Category: Company

Strategic Management: HFL Strategic Report Analysis

1. Introduction:

The importance of drawing a strategic plan is vital to determine the success of a Company, ‘Where do you want to play and how are you going to win?’

Equally important, to develop a business strategy a company needs a good understating of what it is and what it represents. (Vision, Mission Statement and Values). Once achieved a deep understanding of the company’s vision, mission and values then it will be helpful to start thinking about the strategic analysis process.

From the scenario, we can see that HFL seems to be a company with a well-defined strategic process.

An environmental analysis of its current strategies it is important to make them aware of their operational inefficiencies, financial issues constrain and employee motivation. On the other hand, we have the external environment considerations that include the analysis of the change in customer tastes, political trends and economic shifts.

2. Industry Overview and Analysis:

As we can see from the scenario HFL operates and competes in the manufacture and whole of the gymnastics of high quality handmade gymnastics wear and associated products.

On the other hand, the company selling figures is divided Between UK sports retailers (60%), exports to the USA (35%) and Canada (15%) by using channels such as their websites.

The Industry of sports manufacture is constantly changing being influenced by many different trends. Under these circumstances the market environment evolving sports manufacturing brands are facing a lot of challenges to keep their position in the market, especially sports apparel/accessories which is demanding more technical clothes.

3. Porter´s Five Forces- Industry Analysis.

a. Barriers to Entry

Moderate

The demand for sports clothes is growing and requires a lot of capital requirements, distribution channels such as online sales and small shops. As mentioned above the differentiation of products it’s important especially in areas like branding, design, and branding.

Equally important manufacturing and sourcing costs tend to decrease which encourages larger firms to enter the market.

Besides, the legal barriers are moderate however many brands have patents for their unique manufacture purposed materials which is not a significant barrier.

b. Competitive Rivalry

High

HFL is competing with 6 other companies, where product differentiation is of high importance in the ‘quality of handmade gymnastics wear and associated products’.

Therefore competitive rivalry is high in the sports clothing and accessories industry. It is certain that there is a strong competition concerning, technological fabrics, pricing, design, branding, and features that can be exposed and affected by rapid changes in buyer preferences and product innovation called technological improvement.

To get advantage HFL invests in producing materials based on their quality and handmade products that tend to last longer. Consequently, that helps to build a strong brand image and a good reputation to avoid the customers to change to the competitor.

c. Bargain powers of buyers

High

Since there is a low cost in changing to the different alternatives the bargaining of power tends to be high. All the manufacturers are facing difficulties as the pricing system is very competitive to avoid losing the customer to the competition. Presently customers are more conscious of what they are buying as they read and inform themselves online before making a purchase and always attentive to the quality standards, in fact, the most important in the manufacturing of sports clothing is a strong brand image to protect the brand loyalty.

d. Bargain of Power suppliers

Low

Nowadays there is a fairly large pool of suppliers, in the case of HFL they have the ‘capacity and can sell all they can produce’. Obviously since the can produce it gives them the power to control prices, quality, and quantity. Besides that, it helps them give more pressure on their competition making the industry more competitive and decreasing profit potential for the buyer.

e. Threat of Substitutes

Moderate

Gymnastics clothes are unique, the threat of substitute is moderate, and ‘the global gymnastic market can be segmented on the basis of a variety of textile, style, sleeve length, size, demographics, sales channel, buyer type, gender and regions’, based on the quality and handmade process of HFL, specialized clothing has an advantage when it comes the make a decision from the customers point of view. Quality helps people to keep their trust in the brand.

f. Pestel Analysis

The Pestle analysis helps to evaluate the macro environment to which HFL is exposed, it helps the determine external factors that can influence the company`s performance in the manufacture of sports clothing global market.

g. Political Environment

Political factors can decide the survivability of an organization.

As a company manufactures its goods, HFL will always be subject to changes in tax and manufacturing laws the UK government suggested to increase the VAT on sporting goods to 22% to raise additional tax receipts, which can affect the sportswear market to shrink by 5%.

The decision to leaving the EU can increase their sales in the UK and decrease outside, however, the exportation to countries like the USA is ‘expected to rise’.

h. Economic

Since HFL is part of the 6 biggest companies in the market, a market collapse could bring bad news to HFL. The impact could make consumers choose/ switch to a different competitor, cheap products and leave quality to the end of their priorities.

i. Social

Social Status means brings more modernity and healthy consciousness in the industry, therefore will buyers buy more and more. HFL’s new initiatives on custom design can improve their social aspect which will make customers loyal to the brand.

j. Technological

Technology is transforming and forcing the industry to constant change, it gives companies the ability to innovate from different angles.

In Spite of being traditional, the HFL idea of a costume design website that allows customers to create and draw according to their needs and the automation of their cutting process it shows that technology provides values to organizations like HFL. In other words, it helps them to optimize targeting, production and maximize revenue.

k. Legal

From the legal point is important that keep a clean sheet if VAT goes to the sales increase if the UK leaves the UE it important to follow the legal rules according to the changes.

HFL, being part of the 6 companies that produce quality products, should meet all the legal criteria’s that can cause a lack of loyalty from their customers.

l. Environmental

Positive environmental factors are becoming are gaining more acceptance by the customers and the government, not referred on the case it is important to HFL to invest in ‘Green products’ which will attain more market share in the sports manufacturing industry.

