients that prompts the expansion of business results. Because of this combination, it turns out to be clear that HR offices and IT divisions cannot be isolated any longer in the wake of this innovation that looks to join their capacities to facilitate business needs and operations. Along these lines through these applications organizations will have the capacity to convey better information, increase the value of items and administrations, and in addition be more vital in their business operations. Through these applications and given the way that the innovation is still experiencing significant change then we expect or foresee real changes in administration procedures for ability, hierarchical structure, ways to deal with danger administration, and capital speculation choices (Leavitt, 2009).

From this discernment, it is clear that HCM applications that are cloud-based will help CEOs to select and hold the most skilled representatives. This will be based on the grounds that the information they gather utilizing these applications goes about as a type of insight that empowers the scout to survey a man’s inward ability given their obligations in light of their intrigues, certificates, and skill. In this way cloud-based, human capital innovation gets more adaptability to the business environment that empowers successive development, improvement of portable access, appropriation of basic achievement components, and parity secrecy that will accompany better social procedures (Heisterberg&Verma, 2014).

Business/technical approach

With strategic HR goals aligned with the organization mission and vision, Maersk is likely to succeed. This is supported by Mohammed, Bhatti, Jariko and Zehri (2011)when they argue that human resources are the resources in delivering organizational services. This training and development programs would help the organization with plans to meet current and future human resource needs in order to succeed. Strategic human resource management helps in ensuring that human resource management decisions support the organization’s future direction, which is ensured by having employees who up to date with the current technology. The cloud-based human capital innovation applications at Maersk should also ensure that the organization keeps up in pace with social, technological, economic, and legislative trends that are linked to human resources so that the organization remains flexible and ready for change if the future is not as expected.

            According to Ali(2013),the cloud-based human capital innovation applicationsshould aid the training and development program to be in such a way that it helps in predicting the future human resource management needs after considering the current human resources of the organization, the labor market, and the future human resource environment the organization will be involved in. It is also through the program that Maersk will be able to effectively analyze human resource management issues that are external to the environment. As noted by AlYahya, Mat and Awadh (2013), a training and development program helps an organization determine where it is headed, the human resource strategies required to help the organization get the planned destination, and the skill sets required for the move.

Business process changes

The cloud-based human capital innovation applications should be concerned with different human resource initiatives including recruitment, talent nurturing, compensation and reward, training and development, and performance management among others. The compensation and reward function would ensure that the organization designs and administers compensation benchmarking as well as competency/ function based compensation strategies. This function should also create benefit programs that attract and make employees committed to their jobs. This package includes salaries, vouchers, bonuses, medical insurance, life assurance, commission, dental plans, company cars, profit sharing, and pensions among others. Through the cloud-based human capital innovation applications, there is right compensation to the right talents at the right time. This implies that employees are assured of adequate compensation for the services they offer to the organization (Alagaraja, 2013), which increases satisfaction decreasing turnover rates. The hard-working employees in this case are rewarded fairly and in an effective manner resulting to motivation and increased performance of the employees. With effective compensation and reward scheme for the company, the cloud-based human capital innovation applications helps in recruiting, retaining, and motivating employees as well as attracting new talents to the organization.

Technology or business practices used to augment the solution

The identified problems at M&M Group would be resolved using the cloud-based human capital innovation applications. It is expected that the cloud-based human capital innovation applications helps managers work together with the employees to monitor, plan, and review the contribution of the employees to the organization. This way, the organization management is able to set objectives for the employees, assess their progress, and provide continuous coaching/ training and feedback so that employees are meeting their career goals. This function is meant to ensure that employees’ effectiveness is promoted and improved. Further, it would be ensured that the jobs are well-designed, there are clear written jobs descriptions, employees are effectively supervised, the employee training and orientation is comprehensive, and the work environment is supportive and positive (Ofori, Sekyere-Abankwa&Brquaye, 2012).

The cloud-based human capital innovation applications should be designed in such a way that it helps in predicting the future human resource management needs after considering the current human resources of the organization, the labor market, and the future human resource environment the organization will be involved in (Bidgoli, 2010). It is also through the program that Maersk will be able to effectively analyze human resource management issues that are external to the environment.

Conclusions and overall recommendations

This program is also a major component for Maersk since it ensures that the organization is able to hire the best talents for any job position in a timely and cost-effective way. The recruitment process according to Anyadike (2013) involves analysis of the job requirements, attracting the right talents for the identified position, screening the probable candidates, hiring the best candidate, and integrating the hired employee to the position and to the entire organization. Training and development on the other hand is noted as a function that betters the performance of individual employees to ensure increased productivity of the organization. Talent nurturing is also an important function for training and development programs and is meant to ensure that the organization has the best talents and these talents are retained in the organization.                    

The reactions of the employees should be positive for the program to be regarded successful. The employees involved in the training and development program should also prove that they have learned what was required as evidenced through their behavior in the work place. The organization-level results would also evaluate the program (Bidgoli, 2010). With reduced turnover rates and increased retention as well as attraction of the top talents from the top market, it would be evident that the program is effective. 

