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

With reference to Gill Corkindale’s blog, I will write on the importance of having an organizational design and structure according to the culture of the company. I agree with her idea that as organizational strategy changes, structures, functions and roles should be realigned with the new objectives.

Organization design and structure has become so crucial that it dictates how people function in any business, thus directly affecting the functioning of the company. However, more often than not, organizations either overlook the importance of importance of organizational design or simply don’t know what to do. An outdated and improper structure can lead to ambiguity and commotion inside a business therefore breaking down co-ordination, decision making processes in the business. Moreover, it can lead to huge conflicts between managers, employees and the other shareholders of the company. Such problems would furthermore reduce the company’s strengths and hamper its opportunities to develop.

Therefore, it is imperative for the managers or the CEO’s of any company to search for the right combination of its structure and design that would suit their company. A good structure and design will lead to an improvement in communication, increase output and productivity of its employees and most importantly make all the shareholders happy.

Reference – http://blogs.hbr.org/corkindale/2011/02/the_importance_of_organization.html

Image Ref –  http://www.mainstconsulting.com/graphics/organization-design-gfx.jpg

Recently, I read Clarisse Ong‘s blog regarding the survival of small business in today’s world. I agree with her idea that during the time of economic recession or slow economic growth, it is extremely difficult for small businesses to enter the market and prosper in it.

I strongly agree with the fact that small business will have limited cash flow at the time of its start up. Moreover, at the time of slow economic expansion, rivalry increases and intensifies making it extremely difficult for new businesses to enter the market. Furthermore, a slow economy would mean that people would have less dispensable income to be used in buying products. This in turn, will lower the sales of the businesses.

According to the Craig Alexander, the chief economist and senior VP of TD Bank, small businesses should have realistic expectations and be flexible to adjust with the changing economic climate in order to succeed at the times of economic uncertainty.

However, I feel the most important factor for any businesses survival in today’s market, be it, during economic growth or economic uncertainty, is how well a business conducts market research and industry analysis. With good and thorough market research every business has an opportunity to survive and do well in the market.

References  – https://blogs.ubc.ca/clarisseong/

– http://business.financialpost.com/2011/10/13/will-small-business-continue-to-prosper/

Tata Nano, is currently the cheapest car in the world at 100,000 Indian Rupees, equivalent to 2,000 CAD. If Tata Nano comes to North America though, the cost would be slightly higher due to some redesigning needed to meet the emission and crash standards. In addition, there would be high charges for transporting the cars to North America.

I think it would provide excellent competition to other low cost cars in the region.  At a time of Financial Meltdowns around the world, people would most definitely want to reduce their expenditures in any ways possible. So, a cheap car, with good safety measures would be an ideal car for many people.  Furthermore, tata nano has a 4.8L/100km fuel efficiency with low carbon dioxide emissions.

If we consider the fact that, the cheapest retail car in Canada is for around $ 10,000, why will people not buy a car that is at least three times its cheaper? There might be a different view amongst some that people in these regions usually prefer big cars, but maintaining such cars turn out to be quite expensive. Moreover, with such soaring prices of gasoline, a fuel efficient car will greatly improve your savings.

I feel if CEO of Tata Motors decides to enter the car market here, he will surely make people think about investing on cars in the years to come.

Every market is today’s world is so vast with so innumerable competitors, that it becomes imperative for any business to identify and target a particular sector of the market. To do that, a business has to first segment the market.  Once the segmentation is done, a business would target a specific group of consumers who are “most likely” to buy their products and services.

Let us look at the car manufacturing industry for instance. The high competition present in such an industry implies to the fact that it is very important for every company to have a target market, in order to have a comparative advantage over its competitors. For example, Mercedes-Benz targets the high income sector of the society, while Toyota targets the lower middle class with lesser disposable income. Suppose, if Mercedes-Benz decides to sell its cars in a country like Somalia at its normal high prices, it will not be able to incur high (or rather any) sales. Toyota, on the other hand would be much better off selling its cars in such a country.

Therefore, it is very important for any business to identify its target market and sell accordingly in those markets.

While the whole world is grieving on the death of Apple’s co-founder Steve Jobs, let us pay tribute to some of his skills which made him special around the world.                             The media has always symbolized Steve Jobs for his impact on Apple. Under his supervision, the company became a master brand and increased sales significantly with the introduction of iMac and the iPod.  Further in June 2007, Apple entered the cellular industry with the introduction of the iPhone.

Jobs always took personal responsibility for what Apple makes and how these products would feel to the user. He was responsible for directing the design processes of the products from start to end, asking innumerable questions, thereby pushing the production unit towards manufacturing more useful, efficient and better products. The decisions that most companies would consider finishing touches, like the look of a hinge, the sound a product makes when it is opened or shut, the color of a products case – were to Jobs, the extreme core of the designing process at Apple.

With his death, the world has truly lost a visionary, a person who, as President Obama puts it “bold enough to believe he could change the world”.

References – http://www.inc.com/magazine/20040401/25jobs.html                                                           http://www.whitehouse.gov/blog/2011/10/05/president-obama-passing-steve-                     jobs-he-changed-way-each-us-sees-world