4. Scenario 2

a. Porter’s five forces

In this case, porter’s five forces have been used to identify the main factors that have a potential impact on the SCH and to understand the strategy used for their behaviour in the health Sector.

b. Competitive Rivalry

Private health care rivalry manifests itself in many ways, especially in the context of public health care. The barriers to entry in the market are very high due to the high standards keep within the industry. In addition, government legislation also limits competition in the health care industry.

As we can see SCH receives most of the customers that are recommended by local hospitals and doctors and this is due to the service quality and quantity provided by them comparing to the public sector.

Therefore comparing with the SCH only loosed to the public sector in pricing.

c. Bargaining Power of suppliers

SCH has diversified their services and a small central team who are the key point of the patients and nursing staff. Also counts 150 employees who provide service to around 800 patients

d. Bargaining Power of Consumers:

Most healthcare treatment is paid by insurance, that can be paid privately or by the government. In the case of SCH the prices are higher compared to the prince in the public sector, however, SHC has the advantage of offering higher services than the local hospitals and doctors.

e. The threat of New Entrants

Private care organizations can be seen as a new market entrant or as the reorganization of existing providers that will allow a better completion amongst them.

As we can see in the case there is a franchise company that is willing to enter into the market in South East London, which can end up affecting SCH.

f. The Threat of Substitutes:

Generally there always a competition between traditional and non-traditional private care providers and services. Technologies are vital to keeping up with the threat of substitutes in products and services, therefore it is important to SCH to invest in new technologies. (In the case it is stated the need for investing in portable medical equipment and probably in the future remote patient monitoring.

g. Key Strategies challenges:

‘The model of Healthcare Business has to rely on the value for the patient by creating competition concerning the results at medical condition level’ ( J MED Life, 20008).

Some of the key challenges for the SCH will be:

Competition Requirements in Terms of value offered to health care consumer, the main goal of a health care service is to deliver the service to the patients, it is important to know, who the client, what does he needs, is how can we create value and how do we need to organize ourselves. One of the important points is how do we respond when they are contacted, how can we meet their needs. Equally important never reduce client satisfaction, compromise quality, and limited coverage.

Maintain SCH high-performance standards of their own caring services delivery, focus on patient and employee satisfaction as it reflects also on the relationship with the patient, especially with elderly people.

5. SWOT Analysis

· Strengths

The costs of operating in private health care are low, being the UK one the countries with a large number of 65 or older people, therefore the demanding of the private health services increase substantially. As we can see from the scenario the costs from the private sector are higher than the public, however, the service provides from the private are with better quality and personalized. In addition the advantage of getting recommended by local hospitals and doctors. Previous studies state the barrier to entry into this market is moderate ‘given the licensure requirements for these businesses.’

· Weaknesses

Comparing to public health care organizations, a private system in much expensive there it can limit some of the people as they don’t have the capacity to pay unless they have help from insurance companies or government funding. The constant rise in costs can result in the closure of private care companies.

· Opportunities

SCH has the opportunity to expand their business when it comes to getting routine treatments after a GP surgery since they have qualified nurses that can apply the same procedures that are used in the public sector. The service for a short term required and the investment in portable equipment that can provide a better customer experience leaving the patients in their comfort zone.

· Threats

A large number amount of business enters on this market, as we can see a local newspaper has reported: ‘that a new franchised home care operator is intending to offer services in the south East’. Consequently, it can be a barrier to SCH to grow in Southeast London.

6. The four strategies of the Ansoff Matrix are:

a. Market Penetration

SHC should identify the right markets and regions to invest in with the right potential and growth potential; establish connections and partnerships with domestic and local companies through mergers and acquisitions so as to strengthen and improve the service quality

b. Product Development: It focuses on introducing new products to an existing market.

It is important to maintain the quality standards provided by SHC, establish a good private care plan so that product requirements can be transformed into actions; determine the private care market. Execute the product development plan

c. Market Development: it is based on the strategy to enter into a new market with existent products

As per the case of SHC there is a need to enter into the business of providing short term services to families since in private care some families have the need to have 24-hour service.

d. Diversification: It focuses on entering a new market with the introduction of new products.

Since the demanding from the patients is to get private care without moving from their homes, SCH needs to invest in portable equipment and training to nursing staff will be the introduction so the patients can get treated with their families by their side.

e. Suitability

Suitability Internal development is a good way for SCH to enter a new market, the opportunity of offering a better service compared to public care shows that SHC strong position in the market. Their position in the southeast London with highly trained and motivated staff helps them to deliver a high-quality service based on their statement ‘We treat our customer with respect and dignity and provide highly personalized and tailored home care services’.

f. Acceptability

SCH seems to behave their system in place to achieve maximum success. The fact that they are receiving a recommendation from doctors and local hospitals will help to expand their business and enter into new markets. Continued market development is also recommended for SHC enabling it to tap into new markets enhancing its growth, ensuring its sustainability and contribution to the enhancement of shareholder value.

g. Feasibility

‘Capacity of the organization to implement the strategy, especially focusing on the availability of resources’ (Thompson, et al., 2008).

