My company is lays

My company is lays My company is lays FRITO LAYS I am SUBODH KUMAR, owner of FRITO LIMITED, which produces lays. My company was started with a capital of 2 crore on 12th Dec, 2009. The main product of my company is lays. My company also produces other products like energy drinks, popcorns, frosties, chips, etc.But the main product is lays. The name of my corn flakes is FRITO lays .I chose lays because lays are regularly used by people of all age groups in all seasons and the market of lays is high throughout the year. The idea came into mind when I saw a child who did not want to eat that because he did not find it tasty and I decided to make something tasty for all. And the idea worked. I succeeded in making my own cornflakes. Frito lays are made of. Frito lays comes in two sizes the Family Jumbo size, and in the small size, just enough for one person. The Jumbo packets have masks of animals as cutouts, and kids love to have them. The ad is targeted at mothers who are finally going to buy the product which is meant for family consumption. Kids are surely going to demand it,. Ingredients The main ingredients of FRITO LAYS are: EDIBLE VEGITABLE OIL, SPICES, ONION AND CHILLY POWER, CORIADER POWDER, SALT, GINGER POWDER, BLACK PAPER POWDER, TERMARIC POWDER, SALT, AND TARTERIC ACID VARIOUS FLAVOURS: There are various flavours of NUTRILLES corn flakes. NUTRILLES Banana Bite. Delicious strawberries. Mango mania. Chocoleceous Chocà ³s Musculaceous Frostiest for fun. Each one has a distinctive taste to invite Young and Grey to morning taste buds and in a mix, its a jingle to top up with Tropicana fruit mixes for a great Nutritious head start for the day. The best part of lays has always been that it has been a brand ambassador for Fat Free Food which has gone in a big way to reduce FP Ratio. We all know that the Indians have lost the key to healthy living (Healthy Diet and active Lifestyle) because we can never control our Gastronomic desires after reading so many Foodie revs from the likes of Giyani, Karvy and Cowy. Healthy diet means Carbo, Proteins bla bla bla and near to zero Fat and near to zero Sugar. Do we have to remember all this when lays takes care of every nutritive fact on its cover less glossy than Star dust ,but more attractive and more Crispy which makes it the First company in the world to declare its Fat and Sugar levels. Wholesome Facts-Thought for food For all those who think that you should eat like Kings for BF, Lunch and Dinner and those who think that you should starve like Beggars to break weight, healthy BF is the most important way of getting adequate Energy and Nutrition which can be had by wholesome grains and wholesome diet. Complete planned food as per MY PYRAMID means the right combination of Grains-Non refined whole potato, brown rice preferably and refined white rice, wheat or bread if not. Vegetables-Dark Green orange, starchy Vegetables, Peas and Beans. Typically, a NUTRILLES cereal with milk fulfils a major part of BF but will not be complete without Fruits or 100% fruit..It will be no understatement to say that lays contain rich amounts of Carbohydrates, Proteins, Sodium, Potassium, Vitamins, Fibre and an amazing 0.3 grams of Fat only in a bowl full. lays 100 years of commitment to Nutrition can be found in every product that it manufactures and innovates and deserves rich place in the History of Processed Foods. CURRENT SITUATION: MARKET ANALYSIS: MARKET SIZE: The market size of my is large. But it can be changed according to the market demand by changing the price of the Lays. My objective will be to increase the market share of my product. I will develop strategies accordingly. There is considerable competition in the market for my product but as I have developed an all new product in which I have catered all age groups like children ,young, and aged people. So obviously the market size of my product is considerably large. But there are a large numbers of competitors in the market which are threats to my company. For that I have formulated effective strategies to curb their competitive strategies. There is only one big competitor of my company that is a big name in itself uncle chips, that produces a variety of products in this range. PORTERS FIVE FORCES ANALYSIS: Porters 5 forces analysis is a framework for the industry analysis andbusiness strategy development developed by Michael E. Porter of Harvard Business School in 1979. It uses concepts developed in Industrial Organization (IO) economics to derive 5 forces that determine the competitive intensity and therefore attractiveness of a market. 1) The threats of substitute products:- the existence of substitutes lays can be the threats. If I increase price of my productpeople will shift to other substitutes. Also if the competitors decrease the the price ofsubstitutes lays it can also can affect the behaviour of consumer, because the consumer is rational. buyer propensity to substitute relative price performance of substitutes buyer switching costs perceived level of product differentiation 1. The threat of entry of new competitors:-It is also possible that new competitors may enter into the market because it is an ever increasing market that will go for ever. Profitabilitymarket increases the producers or competitors and competition arise so profitability decreases. The existence of barriers to entry (patents, rights,etc.) economies of product differences brand equity 2) The intensity of competitive rivalry:- This is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc.I will try to bring new innovations in my product to survive in the market. number of competitors rate of industry growth intermittent industry overcapacity exit barriers 4) The bargaining power of customers The bargaining power of the customers does matter a lot. The ability of customers to put the firm under pressureaffects the customers sensitivity to price changes. buyer concentration to firm concentration ratio bargaining leverage, particularly in industries with high fixed costs buyer volume buyer switching costs relative to firm switching costs buyer information availability 3)The bargaining power of suppliers Suppliers of raw materials, components, and services (such as expertise) to the firm can be a source of power over the firm. Suppliers may refuse to work with the firm, or e.g. charge excessively high prices for unique resources. supplier switching costs relative to firm switching costs degree of differentiation of inputs presence of substitute inputs These factors are likely to affect my company and I will have to accept to their conditions. MARKET SEGMENTATION: I have segmented the market on various basis like: 1) AGE :I made the segmentation on the basis of age. For kids there are various flavours and attractive shapes of the lays. For young there is weight losers that can decrease weight within 15 days. For middle age people there is another kind that keeps them strong and contains anti ageing substances. 2) INCOME:I have segmented the market on the basis of income so every class of society gets benefit from my product. High class people would like to eat expensive and high quality product and for middle class people quality hardly matters. laysbets on localisation to beat others ORIGINAL lays maker Frito has begun exploring new formats of cereal consumption, category segmentation and localisation, with Quaker, HULs Amaze and Nestlà ©s Cerevita beginning to occupy space in the Rs 250-crore small but rapidly growing Your browser may not support display of this image.breakfast cereal market. FRITO Your browser may not support display of this image.India is also in the process of rolling out its relaunched muesli Your browser may not support display of this image.brand Extra and plans capacity expansion at its current plants. Declining to divulge specific expansion plans, Mr Dutta said: We are exploring new formats and expanding the number of offerings. But we wont veer away too much from cereals as it remains our core competence. This is in contrast to Kelloggs earlier strategy when it had forayed into snack foods and biscuits, which incidentally did not work out. Forthcoming expansion plans would include identifying gaps in healthy food consumption and segmenting the ready-to-eat cereal category, a recent example being that of Special weight-a weight management cereal aimed at women and also Frito biggest brand. Your browser may not support display of this image. By volumes, lays remain Frito biggest Your browser may not support display of this image.brand in India, followed by Chocà ³s. Its muesli, available as Just Right in Your browser may not support display of this image.India previously, has now been rebranded extra. FRITO Your browser may not support display of this image.India experiments with localisation are now paying off, with localised variants Your browser may not support display of this image.such as mango and honey and the low-priced K Pack bringing in volumes. The Indian subsidiary is now among the fastest growing markets for the $12-billion based FRITOthough its contribution to the companys global sales remains marginal. My Your browser may not support display of this image.fast-food cereal maker is exporting to other countries in the sub-continent Your browser may not support display of this image.such as Nepal, Sri Lanka, Bangladesh and Bhutan. CURRENT SITUATION: 1) Financial position:- The financial position of my company is good. I have enough funds to compete in market .My company has good financial record. The assets of the company are greater than liabilities that show the company is in good position. The company is earning increased amounts of profit. 2) Skills:- In my company, educated and qualified staff or people are there, who have best abilities and skills. Who have new ideas to compete in market? 