High-level implementation plan

After the HR issues faced in the organization are identified and the            learning objectives set, the next step would be the training program of few selected senior employees in the organization to test the planned training and development program that should be applicable to all the employees. The next step would be the implementation process as the tested program is employed in the entire organization. The implementation process would start with identification of the implementation team. This would be done with a project team comprising or organization members as well as the external aid of experts in the field. Maersk would hire the help of a HR personnel expert who would help in implementing the training and development program. He would help to ensure that the learning needs of each employee are identified and addressed appropriately. He would also foresee arrangement of how employees would get time off work to get into formal education to improve their skills and match with advancing technology. The expert would work closely with the HR team selected from the company.    

Summary of project

Notwithstanding the way that the appropriation of this innovation has its merits, it is essential to guarantee that the procedure of reception is the right one to forestall future difficulties. In addition, it is important to note that the use of these applications will help the senior managers, suppliers, customers, and general employees to experience a better business atmosphere because these applications will help to make service delivery easier. Employees will also have more time to do other chores, as their workloads will be reduced. This in turn will lead to increased business efficiency. Employees would be satisfied with their responsibilities and this increases retention of existing and attracting of new talents, which is beneficial to the company. 

 

 

References

Alagaraja, M. (2013). The strategic value and transaction effectiveness of HRD: A qualitative study of internal customer perspectives. European Journal of Training and Development, 37(50, 436-453.

Ali, A. (2013). Significance of human resource management in organizations: Linking global practices with local perspective. Journal of Arts, Science & Commerce, IV(1), 78-87.

AlYahya, M. S., Mat, N. B., &Awadh, A. M. (2013). Review of theory of human resources development training (learning) participation. Journal of WEI Business and Economics, 2(1), 47-58.  

Anyadike, N. (2013). Human resource planning and employee productivity in Nigeria public organization.Global Journal of Human Resource Management, 1(4), 56-68.

Bidgoli, H. (2010). The handbook of technology management. Hoboken, N.J: John Wiley & Sons.

Heisterberg, R. J., &Verma, A. (2014).Creating business agility: How convergence of cloud, social, mobile, video, and big data enables competitive advantage. New Jersey: Wiley.

Leavitt, N. (2009). Is Cloud Computing really ready for prime time?Retrieved from http://www.hh.se/download/18.70cf2e49129168da0158000123279/1341267677241/8+Is+Cloud+Computing+Ready.pdf.

Mohammed, J., Bhatti, M. K., Jariko, G. A., &Zehri, A. W. (2011). Importance of human resource investment for organizations and economy: A critical analysis. Journal of Managerial Sciences, VII(1), 127-133.

Ofori, D. F., Sekyere-Abankwa, V., &Brquaye, D. B. (2012). Perceptions of the human resource management function among professionals: A Ghanaian study. International Journal of Business and Management, 7(5), 159-178.

Taylor, J., &Asburry, L. (2011).How Cloud-Based human capital management can impact business results.Retrieved from http://thecloud.appirio.com/rs/appirio/images/Appirio_Cloud-Based_HCM_White_Paper.pdf.

 

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The Federal Government and private businesses

 

 

The federal government is allowed by the constitution amendments to help private businesses and especially big corporations that have a great impact on the economy. This is because if these corporations file for bankruptcy and they are not saved, great loss to the economy would be reported. For instance, the employees would lose their job which is detrimental to the organization as more tax earnings would be lost. These are the taxes that are paid to the government from income taxes by the employees. The same loss is realized when the corporation is lost and thus it closes down. The government would lose the enormous amounts of taxes it gets from the business. It is therefore constitutional that the federal government uses federal budget to help private businesses that have filed for bankruptcy protection from their creditors(Wright, 2010). This is to ensure that the businesses are able to pick up.

However, it is not constitutional for the executive branch to buy shares of private company using the federal budget. This is to avoid control of the company by the executive branch and prevent the private business from pursuing its interests. The executive can use the federal government to help private businesses expand and grow but not to buy their shares. It is not allowed that the executive branch would invest in private businesses through buying shares and thus control their normal functioning. Nevertheless, the executive can use the federal budget to help big corporations that declare bankruptcy (Wright, 2010). However, this is done after thorough investigation to ensure that the corporations contributed much to the country’s economy and there is a probability of them picking up and paying back the offered loans.

 

 

Reference

Wright, J. W. (2010). The New York times ... almanac.New York: Penguin Group.

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E- Commerce

Electronic commerce is commonly referred to as e-commerce. E-commerce entails the buying and selling of products or services over electronic systems as opposed to physical services (Turban et al., 2009). These electronic systems usually are the internet and other computer networks that a company is affiliated with. Various technologies have helped with the advancement of e-commerce. These technologies include mobile commerce, electronic funds transfer, internet marketing, electronic data interchange, and automated data collection systems among others. The modern e-commerce makes use of the World Wide Web in most of its transactions. This type of business conduct has helped transform the sales aspect of e-business. It has become a very effective and efficient way for companies to communicate and interact with their customers globally through the internet and thus increase the sales of the company.