One of the most SHC priorities should be diversification, the market is asking for private care as the public is losing the capacity to provide high-quality services. The investment in portable medical equipment will allow the company to keep a strong strategic position in the healthcare care market and achieve the necessary growth in the future. The need to pursue appropriate strategies is important to the growth and keep up with the rapid changes.

h. Strategic Recommendation/Conclusions

Based on the analysis of the scenario, SCH the consistency in the quality of the service by having patients who are increasingly better informed, aware of their rights, capacity to keep choosing SCH as their private care provider, a decision that can have a positive impact on the company`s financials.

The focus passed from the product or service to the patient, in other words, a great customer experience.

On the other hand the increasingly professional and skilled competitors, SCH needs to keep hiring qualified trained professionals and provided constant training to maintain their standards.

Equally important Measure Outcomes and Costs for Every Patient, as most of the health care system, are department-based and not patient-based, therefore good strategies here will design good strategies based on measuring the cost of care.

Meanwhile, one of the improvements SHC could be the integrated delivery systems by defining the scope of services and choosing the right location for each service line, like that it will be possible to improve SHC system of keeping everything close to the patients’ home or workplace.

Other points to implement strategies will be to expand geographic reach, it is important to SHC not to stay only in the South East London, as it is important to serve more patients on large scale by improving the value and not only volume.

Build an Enabling Information Technology Platform is also important is help SCH center on the patients, it uses common data definition, a medical record that can be accessed to all staff involved, the system can include expert systems for each medical condition and it is easy to extract information.

7. References:

1. Healthcapital.com. (2016). Four Pillars of Healthcare Valuation: Competition. [Online] Available at https://www.healthcapital.com/researchmaterialdocuments/publishedarticles/3_NACVA_TVE_Competition_Article.pdf [Accessed 11 Jul. 2019].
2. Popa, F., Purcărea, T., Purcărea, V.L. and Raţiu, M. (2008). Current challenges for healthcare services and the opportunities created by the marketing abilities. Journal of medicine and life, [online] 1(1), pp.16–22. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3018957/ [Accessed 11 Jul. 2019].
3. Healthcapital.com. (2016). Four Pillars of Healthcare Valuation: Competition. [online] Available at https://www.healthcapital.com/researchmaterialdocuments/publishedarticles/3_NACVA_TVE_Competition_Article.pdf [Accessed 11 Jul. 2019].
4. Harvard Business Review. (2019). The Strategy That Will Fix Health Care. [online] Available at https://hbr.org/2013/10/the-strategy-that-will-fix-health-care [Accessed 11 Jul. 2019].
5. Oxford College of Marketing Blog. (2019). Using The SAF Strategy Model to Evaluate Strategic Options. [online] Available at https://blog.oxfordcollegeofmarketing.com/2018/02/25/evaluating-strategic-options-using-saf-strategy-model/ [Accessed 11 Jul. 2019].
6. Anon, (2014). Strategic Management Report – A Strategic Pathfinder for STARBUCKS. [online] Available at https://www.academia.edu/9806255/Strategic_Management_Report_for_STARBUCKS [Accessed 11 Jul. 2019].

The Morality of Whistleblowing

The act of reporting discrepancies within a company either internally or externally in defined as whistleblowing. There are two forms of whistleblowing internal and external. When the information is reported within the company it is considered to be internal whistleblowing and external whistleblowing is when it is reported to a source outside the company. Another word that a whistle-blower can be refer to as is an informant, both words will be used interchangeably throughout the essay. Morality can be used to refer to certain codes of conduct put forward by a society or group or accepted by an individual for his/her behaviour. Even though whistle-blowers are protected by law some people may consider the act of whistleblowing to be immoral while some others think it is a moral act. According to an article by Mathieu Bouville if the act fails to achieve anything then whistleblowing was the wrong decision or the right decision that nobody wanted to make. In that case whistleblowing can be considered moral act since it exposes wrongdoings , it can change policies, but it can lead the person being targeted .

Whistleblowing can lead to the exposure of wrongdoings of a company or of workers in the company. Companies may choose to engage in illegal activities such as tax evasion or workers in the company , acting on their own accord may choose to steal money from a company or any other activity that does not benefit the company. For example, a pharmaceutical company was selling a drug that was not approved by the U.S Food and Drug administration. Four of the employees in the company discovered the wrong doings of the company and brought charges to the company. In the case above the company itself was engaging in criminal activities unknown to the employees.

In most cases the act of whistleblowing can in the long run lead to changes of policies. In light of the rise of whistle-blowers there have been many changes of laws that offers protection to informants. In 2011 the Securities and Exchange Commission (SEC) established a whistle-blower program in order to encourage people to come forward with any illegal actions they know of. The program requires a person to voluntary provide credible information to receive a cash prize. The SEC also passed a law that allows for legal action to be taken against anyone who retaliate against any informants. The retaliation against informants would further be explained below. The creation of these policies would not have been possible if there were no people exposing wrongdoings of companies and employees.