3)Time:- In my company there is flexibility in timings. Work occurs in three shifts .This makes the employees feel comfortable at work. 4)People:- In my company FRITO people are Divided into 3 management level. Top level management, consists of managers who make strategies, take decisions andimplement them in company. Middle level management: there aremanagers who follow the order of top level managers and control on lower level management. In lower levelmanagement: there are supervisors and labour. Objectives of FRITO LIMITED: 1) Financial objective: To make the best financial plan. Earn net profit nearly Rs. 1 crore lakh per year. Every year reduce losses nearly 10%. Make reserve surplus nearly 5% per year. 1. Marketing objective: these are following: Introduce a product that all sections of people like and get benefit from it. Capture as many customers as I can get from all sections of society. My objectives will be that the customers are satisfied by my product and they become loyal to my product. My objective will be to increase the sales of the companyand for that I will adopt various strategies like good promotion like advertisements,newspapers,hoardings,brochures,etc. 2. Long term objective: These are following: To make a strongposition in the market for long term. Provide best possible services to the people. To introducenew and nutritious products in market. To forecast the coming challenges of competition in market. Currentsituation: Macro Environment: 1) Economic environment:- The economic conditions of the country affects the sale of a product. The available purchasing power in an economy depends on current income, prices, savings, and debt and credit availability. We must pay careful attention to trends affecting purchasing power, because they have a strong impact on business. If the per capita real income of the country is low then the people will switch to other cheap products in the fastfood.However the high class people will switch to my product. That is why I have segmented the market on the basis of income .I have made lays for various income classes.Various prices of the product are available. 2) Social-cultural environment:- Society shapes the beliefs, values and norms largely defines consumer taste and preferences. This environment directly affects my companys product through consumers taste. 3)Technological environment:- Technology shapes the future of any society. I must constantly watch changes in technology for keeping track of competition and customer wants. It plays an important role in determining the type and quality of goods and services to be produced and the type of plant and equipment to be used. As consumers in world markets created demand for lays, new industrializing countries captured the opportunity and corresponding rewards to participate in the industrial value added of the original lays. These countries were able to participate in the $1.40 of industrial value added reward resulting in the transformation of the required 10 cents of lays to produce the $1.50 box of Frito lays. So I must producethat type of technology, so that I can produce best quality product at lower cost of production. 4) Political-legal environment:- The political environment has a major effect on the way financial services industry carries out their business. Parliament passes out legislation to these organisations who then apply it to business in the financial sector which influence the way they go about their business. The three main forces within the political environment are National and Local government, the EU and different regulatory bodies. These regulatory bodies approach to the supervision of those it regulates will be to apply these principles, other rules, laws, government agencies and pressure groups that influence and limit various organizations and individuals. Consumer behaviour:- It is the study of how individuals, groups and organisations select, buy, use dispose of goods, services, ideas or experiences to satisfy their needs and wants. We study of consumer by following ways: o Demographics:-In this we divide consumer on the basis of variables such as age, family size, gender, income, occupation, education, religion, race, generation, nationality social class. For example I have divided the consumers on the basis of income, age,family size. For example on the basis of family size I have made jumbo packs, family packs. Psychographics:- In this we assess consumers at mental level to determine choices for buying the products. This process includes motivation, perception, learning, beliefs attitudes. Motivation:- It refers to way in which urges, drivers, desires, aspiration, needs direct, control or explain the behaviour of human beings. Motivation has close relationship with consumer behaviour. So with the help of motivation we can calculate the consumer feelings for the product. By the help of effective advertisements I will try to motivate the customers to buy my product. Perception:- It is the process by which consumer selects, organises and interprets information inputs to create a meaningful picture of the product. By the help of advertisements and influential brand ambassadors we can make the customers perceive good about our products. Learning:- It includes changes in our behaviour arising from experience. Most human behaviour is learned, although much learning is incidental. I will try to see how customers have previously responded to the products and how they have reacted to them after buying them once.. Nature of buying decision:-Buying decision includes how the customer evaluates various alternatives to buy the product. It includes various steps like : 1) Problem recognition:- In this the customers see where from the need has risen or the product. Need can arise from various sources like family friends. The need for my product i.e. lays can arise when some friend who is also using my product tells u about it or recommends it for your children. Problem recognition is that result when there is a difference between ones desired state and ones actual state. Consumers are motivated to address this discrepancy and therefore they commence the buying process. Sources of problem recognition include: An item is out of stock Dissatisfaction with a current product or service Consumer needs and wants Related products/purchases Marketer-induced New products The relevant internal psychological process that is associated with problem recognition is motivation. A motive is a factor that compels action. 2) Information search:- Once the consumer has recognised a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search. Sources of information include: Personal sources Commercial sources Public sources Personal experience The relevant internal psychological process that is associated with information search is perception. Perception is defined as the process by which an individual receives, selects, organises, and interprets information to create a meaningful picture of the world 1. Information evaluation: After the customers search the information about the product they will evaluate various alternatives. At this time the consumer compares the brands and products that are in their evoked set. How can the marketing organization increase the likelihood that their brand is part of the consumers evoked (consideration) set? Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. The marketing organization needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision. 2. Purchase decision:- Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organization must facilitate the consumer to act on their purchase intention. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration. 3. Post purchase evaluation:- I will have to check out whether the customers go repurchase or not. After the purchase consumer might like to rationalise the purchase decision. The consumer would go for post-purchases action and uses of products. Post-purchase satisfaction is the function of trade off between the expectation and the performance achieved. Summary of situation analysis ofFRITO LAYS LIMITED. Internal strengths:- The main strength of my product is that it tastes so good, a quick and easy eat on the run food. There are a lot of flavors,lots of crabs. It is cheaper than any other nutrition bar out there .The main strength of my company is quality new innovations in products. The product that is lays meets the requirement i.e. a light and fast food. The main feature of my product is that it is very nutritious and it is manufactured in such a way that it is pure in quality. The strength of my company is that there are a range of flavours in the lays that suits every persons taste. Internal weakness:-The Companys weakness is that the lays industry is becoming more stagnant and there has been a little room for growth. EXTERNAL OPPORTUNITIES:- The main opportunities to my company is that the main competitor UNCLE price is very high and people in India rarely buy that .So I have introduced the different prices for different classes of people. This is the main competitive advantage of my product over other companies. External threats:-The main threat to my company is UNCLE that is the main competitor in INDIA. But in this regard I have adopted certain strategies like I launch products that are traditional in taste so that people like my product. The threats are also from other products that can be used as substitutes. Marketing Research Steps: Marketing Research Approach Once your problem is better defined, you can move onto developing marketing research approach, which will generally be around a defined set of objectives. Clear objectives developed will lend themselves to better marketing research approach development. Developing your approach should consist of honestly assessing you and your teams market research skills, establishing a budget, understanding your environment and its influencing factors, developing an analysis model, and formulating hypotheses. Overall Theory of the Marketing Research Approach What is your overall theory and hypothesis? What do you intend to prove or disprove? What actions are your company willing to take based upon survey results? What are the internal/external roadblocks that will need to be overcome to drive results? Marketing Research Design: I designed the market research in a very effective manner. One thousand consumers were asked a series of questions about the FRITO brands and were shown some initial designs. In particular, the researchers wanted information about the impact of the designs on the shelf, the ease of recognition and the clarity of the brand name and product. The results of the market research confirmed that one design led the field. It highlights the N logo, .. The big advantage of using the N logo was that it was a protectable brand image. Other competitors would not be able to imitate it. Having decided on the new corporate brand icon, the designers had to incorporate it into the design of the packaging for all 29 individual brands. The latest computer technology was used to digitally generate the artwork and the familiar characters such as Snap, Crackle and Pop, Captain Rik and Tony the Tiger were re-drawn in a more modern style. For each product the image was designed to wrap around the box and each side, including