After our recent lecture on social enterprises and non-profit organization, where we looked briefly into micro-financing organizations, I was curious to find out more about micro-financing. After reading the article “The ugly underbelly of Micro finance” from the newspaper Times of India I got a negative view regarding micro-financing firms.

Micro-financing allows loans to be borrowed at minimal interest rates, which the conventional banks do not offer, making it affordable for the poor people to borrow money in order to start any kind of businesses.

In the recent years though, micro-finance has come under lots of criticism. People associated with this sector feel that microfinance institutions have exploited them with high interest rates, same as those charged by any banks moneylenders”. Some institutions, while offering loans often quote “flat” rates of interest, which, implies that even after the borrower has paid a few installments, the interest would still be calculated on the initial sum borrowed, and not on the balance loan amount. Eventually, the final interest rate turns out to be much higher than what was initially given at.

Thus, I urge people to think over twice before borrowing  from such organizations as it is high likely that they might end up paying more interest than they would have had, if they had borrowed from a normal bank.

Reference – http://timesofindia.indiatimes.com/business/india-business/The-ugly-underbelly-of-Microfinance/articleshow/6766589.cms

Every entrepreneur should have some key qualities as well as some qualities which differentiates him from other entrepreneurs. The article ” For entrepreneurs, timing is everything” written by Mark Evans in the Globe and Mail talks about the extreme essence of timing for any entrepreneur.

An Entrepreneur is a person who organizes or makes a business, usually with both initiative and risk. He is the person who decides how the business would run, the business’s structure and design, and the culture of the company. As he is the ‘main boss’ of the company, he ought to be disciplined, calm and risk tolerant.

In the article, Evans talks about his entrepreneur friend reply’s and reasoning, when he asked his friend about the starting of his own law firm. Evans argues that he could have started his own firm long time back. To this his entrepreneur friend replies that the timing was not right for him then to start his own business then, as he was incapable to make the commitment which involved a degree of risk.

Another essential quality that every entrepreneur should have is that, they have to be able to take decisions at crucial moments. After all, it is his company, so he is the one who has to always take the final call.

Reference – http://www.theglobeandmail.com/report-on-business/small-business/for-entrepreneurs-timing-is-everything/article2224284/

I read an interesting blog of my friend Amandeep Singh, which talks about Coca-Cola changing its can color from its traditional red to white. This was done to draw attention to the recent issues regarding the survival of the polar bears. Coca-Cola has also to make various donations to the WWF in the coming years and help them in their various environmental campaigns regarding the protection of the polar bears Arctic habitat.

I totally agree with Amandeep, who calls this a “cleverly designed strategy” by Coca-Cola Ltd. in order to promote and advertise its cans more. This will also act as a product differentiation strategy as its main competitor Pepsi has not yet come with any such strategy. The customers will psychologically be more loyal to Coca-Cola and therefore buy its product, as this way they will feel that , they are also contributing (indirectly) to Coca-Cola’s quest of saving the polar bears habitat.

Therefore, I believe with the high amount of competition faced by every business it is extremely essential for businesses nowadays to be involved into such environmentally related activities like, “Go-green”, or “Save the Earth” campaigns. This not only brings huge customer loyalty but also gives the company competitive advantage over its competitors.

Reference –  https://blogs.ubc.ca/amandeep/

–  http://www.bizjournals.com/atlanta/news/2011/10/25/coke-cans-going-white-for-a-cause.html

Recently, while I was reading a supplement to The Wall Street Journal I encountered an interesting article titled, “The Ultimate Social Business Model”. It was based on the concept of the Direct Selling model.  It mainly talks about the advantages of such a model.

Direct Selling is the marketing and selling of products directly to customers, instead of selling it through intermediaries. Dell has been practicing this method since a long time. According to the article, a company require two things to successfully do direct selling : a social network and a good product to sell.

However, I feel the most important advantage of direct selling is the fact that the products are not sold alongside those of the competitors. Moreover, all the sales process is under the control of the company itself. Thus there is no need to share the profit margins and involve in price negotiations with the retailers or the distributors.

It is however extremely important for a company to keep few things in mind before deciding to get into direct selling. Companies should do a thorough market research and should have sufficient resources and expertise to sell direct. Otherwise, such a selling method may go for a hit…

References –

http://www.businessforhome.org/wp-content/uploads/DSN_WSJ_book.pdf

http://tutor2u.net/business/marketing/distribution_direct.asp