The above two points highlight the positives that can come out of blowing the whistle, but after the person informs on the guilty party, he/she continue their day to day activities in the same space. Whistle blower have a negative connotation around the word. When a person bring to light illegal actions of a company or person fellow employees or the general public may tend to think badly of that person. In some cases, fellow employees of the informant may alienate themselves from the whistle blower. Sometimes the person may be fired from their job due to informing on the company. Another scenario is that the whistle blower may be shamed by the general public for their action. A popular case to portray the above claims is the case with Edward Snowden. Edward Snowden worked for the National System Agency as an It system expert. In 2013 Snowden went to Hong Kong where he provided documents about agencies surveillance on citizens to journalist there. After he did this the American government cancelled his passport leading him to seek asylum in another country, Russia. The above scenario showed an extreme effect that whistleblowing have on the individual who released the information .

In summation whistleblowing can be viewed as being a moral act as well as immoral based on the outcome. Many positives can come out of blowing the whistle such as exposing criminal activities as well as improving policies or result in the creation of new policies. On the other hand, a person who blows the whistle can be faced with backlash from the public.

The Solutions Of Ethical Dilemmas In Business Association

Ethical Dilemmas usually occur happen in this when two parties don’t agree with that association culture. Every organization has its own ethical culture according to their requirements and standards but they are few rules that are created by the government which should be followed by every business company. This dilemma had created work clashes in a business affiliation and business operations of that affiliation couldn’t function properly. The association had presented this ethical culture concept for the sake of their employees and reduce work clashes. It would help the affiliation employee to understand the right decision in business decisions in that affiliation. The affiliation employee shall know their working association ethical culture to reduce that ethical dilemma.

When affiliation employees don’t know that company rules then the employee would face problems in their workplace. More than 80 percent of a business association in this technology world had adopted this ethical culture to reduce that ethical dilemma. The remaining 20% of business companies are going to accept that culture in their business process. The business affiliation which doesn’t follow this ethical culture then that affiliation had to face legal clashes and ethical dilemmas chances in that affiliation would be more. Ethical dilemmas occur in a business affiliation when affiliation doesn’t follow that affiliation ethical culture which would create work clashes in that affiliations.

The business affiliation must be strict about their culture because when affiliation employee doesn’t follow their culture then they would create clashes that affect the reputation of that business organization. This work clashes would affect the affiliation development process and the strategy that affiliation had created would not work properly as that affiliation thought. This culture that had created by business affiliation would help the affiliation employees who work in the association to take decisions correctly which would increase affiliation stocks. The affiliation shall train its selected candidates about their culture before making its employees work in that company. It would diminish to solve the work clashes in a business association. Clashes in business affiliation would create trust issues between those business affiliation employees and which directly affected that association business.

The reputation of the business association in this business field is everything to the company as the stakeholder would be interested in that company which would have a good reputation in this stock market. When affiliation employee has good knowledge about their ethnic culture then they could decide within seconds which would right decision. It would help the business association to improve business productivity in this business market. The company assigned its work based on employee talent and ability. The disadvantages of this concept are it will make it difficult for the company to adjust to another organization because of every company’s different ethical concepts. When a business affiliation employee follows the rules and regulations of the company and completes their work following the rules then the whole company would be benefited. Dilemmas would create business affiliation losses in that association business process in this business world. Affiliation shall think methods to reduce this work clash.

Case Study of Diversity in ABC Company

Case Study Answers

Question-1 Why should ABC analyse existing practices in relation to diversity?

ABC should analyse existing practices in relation to diversity because neither company mission nor the current operational plan contains any detail for the implementation of the diversity which implies that all the benefits of the diversity that have been mentioned will not be reaped by the company so they should carefully examine their existing practices in accordance with diversity.

Question-2 Explain the benefits of diversity in ABC and how diversity relates to achievement of business objectives?

Following are the benefits of diversity in ABC: –

1) High degree of profitability: –

Representatives who communicate in various dialects or originate from abroad have exceptional aptitudes and encounters. Representatives from multiple foundations can present new arrangements and points of view that were beforehand obscure. When working with various groups, be that as it may, it is imperative to organize the representatives’ government assistance through legitimate pay and human services. These guarantees representatives feel sure about the organization, paying little heed to their experiences.

2) Exchange of assortments, thoughts, and collaboration

Every individual from the group contributes various thoughts and one of a kind critical thinking viewpoint. By having numerous personalities at the table, organization workers can tackle issues all the more rapidly and proficiently.

3) Learning and development

Being presented to new societies, thoughts, and points of view can possibly change the manner in which representatives think, work together with each other, and even influence one’s feelings of compassion. To be fruitful, an organization ought to endeavour to interest various populaces and situations. This social introduction considers wide-running customers and a superior open door for the organization to be effective.

4) Effective correspondence

Clients who communicate with delegates from his/her topographical zone or social childhood will cause the client to feel increasingly good with the agent and the organization itself.

5) Diverse experience

A various blend of abilities and encounters helps colleagues become progressively responsive and adjust to changing conditions without any problem.

By Following ways diversity relates to achievement of business objectives-

1) Various sentiment and viewpoints

Representatives with various foundations and encounters will unite an assortment of viewpoints, accordingly inspiring elective arrangements and approaches while talking about a point or issue. Whenever oversaw well, the qualities and best bits of knowledge of each individual can be saddled to elevate profitability and convey better outcomes.