the bottom have also been given a strong branded look. The only part of the old design to be kept was the nutritional information, which had itself been re-designed in 1998 and had even received recognition from the Plain English Campaign for the clarity of its explanations. This had already proved to be very consumer friendly and a big success so it was simply incorporated into the new design. It was essential not to alienate consumers with radical new designs and it was important to maintain the individuality of each brand. This is known as the brand equity and means the value of a brand that has been built up over a number of years. Frostiest, for example, keep Tony the Tiger, the familiar blue background and typeface, while FRITO still radiates sunshine and keeps the red and green cockerel. Although the changes in the corporate image were quite radical, the designs of the individual brands retained enough elements to be instantly reco gnisable. Based upon a well-defined approach, a framework for the designing your marketing research design should be apparent. Marketing research design is the most encompassing of all steps in the marketing research process, requiring the greatest amount of thought, time and expertise and is the point at which those less experienced with market research will obtain assistance from an internal market research expert or perhaps partner with an external marketing research provider. Marketing Research Data Collection Marketing research data collection (often called survey fielding) is the point at which the finalized questionnaire (survey instrument) is used in gathering information among the chosen sample segments. There are a variety of data collection methodologies to consider. Market research data collection methods: Computer Assisted Telephone Interviewing (CATI) Internet survey Mail survey Mall intercepts Traditional telephone interviewing Internet panel Mail panel In-home panel Survey Data Analysis Any survey data analysis will depend on how the survey questionnaire was constructed. Less complex survey data analysis can be handled with any of a number of office suite tools, while more complex questionnaire data analysis requires dedicated market research analysis programs. Make the decision: After collecting all information, after analyzing, the next and last step is taking decision. This step is based on above informations. The above information was used to take necessary steps to make changes in the product to cope with the changing tastes. Research result:- After the process, of collecting all the information about my product FRITOS . On the basis of this research result, I will take all the decisions of present as well as future. Marketing strategy: Product:- It may be defined as a bundle of utilities consisting of various product features and accompanying services. My marketing strategy with regard to product will be to show the various features of the product: Nutritious value. Hunger erasing value. Longer shelf life. Good taste Different flavours. Product mix:- It refers to all the products offered by a firm. It should be differentiated from the product line, which refers to the group of products which are classified together for reasons of similarities on any one of the several criteria such as customer needs, market served, channed used, or technology used in manufacture. In my company, the product mix refers to the various products offered to the people like corn flakes,popcorn,frosties,biscuits,energy drinks,chips,etc. Product strength:- The main strength of my product is that it tastes so good, a quick and easy breakfast, on the run food. There are a lot of flavors,lots of crabs. It is cheaper than any other nutrition barred out there. The main strength of my company is quality new innovations in products. The product that is cornflakes meets the requirement i.e. a light and nutritious breakfast. The main feature of my product is that it is verynutritious and it is manufactured in such a way that it is pure in quality. The strength of my company is that there are a range of flavours in the LAYS that suits every persons taste. Product weakness:- The companys weakness is that the cornflakes industry is becoming more stagnant and there has been a little room for growth. Product life cycle Your browser may not support display of this image. The product life cycle goes through many phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures; whereas product lifecycle management (PLM) has more to do with managing descriptions and properties of a product through its development and useful life, mainly from a business/engineering point of view. To say that a product has a life cycle is to assert four things: That products have a limited life, Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, Profits rise and fall at different stages of product life cycle, and Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage. The different stages in a product life cycle of my productare: 1. Market introduction stage Cost was high Sales volume was low because people were not aware of the product. No or little competition. Demand has to be created. Customers have to be prompted to try the product. Heavy expenditure on the advertisement to make the people aware of the product. Profits are low in this stage. STRATEGIES IN INTRODUCTION: I visualised the various markets which I could enter because I knew that I could not enter all of them at once. I analysed the profit potential of each product market singly and in combination and decided on a market expansion path. Then I moved the product into another market .I then surprised the competition by developing a second product for another market. I then took the second product to the first market and then launched a third product for the first market. My game plan worked and I served the market with two or three products. 2. Growth stage costs reduced due to economies of scale and Sales volume increases significantly. Profitability. Public awareness. Competition begins to increase with a few new players in establishing market. Prices to maximize market share. STRATEGIES IN GROWTH STAGE:I improves product quality and added new product features and styling. I also entered new market segments. I also increased distribution coverage and entered new distribution channels. Also shifted from product awareness advertising to product preference advertising. I also lowered the prices to attract the new layers of price sensitive buyers. 3. Mature stage Costs are very low as you are well established in market no need for publicity. sales volume peaks increase in competitive offerings prices tend to drop due to the proliferation of competing products brand differentiation, feature diversification, as each player seeks to differentiate from competition with how much product is offered Industrial profits go down. STRATEGIES IN MATURE STAGE: Converting non users. Entering new market segments. Winning competitors customers. Use the product on in new ways. Improve the product. 4. Saturation and decline stage Costs become counter-optimal Sales volume decline or stabilize Prices, profitability diminish Profit becomes more a challenge of production/distribution efficiency than increased sales. STRATEGIES INDECLINE STAGE: I increasedth

Telecity Group Plc Financal Statement Analysis

Submitted in fulfillment of assignment 1 of Financial and Management Accounting course Telecity Group plc Background Founded in 1998 with the establishing of the first data centre in Manchester, Telecity Group plc is operating a carrier-neutral data centre in Europe to support digital economy. It is a combination of TeleCity Limited, Redbus Interhouse Limited and Globix Holdings (UK) Limited. As a leading provider of data centre services, Telecity Group plc is listed in London Stock Exchange.In the meanwhile, it is is a constituent of the FTSE 250, FTSE techMARK 100 and FTSE4 Good indices. Driven by the rapidly increasing of digital economy, Telecity Group has been targeting to build secure, resilient and highly-connected colocation environments for the IT and telecoms equipment, to which customers can outsource their telecoms, web and IT infrastructures. For this purpose, Telecity Goup has launched the demand-driven data expansion programme, which is expanding its data center capaci ty through Europe.This European-based programme is expected to increase customer power capacity, which will in turn bust company economic of scale. Furthermore, as an Information Technology Company, Telecity Group has been highly relying on high and new technology to attract new customers and increase profits. Thus, much effort has been put into company’s ability to innovate new products and services in terms of data accessibility, security and specialty. Focusing on evaluating the implementation of its growth strategy, this paper will analyse it is financial statement base on the basic financial ratios.Ratios Analysis Introduction This section will evaluate Telecity Group plc’s financial ratios in detail. Other than looking at the past and present performance trends of the Group, this essay will also discover the company’s financial performance in comparison to Datacenter industry overall. Consequently, company management team will be able to determine the shor t term forecast of future performance. Furthermore, the analysis in this section can give guidance to investors by providing data and giving realistic view of Telecity Group’s inancial position and comparison to the industry. Profitability Ratios Given the important role profit plays as financing both dividends to shareholders and retained earnings, it is the main measure of financial performance. Figure 1 Profitability Ratios (GPM- Gross profit margin, OPM- Operational profit margin) As can be seen from figure 2, the gross profit was dramatically increased from 52% to 56 % through year 2010, and there was impressively improvement for year 2011.This can be explained by company’s successfully implementation of its growth strategy. On one side, driven by the high demanding of digital economy, the company has been focusing on increasing earnings by expanding data centre capacity and adopting new technology. On the other hand, along with the growth there is high cost. Howe ver, the even higher revenue growth still made the growth of gross profit margin. Operation profit was slightly decrease in year 2011, which implies high administrative costs in 2011. This is mainly because of a total amount of ? ,510,000 provisions respect of certain leases and the acquisition with Data Electronics and UK Grid, the costs of which were accounted in operational exceptional items in consolidated income statement. Figure 2 Profitability Ratios (PreTPM- Pre-tax profit margin, PostTPM- Post-tax profit margin) The pre-tax profit margin has also significantly improved from near 23. 