Relative market share profit is one of the key indicators to be used when selecting a stock to invest in. The market share numbers is simply a percentage that shows how much of the total sales in a sector or market a company makes. For example in the commodities market lets assume the global annual sales of raw sugar cane are $200 million. If Company A has annual sugar cane sales of $55 million then its global market share is 27.5% (55m / 200m).
Market share is a good indicator of a company’s progress if measured over a period of time. Quite often you can plot together the market share over the last few years from information sourced from annual reports, industry publications of market research available on the internet. By looking at the relative market share over a period of time, alongside some other key performance indicators such as profitability can be invaluable to achieve smart stock investing.
A company may have aimed to increase its market share, which is obviously good however to achieve this it may have to reduced the prices it charges. By reducing the profit margins to increase market share the company may have overall reduced its profit. The full effect of this can only be measured by performing relative market share profit analysis.
Such equations and ratios should however be considered alongside strategy information. Many successful companies are highly successful despite having very small market shares. A good example is the car manufacturer Ferrari. Their market share of the entire car market globally is well under 1% however they only target a very small niche of customers, the very rich. By targeting their product to this niche they are able to dominate it and post excellent profits, despite their tiny market share.
Source:James Mckrr
July 15th, 2008
Have you ever wondered what make the stock market rise and fall? If you watch the news at all, you will have seen the stock market levels mentioned. You have probably also noticed that the prices rise and fall each day. Why stock market prices rise and fall is a complex question with a complex answer.
There are many factors that affect the price of stocks. Included are inflation, interest rates, domestic political unrest, war or terrorism, crime, fraud and oil or energy prices to name but a few.
All of these factors will drive the price of the stock market up or down. However regardless of these factors, the price of stocks is liquid and it is determined by how much buyers are prepared to spend and how much sellers will take for their stock.
Usually, to tame the rate of inflation, the federal government hikes interest rates. While this slows the inflation rate, it also raises the interest in small lending institution stocks (these are guaranteed by the government, thus VERY attractive here). This in turn moves investors away from equity stocks in lieu of the guarantee available with the small lenders. Risk here is lower, obviously.
This affects stock prices in several areas of the market. What happens is this: say a stock was selling at $20 per share before the interest rate went up from 5% to 6%. So the stock price is figured like this: 1/. 05= $20. After the hike, the price is now down to $16.67 per share or 1/. 06. This represents an almost 17% drop. Taken right across the market, this can adversely affect many other stocks as well and drive the market down temporarily.
A spike in oil prices can and will affect auto prices, food prices, gas prices and many others, thus effectively pushing inflation upwards. This presses the government to raise interest rates and we have the example above all over again.
War abroad can affect the market, too. A recent example is the war in Iraq, which has driven oil prices up to unprecedented levels. We have all seen the exorbitant gasoline prices that have been the result, but now we are seeing hikes in home lending, grocery prices and transportation costs also.
So as you can see, there are many scenarios that can unfold and affect how the stock market prices rise and fall. All these factors play out together in the rise and fall of the stock market. If you watch it closely, you can pick out the trends and accurately predict price hikes, interest rate increases or when inflation will occur again.
Another factor in how the stock market rises and falls is foreign currency rates. As a particular currency fluctuates, stock prices in companies based in that country will react accordingly. When the Japanese yen falls, so does interest in Japanese technology stocks. Conversely, if the US dollar falls to dangerous levels, our government simply prints some more paper money and places it in circulation. This, in my personal opinion, creates a false sense of security in the economy.
However you look at it, stock prices affect how we live every day. All aspects of our daily lives are affected. Grocery prices, gas prices and the cost of buying anything are driven up. So watch the stock market closely. It affects you whether you know it or not.
Source:- Roger
July 15th, 2008
Recessionary times weed out the weak and the strong prosper. In business terms that means they can gain market share. Another perk about these poor economic times is that you can negotiate a better deal for your company and the various forms of advertising since you know that everyone else is cutting or that they are completely stopping to advertise.
Our economy and the global economy is in a pickle. There is waning consumer confidence. Everyone seems broke. Spending has tightened. The mortgage crisis is still taking victims. Just look at the mammoth of a company that it has brought down, Bear Stearns. Who and what company is next?
This Recession is no kitten. It’s a lion that’s ready to go in for the kill. You need to prepare your company for battle and come out kicking.
There are two trains of thought when it comes to branding and a Recession. One is to continue to spend money in spreading word about your brand. The other is to cut off or cut down the spending to branding, advertising and marketing.
It has been found in numerous case studies that the first is the way to go and the latter is only a quick fix that can ultimately actually kill your business. It’s a knee jerk reaction to want to cut all “unnecessary” expenses and of course expenses that are not directly linked to rent, utilies, inventory etc… seem like the likely ones to go.
“That’s where the mistake comes in. Branding gives you an edge over your competitors. It makes your customers remember you and feel more comfortable, familiar with your brand when its time too choose” says Entrepreneur and Author Ben Peterson of the book “$500 Startup” and the fully guided work from home course that anyone can do at www.500DollarStartup.com.
Hard times is actually the best time to take over market share as the weak die off. What a Recession should do to your company is make you smarter with your dollars. I mean you really should always be lean and mean but we all know that when times are fat, its easy to get sidetracked. Anyway, look to maximize your ROI in your branding efforts but definitely keep spending on it.
I suggest you look at more Internet marketing as the whole trend for viewership in the online world is up while traditional medica is down. That’s why you hear all those stories about newspapers, magazines, broadcast tv, and cable tv losing money and viewers.
There is a direct link between Internet companies making more and more money while traditional media and store fronts are hurting. The Internet is enjoying more people every day who are now turning to it as their primary source for entertainment, information and shopping.
You as a branding professional need to be keenly aware of this fact and use it to your advantage.
Source:-Gali Kyrstal
July 15th, 2008