2) Unity of assorted qualities

Decent variety likewise presents the chance to join specific qualities to the upside of the association. As each individual has various abilities and has fluctuating qualities, these can be joined for more noteworthy execution and profitability. Specialized attributes in a single individual can be merged with the administration qualities of another, and the business quality of one more.

3) The planning advantages

There is additionally a favourable functional position of having a different workforce. As people have special time responsibilities, having a changed gathering guarantees that work undertakings can be satisfied consistently throughout the year.

4) Makes organization appealing

From the commercial centre point of view, an organization that advances working environment decent variety and a comprehensive workplace adds to its appealing quality as a business. A working environment that is available to investigate new thoughts and styles is particularly engaging for the bold receptive representatives of Generation Y. If an association makes it realized that they centre around what people can bring to the table more than the up-and-comer’s financial foundation, ethnicity, and so forth, they are bound to pull in various scope of candidates.

Q-3 Why might it be a good idea to access and review diversity policies from organisations that are similar to the ABC?

It might be a good idea to access and review diversity policies like that of ABC organizations because these policies need to be updated from time to time. The meaning of diversity keeps on changing from person to person. For one, it may mean something, and for the other, it may mean something else. So, overall, it means that the policies have various benefits, as mentioned in the question. They need to be reviewed to have a check whether they are being followed or not, and if not, then what changes are required so that policies and their implementation are updated.

Q-4 What other sources of information might be useful? List 2 sources and briefly describe the information that might be collected from these sources?

The other sources of information that might be useful are: (i) Curriculum vitae of the candidate (ii) Government id-proof

From curriculum vitae, we will be able to gather information about the gender, educational qualifications of the candidate and from government id-proof, we can have information about the residence of the candidate so that we know what is the variation in diversity in the company so that talent of varied skills the organization possess.

Q-5 – Who should be consulted and involved in the development/ amendment/ improvement of diversity policies for ABC and why?

I think it should be the employee representative members of all the departments that should be consulted and involved in the development of diversity policies along with the higher authorities. A meeting should be conducted over this. The reason is that the employees on the ground level will be better able to tell what changes they need in terms of diversity in their organization.

Q-6 – Note and describe the steps that would be followed, after the initial research phase, to prepare a diversity policy and develop an action plan for the policy.

• As a manager my target would be to keep at least a mix of 50% diversity and every work division.
• I will choose a combination of a mix in age group (that will have somebody from the age of 45 and somebody in their 20s)
• Mix of creativity and experience also would be chosen.
• In the initial role out model I will roll out these changes temporarily and after evaluating the flaws and outcome the final diversified policy will be rolled out.

Q-7 – Diversity policy has been developed and finalized. What are the next steps? Consider tools, presentation, communication and stakeholders. Develop benchmarks and indicators to measure impact of policy implementation. Explain how to monitor business activities, team plans and staff performance to ensure diversity policy is effectively implemented.

• Once the policy is formalized, I will sit with the stake holders and with the help of flowcharts and intrinsic study analysis will show them how our new vision of diversification and inclusiveness is met.
• I will take to SPOC leaders from the various divisions and explain how we plan to implement the policy in phases.
• As a HR manager, since that my motive shall never be to force people, I will have meeting cum presentation with the employees, where I would address all their queries in this respect and also release a FAQ flyer. I will assure them that no change shall be mandatory for them and they could out of the policy freely at their own will.

Q-8 – Once the policy is implemented and has been operational for a period of time it will be necessary to review it. Explain why this is necessary, how it might be done and what might occur as a result of a policy review.

Of-course policy review is very critical. As mentioned above, the current policy has been revamped after a period of four years. We need to respect the fact that the dynamics keep rapidly changing and we need to inspect each and every aspect of diversification policy. We need to have critical reviews from those on who it has been implemented and how is it affecting the results of the company. Is it going in the upward direction as planned or is the other way round? Critical thinking is required. Satisfaction levels of the employees will also have to be looked into.

Analytical Essay on Establishment of Costco’s Association Culture

Costco has one of the most noteworthy degrees of association I’ve by and by seen in my 15 years of concentrating on issues of hierarchical culture. I trust it clarifies why Costco is America’s best business. How about we take a gander at the three components of vision, esteem, and voice and how they give the establishment of Costco’s Association Culture.

Impart a Motivating Vision With regards to an Association Culture, my partners and I characterize vision as having three sections: mission, qualities, and notoriety. The vision of Costco is that the association enables individuals to bring home the bacon, enables organizations to be progressively productive and serve clients better, and is a positive power in the networks where its stockrooms dwell. Costco’s qualities are summed up in the expression: ‘Dependably make the best decision, notwithstanding when it harms.’ Costco lives this out in the manner in which it steadfastly serves its individuals, the manner in which it treats representatives like family, and the positive things it improves the situation networks.

Esteem Individuals Esteem exists in a culture when individuals are esteemed as people as opposed to being thought of and treated as unfortunate obligation. Costco values individuals. Contrasted with contenders, it gives liberal remuneration and advantages to its representatives. Costco gives profession chances to its workers. The way that Costco’s senior administrators began chipping away at the forefronts in distribution centers is a demonstration of upward profession versatility. The employer stability Costco has given likewise demonstrates that it esteems workers as individuals.