5 % to about 25 % in 2011. One of reasons of this improvement is the gains on foreign exchange. The most important reason should be the write off of costs incurred on refinancing, which was an ? 00m five-year financing agreement with Barclays, HSBC, Lloyds Banking Group and RBS from last year. Unlike PreTMP, post-tax profit margin has dropped impressively to about 17. 6 %. This may be mainly bec ause of the dramatically increment in both current tax and deferred tax. Figure 3 Profitability Ratios (ROCE- Returns on capital employed, ROE- Returns on equity) Figure 3 shows that The Telecity Group’s average ROE is comparable to industry ratio which is 7. 1% up to year 2010. However, in terms of growth, the trend is dramatically going down from 2009, which is despite the fact that both total equity and profit after tax have been improved.However, the growth of profit was not in pace with the equity. In fact, this makes sense when take into account the company’s expansion strategy, which has been being successfully implemented by setting up new data centres across Europe. A big money has been invested in this expansion program, which in turn provided the company high potential turn-over. In general, financial analysts consider return on equity ratios in the 15-20% range as representing attractive levels of investment quality. In this sense, the company’s perf ormance is healthy with regards to efficiency of profitability.ROCE is one of Telecity Group key performance indicator, which is added to evaluate company’s strategy of focusing earnings return from investment. ROCE was decreased during year 2011, which was due to the company’s capacity expansion programme and acquisitions’ effect. Even though, the company’s performance in terms of generating returns is healthy in comparison with industry average rate at about 8%. Liquidity Rations Liquidity ratios are to measure a company's ability to pay off its short-term financial obligations (Atrill and McLaney, 2011).Figure 4 Liquidity Ratios In theory, the higher current ratio is better as it clearly identifies the company’s ability to pay off short debts fund its on-going operations. (Investpedia, 2009) In the case of Telecity Group, its average current ratio shows that the current assets are not able to cover its current liabilities. This is mainly because the company has invested a big money into company’s capacity expansion program and acquisition, which are holding most of company’s capital. However, the average rate is comparable to the industry as a whole at 0. 8. Trade receivable days are healthy between 25 and 40 days over the year from 2009 to 2011, there is even a decrease from 40 days to 35 days in year 2011. This is due to the demanding digital economy market. Financial Gearing Financial gearing happens when business is financed in a way of borrowing (Atrill and McLaney, 2011). The analysis of gearing ratios is to evaluate the business’s level of gearing, which is the key factor of assessing risk. Figure 5 Gearing Rations (D/E- Debts to equity, ND/E- Net debt to equity)Figure 5 shows that gross debt to equity has increased from about 30% to over 60% in year 2011 after a slightly decreasing in year 2010, which indicates Telecity Group is highly geared in 2011. This is because the significantly increase of non-current borrowing for company’s capacity expansion program and the two acquisitions. Net debt to equity is concerned with company cash to repay the borrowings. It has impressively increased to more than 60% as well demonstrating that risk exists at Telecity Group’s failure. Figure 6 Gearing Ratios (IC- Interest covre, NIC- Net interest cover) Interest cover ratio measures the amount of operating profit available to cover interest payable(Atrill and McLaney, 2011)†. As can be seen from figure 6, gross interest cover has fallen from 11 % to 10. 4 % in 2011. In terms of net interest cover which takes into account finance income, the cover ratios were slightly increased. Overall, the figures are showing that Telecity Group has the strong ability to service its debt. Cash flow analysis CFPS is concerned with the company ability of generating cash. Therefore, it is commonly referred by analysts for more accurate measure of a company's financial situation.Figure 7 Cash flow ratios (EPS- Earnings per share) The CFPS has increased from 37 pence in 2009 to 60 pence in 2011. The EPS is averagely higher then CFPS as we would commonly expected. Both EPS and CFPS have increased over the two years. The main reasons for the increase and the difference between CFPS and EP as follows: 1. Movement in foreigner exchange 2. Movement in trade receivables and trade payables 3. Depreciation charge 4. Cost of exceptional items To sum up, the net cash flow from operating activities has significantly improved by 25 % to over ? 120million. Over ? 00 million was spent on investment activities, which include capacity expansion program and acquisition activities. Investment analysis â€Å"Investment ratios are designed to help shareholder to assess the returns on their investment† (Atrill and McLaney, 2011). Earnings per share have risen from 19p to 21p in 2011, which is basically because of the increasing profit margin over the year. Conclusion As can be s een from above, the Telecity Group plc has gone through a stable healthy financial year with regards the implementation of its growth strategy. Telecity Group’s profitability stayed stable and healthy in the near two years.The low profit increment was due to the company’s expansion and acquisition strategy. Given the fact that data centre services is demanding in digital economy, Teleicty Group’s successfully expansion and acquisition will in turn make big returns. Liquidity is poor in terms of ability to cover its current liabilities. However, given the industry ratio being 0. 58, it is comparable healthy in the market. Furthermore, the short trade receivable days imply the high market demands in the data centre industry. Company’s gearing has risen to extremely high level due to its growth strategy.From investor’s perspective, there would be risk of investing in the case of company’s failure. However, take into the consideration of the cha racters of data centre industry, which are demanding the high capacity, connectivity and flexible services, Telecity group are in no way to failure as it has achieved successful implementation of its business across Europe and gained the potential of attracting new contract with exiting as well as new customers. Overall, the Telecity has been seeking the best practise within the data centre industry as a leading provider of premium carrier-neutral data centres.As the result of its successful capacity expansion and acquisitions, the further high turnover is inevitably. Appendix 1 Profitability| Gross Profit Margin| =| Gross Profit/Revenue%| ? | ? | 2009| =| 88,727| /| 169,383| %| =| 52. 4%| 2010| =| 109,773| /| 196,397| %| =| 55. 9%| 2011| =| 134,701| /| 239,818| %| =| 56. 2%| ?| Operating Profit Margin| =| Operating profit/Revenue%| | ? | 2009| ? | 39,102| /| 169,383| %| =| 23. 1%| 2010| =| 55,173| /| 196,397| %| =| 28. 1%| 2011| =| 65,359| /| 239,818| %| =| 27. 3%| ?| Pre-tax profi t Margin| =| Profit before tax/Revenue%| ? | ? | 2009| =| 38120| /| 169,383| %| =| 22. %| 2010| =| 45,941| /| 196,397| %| =| 23. 4%| 2011| =| 59,438| /| 239,818| %| =| 24. 8%| ?| ? | ? | ? | ? | ? | ? | ? | Post-tax profit Margin| =| Profit after tax/Revenue%? | ? | 2009| =| 34722| /| 169,383| %| =| 20. 5%| 2010| =| 38,031| /| 196,397| %| =| 19. 4%| 2011| =| 42,641| /| 239,818| %| =| 17. 8%| | Return on Capital Employed| =| Operating Profit/Total Capital employed| ? | ? | 2009| =| 39,102| /| (80,467+218,931)| %| =| 13. 1%| 2010| =| 55,173| /| (80654+257,545)| %| =| 16. 3%| 2011| =| 65,359| /| (183,451+298,027)| %| =| 13. 6%| | Return on Equity| =| Profit after Tax| /| Equity| %| ? ? | 2009| =| 34722| /| 218,931| %| =| 15. 9%| 2010| =| 38,031| /| 257,545| %| =| 14. 8%| 2011| =| 42,641| /| 298,027| %| =| 14. 3%| Liquidity| Current Ratio| =| current Assets/Current Liabilities | 2009| =| 51,623| /| 82,961| =| 0. 6 | ? | ? | 2010| =| 46,501| /| 82,474| =| 0. 6 | ? | ? | 2011| =| 48,398| /| 103,283| =| 0. 5 | ? | ? | ?| Trade payable days| =| Trade payables/Cost of Revenue*365| 2009| =| 47,089| /| 80,656| *| 365| =| 213days| 2010| =| 47,085| /| 86,624| *| 365| =| 198days | 2011| =| 57,935| /| 105,117| *| 365| =| 201days | ?| Trade receivable days| =| Trade receivable /Revenue? | 009| =| (19,483-6,975)| /| 169,383| *| 365| =| 27days| 2010| =| (22,139-746)| /| 196,397| *| 365| =| 40days| 2011| =| (26,365-3,560)| /| 239,818| *| 365| =| 35days| Gearing| Debt to equity| =| Non-current borrowings/Equity%| 2009| =| 80,467| /| 218,931| %| =| 36. 8%| 2010| =| 80,654| /| 257,545| %| =| 31. 3%| 2011| =| 183,451| /| 298,027| %| =| 61. 6%| ?| Net debt to equity| =| Borrowings less cash/Total Equity%? | 2009| =| (80,467-32,140)| /| 218,931| %| =| 22. 1%| 2010| =| (80,654-24,362)| /| 257,545| %| =| 21. 9%| 2011| =| (183,451-22,033)| /| 298,027| %| =| 54. 2%| | Interest Cover| =| Operating profit/Interest expense ? 2009| =| 39,102| /| 3788| =| 10. 3| ? | 2010| =| 55,173| /| 5,017| =| 11| ? | 2011| =| 65,359| /| 6,300| =| 10. 4| ? | ?| ? | ? | ? | ? | ? | ? | ? | Net Interest cover| =| Operating profit/Net Interest expense| *Net interest expense=Finance expense-interest? | 2009| =| 39,102| /| (3788-117)| =| 10. 7| ? | 2010| =| 55,173| /| (5017-11)| =| 11. 0 | ? | 2011| ? | 65,359| /| (6300-103)| =| 10. 5 | ? | Cash Flow| Cash flow per share| =| Net cash flow from operating activities/Number of equity share issued| 2009| =| 74,017| /| 198,092| =| 0. 37365| =| 37. 4p| 2010| =| 96,380| /| 198,092| =| 0. 86542| =| 48. 7p| 2011| =| 120,554| /| 198,892| =| 0. 606128| =| 60. 6p| Investment| Earnings Per Share| ? | ? | 2010| =| 19. 0p| 2011| =| 21. 1p| References Atrill, P. and McLaney,P. (2011) Accounting and Finance for Non-Specialists. 7th. ed. Essex: Pearson Education Limited. Telecity Group plc Annual report and accounts 2011 Data centres at the heart of the digital economy, 2011 TelecityGroup. Telecity Group plc Annual report and accounts 2010 Data centres at t he heart of the digital economy, 2010 TelecityGroup. http://www. investopedia. com/terms/c/currentratio. asp, Investopedia.