Much as it is more effective in improving the sales of an organization, e-commerce is very broad in providing advantages to an organization. It does not simply entail the buying and selling of goods and services. E-commerce has enabled organizations to offer services to their customers, collaborate with the existing and potential business partners, and also the conduction of electronic transactions within the company. An e-commerce framework includes five support areas for EC applications that include people, public policy, marketing and advertising, support services, and business partnerships (Turban et al., 2009). One of the fastest upcoming e-commerce platforms is the social network. Social networks have helped transform the communication in organizations. Through the various internet applications, social networks have been able to connect friends and business partners globally through various tools such as e-mails.

Many firms can benefit greatly through the use of the social network service (SNS) to interact more freely with its customers and investors. Through this service, the company will be able to provide an inline space that will provide basic communication and support tools for their customers and investors to interact with the company.

The main strategy for this business concept is to improve the customer and investor interactions of firms through the use of the social networking services. This will provide a baseline for an increase in sales through the increased customer outreach globally and not just in Australia. The customers and investors will be able to exchange information with organization’s customer service team regarding any orders, inquiries or payment services. The existing and potential investors will also get the chance to know the plans and progress of the company’s initiatives through the exchange of emails and newsletters on the company’s website.  The company website will provide each user with an online page. The user will be able to view the various products and services offered by the company when logged in to his or her profile page. It is through this account that orders can also be placed, payments done or any inquiries made through emails or instant messaging with the customer service team.

The social networking service platform integration in the company’s website shall also allow the users to interact with each other online. They shall be able to view the reviews of other customers regarding the various products and services offered by an organization. The exchange of such views by way of comments and suggestions will be beneficial to the company since it will act both as a marketing tool and as a customer feedback platform. These online social interactions will help expose the customers to the new product and service offers by the organizations. This will increase the hit rates in search engines and as a result market the company’s services and products more efficiently. This platform will thus reduce the costs that the company would have otherwise invested in for the purpose of advertising on other pages online.

            With the introduction of the ecommerce services, the company seeks to improve on marketing department and push for more sales of the products. This will be made possible by e-commerce business tools, which will help deliver incremental sales via the new online channels. These online channels will be a result of the improved customer interactions through user profiles provided in the website.

The e-commerce will be of great economic benefit  in the incremental revenue stream. With the introduction of e-commerce, it is expected that the revenue stream will increase and grow by a substantial amount. As a result of this, the company’s profit growth targets will be met and hence sustain the competitiveness in the market. Through the use of online platforms and social network sites integrations, this new online strategy shall be able to create more traffic to an  organizations website, this shall result in creation of awareness on the company products as well as an increased customer loyalty base. The company shall be able to make long-term acquisition and retaining of customers as opposed to quick wins such as spontaneous buyers.

There are a number of economic benefits that will result from the online marketing of a company. One of the key areas will be the realization of low marginal costs by the company. The online marketing will also help increase the traffic to the company’s website (Enders et al., 2009). This will enable a firm to gain a huge percentage of the market share with the increased customer satisfaction. It is averaged that the satisfied customers usually spend 15% more p.a. than the customer who is not satisfied. This will be of great advantage to the company.

The benefits of these e-commerce spot acquisitions will see to it that the company purchases infrastructure at low point in market hence helping with the reduction of the development costs incurred. These benefits will be reaped in terms of the process, people and technology. This will help reduce the brand and financial risks of the company. The company will also be able to benefit through the purchasing of proven quality solutions to its marketing issues in the form of e-commerce technological tools. This is a more efficient way instead of reinventing the wheel, hence allowing the time and costs that would have been incurred to be focused on quality executions of the company’s existing products and services.

The e-commerce for a firm seeks to improve its efficiency and effectiveness in delivering the demands of its customers through the use of social networking. In order for this dream to be achieved by this company, it is important that proper detailing is done in the implementation of the key e-commerce support elements. Elements such as online security, electronic payments, processing of orders, and customer service are important in the maintenance of proper and efficient platforms for a firm’s online portal. This will enable the customers trust the company with their funds in the electronic transfers and as a result, the increased sales of the company’s products will be realized. The e-commerce platform will see to it that a firm is able to understand its customers better, thus resulting in effective responses and relations with its customers. While engaging in the E-Commerce, security measures should be stepped up. Although there exist a great opportunity in the electronic commerce, security remains a concern, thus, the government should establish laws to curb cybercrime. Cybercrime threatens the future and growth of E-Commerce across the globe.

 

 

References

Turban, E, Lee, J K, King, D, Liang, TP, & Turban, D. (2009). Electronic commerce 2010. London: Prentice Hall Press.

Enders, A, Hungenberg, ., Denker, HP, & Mauch, S. ( 2008). The long tail of social networking: Revenue models of social networking sites. European Management Journal, 26(3), 199-211.