Give Individuals a Voice Giving individuals a voice to express their thoughts and suppositions at that point thinking of them as is a third way Costco reinforces its Association Culture. Sinegal disclosed to me a tale about the time in Costco’s initial days when it was opening a distribution center in downtown Seattle and the neighborhood alcohol permit reviewer addressed everything. As the assessor’s request extended, Sinegal exploded at him, in disappointment. A partner of Sinegal’s must be sent to persuade the assessor that he had gone incidentally crazy. Thinking back, Sinegal wishes he could thank the examiner. His exhaustive addressing helped Costco turn out to be better arranged for what it would look forward amid its decades-long extension. Most importantly troublesome discussions and questions can be endowments in camouflage. Costco grasps this frame of mind of modesty and trustworthiness and that act makes the organization more astute and more grounded. Two different ways Costco keeps their representatives inspired. They just contract from inside the organization expect at the most minimal dimension. One of the greatest ways that Costco keeps its workers inspired is by procuring from inside the organization. This means when an administration position opens up the activity is just offered to a current Costco representative. This urges each worker to buckle down at what they do in light of the fact that they never know when they will be considered for advancement. I trust this would work great in inspiring representatives on the grounds that climbing inside the organization is a truly unmistakable objective. I think realizing that higher up positions will inevitably be offered to people in their position would enable a present representative to do everything they could to add and demonstrate their value each day.

My recognition of this case, Costco has no key issues confronting them right now. Their plan of action is engaging as in they have a fast stock turnover, working efficiencies, and benefit at an extremely low gross edge. Such achievement has come their way because of variables, for example, web deals, continuous exertion to cut costs, just stock deals, treasure-chase stock, no-bother merchandise exchange, and informal promoting. Costco involves a cost methodology that intends to enter valuing; and a preoccupation purchasing technique that gives a client a fortune chase shopping background. Of these procedures that Costco utilizes, the central components of low costs, restricted product offerings and determination, and fortune chase condition are simply the principle fixings that put over all contenders. Costco has solid and faithful enrollment among its clients and, additionally, an extraordinary workforce.

It exhibits an intriguing viewpoint on CSR. In a meeting with Costco’s executive of account, Richard Galanti, Gosin discusses how CSR can prompt a manageable upper hand. What I found fascinating is the means by which CSR was resolved. As indicated by Galanti, CSR is a perfect name for treating society, representatives and the earth legitimately. In the blog, Gosselin utilizes a meeting with Galanti to draw an image of how Costco utilizes CSR not as a promoting plan, however as a delicate demonstration of generosity. National paper as a socially dependable association. In any case, through this blog, I discovered that all socially dependable associations don’t utilize CSR as a showcasing plan. In spite of Costco’s absence of intrigue, they give a lot of help for the instruction of youngsters and their representatives. They are not just given 1% of pre-charge benefits every year yet additionally depend on elementary schools to advance training. Through this blog, I discovered that you cannot pass judgment on an association to cover it. The way that CSR isn’t distributed does not mean it doesn’t exist. REFERENCES Why Become A Member | Costco. (n.d.). Retrieved from https://www.costco.com/membership-information.html

Analysis of the Connection Between the Baby Boom and the Stock Market

The impact of a changing demographic structure on the price of financial assets, especially stock prices has been the subject of extensive research and discussion for some time (Quayes & Jamal, 2014). Data gathered from the U.S Census estimated there were 65 million US born baby boomers accounting for more than 20% of the US population in 2014 (Colby & Ortman, 2014). Thus, when we consider the vast stake the baby boomer generation have on the stock market, it is of no surprise it is questioned the impact this generation will have on stock prices while they begin to transition into the retirement phase of their lives (Shambora, 2006). Research suggests that the strength and the dramatic rise in the United States (US) stock prices, especially through the 1980s and 1990s (when baby boomers were in their peak savings) is predominantly attributed to the accumulation of assets from those of the baby boomer generation (Shambora, 2006). Therefore, as it is presumed when the baby boomers retire, they will divest themselves of the assets they have accumulated and liquidate their holdings, this will put a downward pressure on stock prices (Parker, 2001). It is important to understand the baby boomers’ presence in the stock market and examine the potential expected movement in stock prices which may arise from this generation entering retirement, as this can give individuals who are planning their anticipated retirement valuable insights on their projected capital longevity, as well as the policy makers behind social security reforms (Shambora, 2006).

When we define the baby boomer generation, they are described as the demographic cohort those born between 1946 and 1964 (Owram & Doug, 1997). Being that the baby boomers were born post war, they gained increased wealth and affluence, in comparison to any preceding generation due to the widespread post-war government subsidies in housing and education (Landon, 1980). Furthermore, given they were more active and physically fit than previous generations, amongst other variables this enabled them to peak in levels of income and benefit from superior retirement schemes, which thus generated a significant boom in the economy (Landon, 1980). Shambora (2006) suggest, as there is an increase in population “the number of consumers in their prime earning years require more imports, thus demand for domestic equity, more investment, thus supply of assets and demand for securities, thus higher securities prices”. In addition, frictions that challenge efficient market hypothesis suggest investor asset allocation. Investment advisors perpetually recommend an investment portfolio with 50% invested in fixed income and 50% investment in stocks given long standing rules that enforce this asset allocation (Benartzi & Thaler, 1995). This inflexible asset allocation strategy means that as new money becomes available for investment, a portion must be put into the stock market regardless of perceived aggregate value of the market. Despite this concept can create distortions between price and value of stocks, this further contributes to the natural accumulation of stocks for the baby boomers. This fits well with the idea that workers entering their prime earning years increase their savings and continue this pattern until retirement. Some of these savings are likely to be channelled into the stock market and thus creating an economy boom.