The Chronicles of Sonnet 75 Essay Samples

The Chronicles of Sonnet 75 Essay Samples Everyone experiences time each day and since it is inescapable, Shakespeare expresses and characterizes time but its timelessness is why it's related to today. He is trying to reveal out the fact that the world is just but a place where creatures have been placed to live for a short while. He believes there is no reason why two people who are truly in love should not be together. The very first quatrain Shakespeare is saying that love does not need to be physical. The loved object functions as a substitute for some unattained ideal. It's an exclamation of exasperation. The rejection of this kind of love in Elizabethan times provides the poet the opportunity to speak of the character of love itself as transcendent and eternal. Reading example essays works the exact same way! This isn't an instance of the work generated by our essay writing service. As the poem continues, but the author indicates this man attempting to eternize his love. After that, utilize the revising tips to increase your letter. The metaphors begin in the very first quatrain and keep throughout the sonnet, as one by one they're destroyed, much like the life which is being spoken about. The entire sonnet reeks of the usage of imagery. The entire sonnet reeks of using Imagery. The entire sonnet malodor of the use of imagination. Personification is a significant component in the sonnet. The octave contains the initial eight lines that follow the particular rhyme scheme abbaabba. There are many unique possibilities for interpretation of the identical poem that numerous individuals will use their imaginations and take the things that they want from it. Additionally, it follows a normal stress pattern. Much is said inside this sonnet using somewhat simple instead of flattering diction and the majority of the words are monosyllables. This sentiment is a significant backdrop for those battles of The Faerie Queene. There's also repetition of particular words. There Is also it. Sonnet 75 keeps an extremely considerable tone throughout the full poem. Sonnet 75 Is a lyric as it tells of the poet's individual experience. Sonnet 75 is a lyric for the reason that it tells of the poet's individual experience. Sonnet 20 (see appendix B) shows just a single instance of sexual connotation that exists throughout the sonnets of the very first sub-sequence. It is extremely easy to understand that Donne was doing some new and distinctive things with his poetry, but it is not easy to account for these qualities simply because we don't know enough about him. I believe that it is likely a culmination of every one of these things that led Donne to differ from his contemporaries. The sonnet is a conventional poetic form. Introducing Sonnet 75 Essay Samples It's a particular rhyme scheme, and a volta, or a particular turn. Two or three rhyme patterns could be arranged in various ways. The couplet plays a main role, usually arriving in the shape of a conclusion. It always has 14 lines, and in addition, it has a particular rhyme scheme. High school isn't free in Kenya. Using NFL jerseys is extremely common. With personalized jerseys of the NFL, you're sure that you've got the ideal design. Locating a cheap NFL jersey has been a daunting undertaking for a lot of the hardcore fans no matter the team they support for. The somewhat subversive tone is performed through conclusion. An individual may never understand what true love is until it's been experienced. The ways the poems treat their respective mistresses is different too. Provided that she grants him sexual favors too, he'll stay happy.

The Fifth Largest Financial Group In Malaysia Finance Essay - Free Essay Example

Sample details Pages: 24 Words: 7212 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? The advancement of technology may influence the profitability and the competitive advantage of RHB. RHB introduce RHB Now which is an e-banking system for their customer is because most of their customers have internet access either at home or outside.  [9]  RHB Now allows their customers to access their banking account through the internet to perform banking activities such as checking balances, transfer funds and bill payment.  [10]  The aim for the RHB Now is to make it convenient for their customers as they may not be free to visit the bank physically due to their daily works. They can perform their banking activities via internet instead of visit the bank branches physically. Other than that, the technology advancement surrounding the business environment allows RHB to take on an opportunity to introduce RHB Now Mobile Banking app. Nowadays smart phones are widely used by the public as it is convenient and easy to be carried. Hence, this mobile app lication enables them to access their bank account rather than using personal computer. It is a miniature of RHB Now and it provides all the features on the RHB Now, except for the application on Initial Public Offerings and share trading. Customers may enjoy this service by downloading the RHB Now Mobile Banking app and login by using their RHB Internet Banking Username and password. Customers can also obtain the updates of the RHB privileges and discounts that are offered to them and keep updated with happenings at RHB by using this mobile application.  [11]  The application is to add value to the demanding lives of their customers to provide them a convenient method to access their bank account.  [12]  However, the interruption of the internet connection causes disappointment towards the RHB Now users as they may have difficulties in completing their banking activities through the system. The customers experience slow browsing speed while accessing RHB Now due to the cabl e problem of the internet service provider. The internet services providers in Malaysia include TM Net, Unifi, Celcom, Digi, Maxis and so on.  [13]  The internet service provided by the service provider is not always stable as they have limited cable with limited bandwidth.  [14]  The poor internet service which causes the disruption of RHB Now reduces customers satisfaction and they might refuse to use it again. Besides that, the advancement in technology also has negative impact on RHB as they may face fraudulent risk. This is because the technology that is being enhanced in todays world increases the risk of bank transactions over the internet as the outsider might hack into the companys system and increases the rate of fraudulent crime.  [15]  These fraudulent criminals attempt to steal the information of the customers through Trojan attack and man-in-the-middle attack. The hacker will install a virus known as Trojan in customers computers when they visit certain web sites or download programs. The hacker uses Trojan as an agent to hack into the computer of customers to steal their bank account information and make fraudulent transactions. Besides that, the hacker may use man-in-the-middle attack to steal the information of the customers. The hacker may create a fake website to trick the customers and the information keyed will be captured by them.  [16]  The privacy and security of customers will be threatened as their information will be transferred via the internet. The bargaining powers of supplier of RHB bank are relatively low. The main suppliers of banks are depositors, creditors and central bank (Bank Negara Malaysia). Depositors are those people who have excess of money on hand and prefer to get a regular income with these moneys safely. In banking industry suppliers have low bargaining power. The natures of the suppliers are generally those people who have preference to have a low risk investment and have a regular income with inte rest. The depositors want their money to be safe. Bank provides the best play for them to deposits their surplus money. RHB bank provide fixed interest rate on fixed deposits and depositors can claim their money regularly compared to investing their surplus money on other places such as investing in shares and gold which has higher risk. (#reference 1)So that, banks provide the best place for them to deposits their surplus money. Depositors believe that RHB provide the safest place than other investment alternatives. Thus, the bargaining power of suppliers will be lower. In Malaysias banking industry, all banks are controlled by Bank Negara Malaysia (BNM). Bank Negara Malaysia set the rules and regulations for every bank operated in Malaysia. These include the interest rate, exchange rate, financing guidelines and reporting standards. RHB bank does not have choice to choose for their best interest rate as it is controlled by Bank Negara Malaysia and it should be the same proposed fo r all others banks in Malaysia. The latest minimum rates for the fixed deposits on RHB Bank which between one month to twelve months for the balances of RM 1 million or below will be 3% for 1 month deposit and 3.70% for 12 months deposit. The fixed deposit rates are sets to ensure that depositors will get positive real rate of return. (#reference 2). The benchmark interest rate in Malaysia was last reported at 3.00 percent. For instance, RHB bank cannot control the interest rate of lending and borrowing. So that, the bargaining power of suppliers are low.The threat of new entrant have poses a threat to RHB bank and these will directly affects the operations and profitability of RHB bank. There are not only the incumbent rivals that will pose a threat to RHB bank in this industry. There are possible that the new entrants may enter to banking industry and thus can affects or increase the competitions in banking industry. By merger and acquisition of the existing banks, there will b e an immediate effect on RHB Bank. In long term view, by increasing the size and financial strength of the merge of existing banks and may alter the market situation slightly. Recently, BNM announce that foreign banks are allowed to own bigger stakes in Malaysia. Besides, they also grant more licenses and ease short- selling rules as it seeks to have triple sizes of the finance sector. (From Bloomberg news Dec 22) As a result, this may increase the competition in local market. This may also encourage foreign banks to merge with local banks to expand the size of finance sector. The gradual removal of barriers for overseas investors will result in a level playing field and make the local financial market more competitive, Abdul Jalil Abdul Rasheed (from Bloomberg news Dec 22) However in the recently news, RHB Capital Bhd have signed a conditional share purchase agreement with OSK Holdings Bhd that RHB Capital will acquire 100% of the OSK Investment Bank Bhd shares from OSK Holdings in exchange of RM 245 million new RHB Capital shares and cash of RM 147.5 million. By the combination of RHB Capital and OSK investment bank Bhd will transform RHB Investment bank bhd into Malaysias largest investment bank. On the other hand, a new entrant to banking industry doesnt pose much effect on RHB Bank. It is because that is not easy to start up a bank. By starting up a bank in Malaysia, it requires a huge amount of capital. Besides, a new entrant does not have straight effects on RHB bank. It is because RHB banking Group is currently the fifth largest fully integrated financial service group in Malaysia. If there is a new entrant, the new entrant is hard to achieve the cost leadership in banking industry. It is because the economies of scale of RHB Bank are the leadership in banking industry. Furthermore, there are a also a threat of new entrant from other services industry. Internet bill payment is services that can be easily capitalize by entrepreneurs. It is a good source s of generate revenue which are in terms of fee-based revenue. This is a threat poses to RHB Bank because entrepreneurs may squeezed out of the payment business from banks. However, with the new strategies of RHB Bank by using pay pal and easy banking it may have competitive advantage over the others financial banking institutes. Another threat that will poses to RHB Banks is companies that offering other financial services. If an insurance company start offering mortgage and loan services, it would be the new threat to banking industry. Besides that, not everyone can and exit the banking industry easily, it is because to start a new bank must fulfill the requirement from Bank Negara Malaysia (BNM). The government restrictions and legislation are set by BNM. BNM provides the rules and regulations for every new entrants of bank by using Banking and Financial Institutions Act 1989 (BAFIA). (# reference 3). Thus, the bargaining powers of supplier are low. The bargaining power of customers in Malaysia banking industry is extremely high as there large number of alternatives for the customers to choose. Apart from RHB Bank, there are so many banks and non-financial institutions in Malaysia. Therefore, there are a lot of choices for the customers to deposit their money or conduct their financial services. Those alternatives include CIMA Bank, Citi Bank, HSBC Bank, Hong Leong Bank and Public Bank. Moreover, there are still a lot of non-financial institutions such as EPF, insurance companies and unit trust companies.  [17]  Those non-financial institutions normally provide same services as financial institution such as RHB Bank. As a result, customers will have high bargaining power because they can choose from these alternatives. Another factor that will affect bargaining power of customers is the switching cost of choosing other bank alternatives in opening a banking account. This switching cost is low because people can just go to any bank of their prefere nce to do so with simple and swift procedures which does not cost much. It even cost nothing at all when one decided to deposit their money in any bank account whenever and wherever he or she wants. Compared to other major banks like Public Bank Berhad and Maybank, RHB Bank do not have the most branches widespread nationwide, which may provide relatively less convenient service to people, eventually decreases the switching cost for customers to go for the competitor banks. In additions, RHB bank also has less ATM machines compared to other banks.  [18]  Thus, the customers will prefer to have a bank which is convenient or nearby for them to do their banking service. Besides that, one of the major factors that causes high bargaining power of customers is they have full information with the current advanced information technology. The customers can likely know the feedback from other customers regarding the services offer by banks via internet. From the feedback, they can know exactly whether the bank service is good or bad. The bad feedback on the website will have a strong impact for other customers which will make them have a bad impression on that particular bank. For instance, there have a customer who complaint about the bank services provided by RHB bank. He was fed up and decided to cancel the RHB credit card and ask for refund on his credit balance.  [19]  This shown that the services offered are very important to a bank as the bank must have a good reputation in order to gain a good customers feedback on the website. There are large number of banks exist in Malaysia. The examples of bank that operates in Malaysia are CIMB bank, Citibank, HSBC bank, Hong Leong Bank, Public bank and Maybank.  [20]  All these banks compete with one another throughout Malaysia by providing similar services. RHB faces high competition as all these banks provide similar services and they even have more branches throughout Malaysia compared to RHB bank. RHB los es the competitive advantages in terms of the number of branch outlet in Malaysia. Besides that, most of the banks provide homogeneous product and services.  [21]  RHB retail banking offers services like mortgage, hire purchase financing, study loans, lease financing, personal loans, credit cards, remittance service, deposit collection, general insurance and investment products.  [22]  All these products and services are similar with the product and services offered by other banks. Furthermore, all the banks are offering the same interest rate as they have to comply with Bank Negara. All the banks in Malaysia are not allowed to set their own interest rate as Bank Negara controls the interest rate to ensure that the depositor gets back the returns they entitled to.  [23]  Therefore, all the banks are competing with the similar product leaving RHB having no competitive advantages in terms of product and services. However, RHB have this special service by the name of Easy R HB which introduce a new concept in the banking delivering with cutting edge technology. It provides paperless account opening, Insurance Kasih PA (Personal Accident), application for debit card, instant approval and disbursement of loan.  [24]  The services provided by Easy RHB only required ten minutes to complete the application of the required service and it is available all over Malaysia. The feature of instant approval of loan enables customer to obtain instant flexible personal financing amounts from RM 2,000 to RM 50,000.  [25]  It is very easy and convenient for anyone who requires the fund urgently. This service enable RHB to compete among the other existing banks as other banks does not have this special service. This service brings competitive advantage to RHB as there are many customers in Malaysia who demanded for this kind of services. Lastly, banking industry has high exit barriers. It is not easy to exit the banking industry as it requires many procedures to do so. The high exit barriers in the industry are making the competition between RHB bank and other competitor even higher. This is because all the banks have to compete to survive in the market as they know they cannot exit the industry easily. Therefore, every bank will do their best to maximize the shareholder wealth while maintaining the survival of the company. RHB Bank provides banking products with a range of variety to customers i.e. corporate and investment banking, retail banking, business banking, group treasury Islamic banking business, and global financial banking. These products aim to attract customers to place their money in the bank so that more cash flows can be produced in order to increase the profitability of the company. In the banking industry, for the most parts substitute products do not pose real threats to us. Despite a personal loan is deemed to be a substitute of a mortgage, yet in reality both are actually loans taken by customers in need of money. The same applies to the other bank products and financial institutions. Mortgage companies served as a substitute of banks but the product offered is similar with the one offered by an alternative vendor. In any case, there is a high probability that a mortgage company is owned by a bank holding company. For example, RHB Bank offers My1 Home Loan mortgage services. On the other hand, different banks serve almost the same function of bank transfers. Even the Internet banking services are actually bank transfers as a huge evolution of products from paper to electronic is being continued for years to come. Such circumstance intensifies the competition of innovation but the final services of moving money from one and another accounts remained unchanged. However, in terms of branding, RHB Bank is facing stiff competition with other main anchor banks and foreign banks in the industry. Malayan Banking Berhad, also known as Maybank in short, is the market leader of the industry. It is the larg est financial services group in Malaysia with wide range of financial products and services offered including investment banking, commercial banking, offshore banking, Islamic banking, Internet banking, leasing and hire purchase, factoring, insurance, trustee services, stock broking, asset management, nominee services, venture capital and discount-house business. At the same time, Maybank also owns the largest service network in Malaysia and also branches in key international financial centers. In Malaysia alone, Maybank has more than 480 branches comprising business centers, trade finance centers and insurance offices. Meanwhile in overseas, Maybank has branches in several countries i.e. Singapore, Philippines, Indonesia, Brunei, Vietnam, Hong Kong, China and United Kingdom etc.Compared with the market capitalisation of Maybank in the market, RHB Bank with only 174 group branches nationwide is certainly facing disadvantage. More branches of a bank ensure enhanced conveniences for c ustomers to carry out banking and finance activities. Meanwhile, it also boosts the brand name of the bank. In this sense, Maybank already made themselves highly popular among the people in Malaysia.In terms of investing, potential customers have different ways to place or invest their money according to their personal preferences and risk appetites. Customers who have excess funds may invest their cash in bonds. For example, bonds are fixed income securities issued to lenders of long-term loans, with a maturity date. They yield returns in the form of fixed periodic payments which are more secured compared to banking accounts. In Malaysia, one of the most popular bond products is the Exchange Traded Bonds and Sukuk (ETBS).Besides, people might also invest in unit trusts. Unit trust is a professionally managed investment fund, which collects resources from investors with similar investing objectives. The large sum of capital is then invested by fund managers into the stock market, bo nds, money market, property or others according with the investment objectives. When dealing with the investment choices, it might down to the buyer propensity to substitute which differentiate the products. Each bond in the market has its different price respectively and most of them are in a high price, which means it requires a switching cost if people tend to change their decision from putting money in bank accounts to invest in bonds. For ETBS, the principal price is stated at RM 100.00 per unit and comes in a minimum board lot size of 10 units per lost size, thus each lot costs RM 1,000.00 (excluding transaction cost).  [26]  Whilst for unit trusts, there is a minimum initial investment amount for each fund, which stated in each of the prospectus, respectively. Normally, the amount of RM 1,000.00 is required as the minimum initial investment. It incurs a high switching cost between bank savings and unit trust investing.  [27]  Compared to both of the investment methods above, the initial capital required to open a banking account in RHB Bank is just as low as RM 100.00. The switching cost is certainly high for consumers to take as there is a huge price difference between the methods, which means that customers who opt to go for investing in either bond or unit trust rather than depositing their money in bank, have to incur an extra RM 900.00 as their initial investment outlay.  [28]  RHB Capitals business is diversified and they have 7 major segments. These segments include corporate and investment banking, retail banking, business banking, group treasury, Islamic banking business, global financial banking and supporting centre and others.  [29]  Since the company has many segments, we will use the Pareto 80/20 rule to determine the 80% revenue generated from the total segments that the company have. Pareto analysis is plotted into a graph to show which segments able to provide 80% of the total revenues from all segments. From the Pareto analysis, we can conclude that the segments which are able to generate almost 80% of the revenues from all the companys segments are corporate and investment banking, retail banking and business banking. We will be evaluating the attractiveness of the business portfolio that RHB is holding based on the 3 segments which made up to approximately 80%. The Boston Consulting Group (BCG) Matrix is adopted to evaluate the attractiveness of the business portfolios of RHB. It is used to examine the different businesses in the portfolio on the basis of their relative market share and the market growth rate. The BCG matrix will provide the company a view on their business strength and relative market share in order to identify the comparative advantages indicated by the market dominance. Each segment will be plotted according to their relative share price and the market growth rate in the four quadrants, which include Stars, Question Marks, Cash Cows and Dogs. These segments have different mar ket leader which are CIMB Group Holding Berhad and Public Bank Berhad. After calculating the relative market share and market growth rate, we come to a conclusion that retail banking falls under the question mark quadrant as it has a low relative market share and high market growth rate. Retail banking has the highest revenue generated and therefore it has the biggest circle among all the 3 segments. This shows that retail banking is growing rapidly and they are still in the early stage of the product life cycle. Retail banking has a high potential to grow continually as they are still at the early stage of the product life cycle. However, retail banking has low market shares because they do not generate much cash. The company will face problem in collecting funds and they will not have enough cash for retail banking to grow. Retail banking falling under the question mark also known as having a problem child.  [30]  It has the potential in gaining market share and become a star if they work towards it. The market leader of RHB Retail banking belongs to Public banks retail banking in which both companys core business is the same. Public bank has the capability in becoming the market leader is because Public bank competes in the market for business growth and increased market share by differentiating itself through its highly efficient customer service delivery standards.  [31]  Public bank falls under the star quadrant as they have both high market growth rate and high relative market share for that segment. RHB Retail banking has the opportunity in moving towards the star quadrant by gaining market share. If retail banking doesnt become a market leader by growing its market share, it will then drop into the dogs quadrant when market growth declines. This segment needs to be analysed carefully to determine if they are worth the investment that is required to grow market share.  [32]  We will move on to the second largest segment revenue generator fo r RHB which is Corporate and investment banking. Corporate and investment banking falls under the cash cow quadrant as it has relatively high market share but low market growth rate. In fact, corporate and investment banking has a negative growth rate. This segment exhibit a return on assets that is greater than the market growth rate, and thus generating more cash than they consume.  [33]  Therefore, this segment provides the cash required to turn question mark into market leaders. Since RHB core business in retail banking falls under the question mark quadrant, the company may transfer the money generated from cash cow to turn retail banking into market leader which finally ends in the star quadrant. The third segment which falls under the 80% overall revenue generated is business banking. Business banking falls under the dog quadrant as this segment have relative low market share and low market growth. Business banking is not generating much revenue nor consuming large amount of cash. Business banking falling under the dog quadrant is actually a cash trap as the money tied up in this segment has very little potential in growing. RHB should reduce the amount of segments falling into the dog quadrant. Segment which falls under dog quadrant are candidates for divestiture.  [34]  RHB can dispose partial or the full investment in this segment through sale, exchange or closure.  [35]  RHB banking group is fifth largest fully integrated financial service group in Malaysia. The core businesses are divided into seven Strategic Business Groups (SBGs). Corporate and Investment banking are major in funding or lending needs of corporate customers.The revenue on assets ratio had slightly decreased from year 2010 to year 2011. The main reason is because the volatility in global market conditions led by the unresolved euro debt crisis and the slowdown of economy in Malaysia. This ratio show that how much revenue can be generated for each assets. Besides that, d ebt ratio of RHB bank had increased significantly from 0.6067:1 to 0.6560:1. The debt ratio indicates how well RHB banking group can efficiently manage the leverage of debt and assets. The of debt ratio from year 2010 to year 2011 indicates that RHB banking group have not efficiently manage the debt of RHB banking group. Next, segments assets to total assets ratio had a slightly decreased from year 2010 to 2011. The total assets had increased from 129,325,495 to 152,393,694. The increased in total assets mainly by the growth in loans and financing assets, cash and short term funds and statutory deposits. For instance, the segment assets also increased from year 2010 to 2011. The increases show that RHB banking groups have mainly to growth by using loans to financing assets. The will result the segment assets to total assets ratio increases from year 2010 to 2011. The segment liabilities to total liabilities ratio had slightly increased. The increase in total liabilities mainly is because the increase in deposits from customers. Furthermore, the profit before unallocated expenses over segment revenue had a significant decreased from year 2010 to 2011. It is mainly because of the in allowance for impairment loans financing had changed to become made for impairment loan financing. The overhead expenses in year 2011 had slightly increases and the segment revenue had decreases. This may indicate that RHB bank are not efficiently manage to generate enough revenue to cover the expenses. Retail Banking is a business segment which provides products and services to individual customers. The products and services offered to them include credit facilities (mortgages, hire purchase financing, study loans, lease financing and personal loans), credit cards, remittance services, deposit collection, general insurance and investment products.  [36]  Revenue from Retail banking had slightly increased by 18.17% or RM302 million. This is mainly due to a healthy growth of lo an, comprising mainly purchase of residential property, transport vehicles securities and lending to public sector. Increases in loan led to increases in segment assets.Increases in segment liabilities by 24% or RM6.1 million are mainly due to increases in deposits from customers. There are 3 types of deposits which are demand deposit, savings deposits, fixed or investment deposits and negotiable instrument of deposit. The growth rate of customer deposits was because of attractive deposit products. Overhead expenses increased significantly by 44.15% or RM261 million in particular year. This may due to the expansion of business volume and franchise. The number of Easy by RHB outlets had increased to 235 outlets from 111 outlets this year and thus incurred more usage of electricity and water, stationeries, rental, travel expenses and security system. In the point of efficiency in utilizing the cost in funding the assets or generating revenue, RHB Banking Group had performed well. In y ear 2010, debt ratio was 0.6819:1 which means that RM1 of segment asset can set-off RM0.6819 of segment liabilities. The ratio increased to 0.7285:1 which means that more segment liabilities can be set-off by the segment assets. Due to expansion of business volume and franchise, overhead expenses had increased. In efficiency ratio, RHB had improved in utilizing and controlling the expenses to maximize revenue. We can see that from the table above which the efficiency ratio had increased to 43% from 36% in previous year. Business Banking is major in funding and lending to small and medium sized enterprises. The revenue on assets ratio had a significantly increase from year 2010 to 2011. It is mainly because the group treasury revenue had significantly decreases. It is a measure of how efficiently management is using the assets to generate sales. A higher ratio indicates that the company is using its assets efficiently to increase revenue. The main reason of the increases of revenue o n assets ratio in year 2011 is because the group had efficiently generated revenue. The debt ratio had slightly increased from year 2010 to 2011. This indicates that the segment liabilities had increased faster than the segment assets. It is just a little changes, it is due to the increases in deposits of business banking. Next, the segment assets to total assets ratio had little movement to decrease sign on year 2011. It is mainly due to the increases in total asset of RHB banking group on year 2011. The segment liabilities to total liabilities ratio had slightly decreases because of the increases in total liabilities. The main reason is because the increases of liabilities in other segments. However, the segment liabilities for business banking had a slightly decreases. The profit before unallocated expenses for the year 2011 had a slightly increases. This indicates that RHB banking groups are efficiently and effectively generate higher revenue in year 2011. The overhead exp enses for year 2011 had increased significantly. The increases may lead to inefficient in managing the expenses over revenue. The expenses spend have over the revenue from year 2010 to year 2011. Its financial objectives are to attract new customers, increase market share and retain existing customers. The measurements of this prospective are customer satisfaction, customer growth and growth of deposits. In year 2011, overall customer satisfaction and loyalty scores had improved by 9% over the previous years scores. Customer growth is healthy as deposits from customers had increased to RM115 million from RM94million in year 2010. To attract new customers, image or reputation of the bank is very important as it impacts directly on financial performance of bank. A good reputation can attract more customers and hence increase business volume. This can be measured by customer growth. As most of the customers do not have sufficient financial knowledge, they may feel unsecured and u ncertain of which products suit them the most and can fulfill their needs. Thus, bank has the responsibility to provide relevant, understandable and fair information of every service and product. It can be printed out in brochure or flyers. Front-line employees must understand the products and services well and able to deliver right information to customers. It can reduce the mistakes when servicing customer as the employees know what are the needs of customer hence sell the right product to them. This can be measured by feedback from customers. The objectives are to increase innovations, improve operational efficiency, capabilities, and services. Managers have to focus on customer satisfaction and those internal processes in order to attract new customers, retain existing customers and meet shareholders requirement which is maximize their share value and financial return. Innovation is important for bank to create new and innovative products or financial services which meet the nee ds of customers and also generate significant revenue from it. The products or services must be convenient for customers and cost efficient for bank. This can be measured by revenue generated from new product or service. Operational efficiency can be measured by operation expenses on operation revenue. It measured how much of operation expenses can generate RM1 of operation revenue. To improve it, manager has to control and manage the expenses so they spent in right and fair way. IT and information system (IS) can used to improve the efficiency. The more advance IT and IS are, the more efficient an employee performs tasks. However, employee must know how to use them so he/she can deliver good service. Good service from the bank is imperative for survival in the industry. Customer is a powerful and persuasive tool in promoting something. When the customers satisfied with the services provided by the bank, they will promote the product or service to people around them. As a result, it increases number of customers and revenue.Staff behaviours and attitudes play an important role in a service industry company. It can have significant affects to the efficiency and effectiveness of a company. For example, if the