Whilst these factors and other variables this indeed may have motivated stock price increases; it is speculated this could also result in a drag in future stock price growth (Shambora, 2006). However, as it is suggested that the baby boomers in their prime age may accumulate their wealth especially through the stock market, when they come to retire, they will liquidate their savings and assets to supplement their retirement and as such convert their assets to fund consumption (Shambora, 2006). When we consider that equities are generally considered more risker than bonds, retirees may seek to sell their equities first, to preserve their capital for longevity which can in turn drive stock prices down (Shambora, 2006). Thus, this can present a downward pressure on asset prices (Parker, 2001). Because demand forces can determine securities prices, when a population demographic shift, such as when the baby boomers retire and liquidate their equities, this can create excess demand or supply for securities and in turn asset prices adjust to these market force, known as the meltdown hypothesis.

Shambora (2006) provides valuable research on such expected stock movement prices and his interest steams from the meltdown hypothesis. His research estimates that “although the baby boom glut may have indeed motivated stock price increases, they also will create a drag on future stock price growth and there will be a fall in asset prices when the baby boomers retire” as suggested by the meltdown hypothesis. Shambora (2006) argues that because Efficient markets hypothesis would have us believe that asset prices reflect only the current perception of firm valuation and that other factors will not affect the demand for or supply of securities and supply and demand therefore adjust simultaneously and immediately so that prices always reflect fundamentals, often in reality this can be somewhat untrue. He argues that because events continually test the rigidity of this theoretical price–value relationships, frictions can prevent the simultaneous adjustment of supply and demand and stock markets are viewed as only partially efficient because stock prices respond to a number of factors in addition to valuations based on fundamentals. Thus, he highlights the importance of the impact of the demographic shit the baby boomers transitioning into retirement will have on stock price because if efficient market hypothesis would have us believe that stock prices reflected only underlying value, the addition or subtraction of participants would have no effect (baby boomers liquidating their vast stake in the share market). Furthermore, we need to consider the change in various behavioral characterizes, such as risk tolerance (by liquidating equities into cash for readily available funds for consumption this reduces investors risk tolerance to elongate the longevity of capital through retirement). This part of Shambora (2006) research is important because if we considered that demand for equities were perfectly elastic, then underlying value would be the only factor affecting equity prices. Evidence suggests this is not the case and that investors change in asset allocation strategy is slow to change and that shocks to behavioral factors have a direct effect on stock prices and can often have a delayed reaction to the price of stocks.

Shambora (2006) extensive research uses a semi-structural vector autoregression model based on a simple conceptual framework of equity price determination is estimated. He does this in order to capture linear independences through multiple time serious and allow an evolving variable. Shambora (2006) identifies that through the baby boomers prime earning years their capacity to save increases and these savings are directed to the stock market. He notes that while baby boomers continue with this pattern it increases stock prices due to increased workers in the labor force. Furthermore, once they start to leave the labor force and stop accumulating this wealth this will send a downward trend on stock prices. Although, his research suggested there is no major impact initially to stock prices because of its slow and consistent digression this has far more serious effects and will create a slow evaporation of stock prices, rather than a meltdown. His motivating variable through his research is the impact of the baby boomers retiring at the same time. He funds that if 50% of baby boomers at age 65 retire this impact has a slow crawl of growth under that of historical benchmarks. However, he also funds that if 75% of the baby boomers retire when they turn 65 the index dramatically slows and will unravel stock prices for many years. Thus, retiring baby boomers will produce a drag on the market. If retires postpone the reduces the immediate effect however due to the greater numbers the unravelling of stock prices would go on for many years. The effect is more pronounced as more works switch to a leisure life.

Some of the stellar movements of the stock markets over the last 20 years has been due to the participation of the baby boomers and an opposite pressure will prevail when these baby boomers decide to retire. While it is suggested that when baby boomers retire there may be no immediate shock in prices, eventually the impact will create a very slow digression on stock prices. This is due for behaviors effect that have a slow onset to stock prices and that market efficient hypothesis cannot be solely relied on. Therefore, it is critical that when people are planning their retirement, they consider these effects as well as policy makers to consider if they need to review social security policies.

Essay on the Stock Market Crash of 1929: Causes and Effects

The Stock Market Crash of 1929 was very important and crucial to everything as during the times of the 1920s the U.S market itself actually was benefiting and profiting by immense numbers and statistics, making this inevitable crash worse than what it would’ve been, if things weren’t skyrocketing up the board.