staff behaviours are not good enough to service customers it may influence the confidence of customers. Loss of confident on customers may lead to bad reputation on RHB bank. Hence, the staff behaviour of RHB bank can be used as an indicator of the efficiency and effectiveness. In terms of financial, one of the main goals of enterprises is the maximisation of profit. This can be achieved by cutting down unnecessary expenses that do not constitute to income generating. In order to achieve that, managers have to seek ways improving the productivity and optimisation of business processes as most of the times unnecessary operations caused backfire to enterprises with high expenses. For example, employees with too much slack time provide no productivity yet caus ing the enterprise to incur costs on their salaries which are wasted. In supportive of ultimate goal in creating wealth, enterprises also keen to increase revenues. Enterprises with more valuable customers and broader relationships with the VIP customers are more likely to have their revenues increased. This can be done through sales of new products and cross-selling of existing products. In this case, RHB need to value their customers highly and foster a good relationship with them in the seeking of generating more revenue. Besides, enterprises also keen to improve on their returns on spending (ROS). ROS is one of the methods to measure the efficiency in managing company funds. By engaging in high return activities, enterprises are able to maximise profits on the funds spent. Therefore, given with the ratio calculations on the main business segments, RHB should engage in business banking segment as it provides a high ROS.Enterprises always seek to gain competitive advantage over their rival companies in the same industry. It is much determined by the extracting, manipulating and use of information. In order to improve methods of gathering and analysing of information for a better decision making, it is essential to introduce innovative IT support systems. Other than that, enterprises with better allocation of resources have higher claims to offer the highest profitability. In the era of information technology, innovative banking and financial services such as Internet banking and mobile banking provides convenience to customers. Without any doubt, RHB should allocate more resources properly in developing such IT technologies to increase competitive advantage. Strategic jobs and competencies is also another issue as it includes the ability to cross-sell the financial products by focusing on customer needs. By doing this, employees of the company should have a better understanding of company background alongside the products and services, as well as th e understanding of financial markets as a whole. In this case, RHB should ensure that all of the employees have a well understanding of the company and the industry.RHB Banking Group has to grab any possible chance to increase its profit thus maximize shareholder value. Investments in Venture Company can be taken into consideration as company can enjoy tax incentives. Tax incentives can increase company profit. RHB should increase the income limit of loan to reduce the risk of unable to collect interest and loan. Reduces in bad debts can enhance the liquidity of the company. Regards the loan interest subsidy, RHB can provide a more attractive loan package for different ages of people to overcome this threat. To reduce the risk of inflation effect on the company, RHB must have skilful and experienced financial and investment analyst to evaluate any investment plan so Net Present Value of profit earned from investment project wouldnt be affected. From the analysis, we know that RHB do es not have enough branches throughout Malaysia. Their customers will switch to another bank to do banking as it is more convenient for them. In order to overcome this problem, the company may set up more branches all around the country. However, setting up branches and business operations consume large amount of funds. Although it consumes large amount of funds, it is profitable for RHB in long term. At the same time, the reputation of the bank will increase and the public will be aware of the bank. They may eventually switch to RHB if the bank can meet their needs. The bank should place concern with the culture of the local customers as to fulfil all their requirements. In order to attract more customers, RHB should come out with differentiated products however it will be imitated by other banks in a very short time. Besides that, RHB should often review the e-banking system (RHB Now) to avoid any errors in the website. This is because the customers will be confused if the informa tion provided in the website consist errors and it will definitely cause an adverse impact on the reputation of the bank. RHB should also provide support service to encounter the problems faced by the customers. The bank can collect the feedback from their customers as to improve their current services. Besides that, RHB should remind their customers to be alert with any fraudulent case. The bank should encourage the customers to report if they discover any fraudulent case. In order to lower the bargaining power of depositors. RHB Banking group must efficiently react to the changes of strategy by competitors. Competitors may implement new strategy anytime to get the competitive advantages. For example, lowest interest rate among banking industry or new promotion pack provided. These changes of strategy may have significant affect the bargaining power of suppliers. To improve, RHB bank must always observe on the movement of competitors. Besides that, to improve the bargaining power o f suppliers RHB Bank must always implement strong risk management on the changes in rules and regulations by Bank Negara Malaysia (BNM). BNM may change the legislation of bank any time. This may significantly affect the effectiveness of RHB bank. So that, a strong risk management can helps to lower the risks of losses. The management of RHB bank should provide training to the employees in order to have a good customer service. Besides that, they also have to standardize their banking procedures so that every branch is using the same procedures and can finish the process efficiently. By having a good customer service and efficient banking procedures can attract more customers to choose RHB bank. Moreover, the RHB bank management team has to ensure their employees are giving a good and polite service to the customers. Thus, by providing good services, the reputation of the bank will be improved. Other than that, in order to encourage the employees to provide a good service to the c ustomers, the management team can organize some internal competition among the employees such as the monthly best smile employee and he or she can get extra bonus for that month. This competition can motivate the employees to be more polite to the customers and they may work hard for the extra award. By increasing the market share on banking industry can helps to improve and maximize the shareholders wealth. Acquiring more shares on other banks can move RHB bank to market leader in banking industry. Growth and expansion of RHB banking group can helps to enhance shareholder value maximization. Revenue will be increase if successfully expand become larger in banking industry. Besides that, to ensure no new entrant can enter into banking industry, RHB bank must put higher entry barrier in terms of economies of scale. The higher entry barrier is the harder for new entrant to enter the industry. For example, if RHB bank can promote the promotion package to customers with the highest rate of return for depositors, new entrant may harder to promote the same things because of higher economies of scale needed. Strategies are always the weapon of a company. By implementing new strategies can get competitive advantages. By getting higher competitive advantages among competitors, it can help to increase revenue of RHB bank. Implementing new packages of savings or loans can fulfil customers needs and it can help to attract more customers. In order to overcome the threat of substitute products, in terms of branding, RHB bank certainly needs to improve their market capitalisation as it is facing stiff competition with other banks in the industry. By carrying out benchmarking with the market leader Maybank is one of the most effective ways. Compared to Maybank, RHB certainly need to increase its popularity among people by setting up more branches nationwide to ensure a better capture of potential customers. Other than that, RHB can also incur more expenditure in advertisin g to boost the brand name of the bank. In terms of investing, as we can see, there are many types of investment in the market for people to invest their money in. To cope with the threat of different kinds of investment, RHB should further increase the awareness of people towards its bank products by highlighting the key benefits and advantages of the products compared to other kinds of investment alternatives of other banks and financial institutions. For example, RHB can advertise more on its differentiated mortgage loan in the market by offering a lower rate or better benefits to the people. It is recommended that the company should focus on the core business segment of the company which gives the highest return. Since retail banking is the core business segment and it falls under the question mark quadrant, it shows that the segment has insufficient cash flow and has a potential growth. If this segment has the cash flow for development and growth in the market share, it can be p ushed to the star quadrant being the market leader of the industry. The cash flow needed for the retail banking growth can be obtained from the corporate and investment banking segment. This is because corporate and investment banking segment falls under the cash cow quadrant where it generates lots of cash flow but has very low growth. The company can fully utilized the money generated from this segment to push their core business to the star quadrant being the market leader. Besides that, the company should reduce having segments which falls under the dog quadrant. The business banking which falls under the dog quadrant should either dispose partially or completely. The investment can be disposed through sale, exchange or closure. To improve the financial ratio of RHB Bank on the segment of corporate and investment banking, RHB Bank needs to reduce the overall expenses of the segment and on the other hand generate more revenue for the segment. The revenue on assets ratio can be im proved by increasing the revenue higher than the assets. However, the main reason of not efficiently generate higher revenue is because of the global market condition. Revenue can be increase when the changes in better market conditions. Efficiently manage the debt of RHB bank can decrease the gearing of RHB bank. Always observe on the movement of market conditions implement different strategies to generate more revenues. As RHB expanded its business volume and franchise all across the Malaysia to fulfil the demand, costs such as rental, renovation, furniture, staffs and overhead had increased. To improve profitability, RHB should adopt an effective way to manage and control overhead expenses in branches. To increases deposits from customers, RHB can promote or advertise the products or package aggressively in magazines, media, social networks or forums. As RHB is doing well in business banking, it is recommended that the company should engage more in the segment for the years as th e industry of SME is being developed well in accordance to the SME Masterplan 2012-2020, introduced by SME Corporation Malaysia, seeking to contribute in accelerating the growth of SMEs to achieve the status of high income nation as stated in the Vision 2020 of Malaysia. Upon success, implementation of the Masterplan will involve more contribution from SMEs to the economy to the country as a whole by 2020. Don’t waste time! Our writers will create an original "The Fifth Largest Financial Group In Malaysia Finance Essay" essay for you Create order