Now stocks and their prices rose to levels that weren’t reached before, and because of this the general idea and practice of investing in stocks rose to an intense beneficial level that created some cause of worry, but overall was greeted with happiness as individuals are making good wealth; leaving it to be seen as a very easy and very quick way of making money. Due to this common people spent a considerable amount of their average disposable income and some even went to mortgage their house to purchase stock and try to increase the value of what they doubled down with. As stated, before the Stock Market Crash there wouldn’t been as big of a concern had it not been due to the popularity of stocks because at the end of the decade (1928) there were up to hundreds of millions of shares that were being carried on a margin, making the purchase price being made with loans in order to then have profits be repaid with an ever-increasing share price then came the dreadful decline that started in October 1929. Once this decline began millions of the already overextended shareholders started to panic and irrationally rushed themselves to liquidate their current holdings, however as they thought this to be benefiting themselves it instead increased the decline and cause panic to be more common spread leaving individuals to follow in the same footsteps, and come September and November these stock prices fell 33% (an incredibly dangerous %) and because of this drop it causes a problem of confidence in the current economy among the consumers however worse it was also spread among the businesses as well. This new lack of confidence problem led to consumer spending for durable goods, and business investments to be drastically reduced, then leading to a reduced amount of production industrially and in turn led to a heavy increase in unemployment.

The secondary point that came from this chain of terrible events was the bank panics and the dreadful monetary contraction that ensued. The problem actually occurred after the stock market crash but was directly correlated with it as it only happened 1 year later (1930-1932) starting off with four U.S banks having a large amount of their customers, fearful of their own bank solvency, all trying to withdraw all their deposits in cash. Looked at as irony as the frequent effect of this panic was about to bring the very crisis that these customers tried to protect themselves against, even large banks were threatened by this big panic. This panic and things have gotten worse as by 1933 one-fifth of the banks that existed in 1930 had failed, leading the new Franklin D. Roosevelt administrations to forcefully declare a four-day bank holiday (which having to be extended by three days due to the still concerning issues), during which all of these banks were to remain forced closed until these banks proved their solvency to government inspectors. One of the biggest problems being that due to the result of widespread bank failures there were intense decrease in consumer spending and business investment (even lower than before!) as there were fewer banks to lend money, and as one could imagine as there were fewer banks that means there was less to be lend (partly due to individuals hoarding their money in cash). Shamefully, instead of seeing this problem and deciding to do something smart and better things, the Federal Reserve exacerbated the problem by raising interest rates therefore further depressing lending and intentionally reduced the money supply with their strong belief that doing it would be necessary to maintain the gold standard.

Now, this gold standard was considered to be bigger than both the bank panics and the stock market crash as it spread outward to other countries. Now since during these times the United States was experiencing a continuously declining output along with a deflation in turn the U.S had to run a trade surplus with other countries as Americans were certainly buying way fewer imported goods, and due to this their exports were also very cheap. These imbalances had no choice but to give rise to a significant foreign gold outflow to the U.S which then threatened to devalue the currencies of countries whose gold reserves had been declining. To combat this these foreign central banks attempted to counteract this imbalance by skyrocketing their interest rates, which affected things by reducing their output and prices however while increasing unemployment in their countries. This resulted in international economic decline, the most prevalent being in Europe nearly as bad as the U.S.

Finally, there is also no consensus about the sources of recovery, though few factors also play an obvious role. In general, countries that abandoned the gold standard or devalued their currencies or otherwise increased their money supply recovered first (Britain abandoning the gold standard in 1931, and the United States effectively devaluing its currency in 1933). However, even after the recovery, there are still plenty of things that point to a possible return to that state, so it’s always our duty to ensure such a travesty never happens again.

China’s Stock Market and Its Effects

In today’s world financial assets are very valuable. A financial asset can be described as a liquid asset that gets its value from ownership claim. Examples of financial assets, according to James Chen, include: cash, stocks, bonds, mutual funds, and bank deposits (Chen). Imagine not having to work as hard but still being able to bring in a hefty annual income. The easiest way one can multiply their assets is to invest in the stock market. Nowadays there are many major stock exchanges one can invest in. While your average investor wouldn’t look past the United States stock exchanges, I think that investing in China’s market can make for an incredible asset to anyone. It is very important that everyone knows about China’s market and even more important if they’re thinking of investing in China’s market.

China is projected to pass the U.S. economy in the next decade. Not so long ago, China relied on bicycles as their main source of getting around and now China produces the most cars of any country. How did this happen? Well, their socialistic government has allowed the economy to develop capitalistic behaviors like consumer choice. This example of capitalism is very important to the economy. Consumer choice is why the U.S. market has boomed so much in the last year. Consumer choice allows citizens to buy whatever they want, for instance, many people want iPhones which makes apple a top company. Without consumer choice, companies could not gain capital. With China being fresh into consumer choice means big returns and big companies from China will start to emerge making them an ideal company to invest in. By adding consumer choice, China’s government really made a step in the right direction.

Another reason why their economy is growing is “because of the government’s planned urbanization of the country and massive investment in infrastructure, including commercial and residential skyscrapers, highways, airports, mass transit, and high-speed rail, among other components” (Bowman, 1). Urbanization is essential for any country. Just like back in 753 to 509 BC when Augustus Caesar built Rome. It brought everyone together and everyone could contribute to the economy. To build these massive infrastructures, it takes people to build them which creates jobs and always helps an economy. A city can be a center to where everyone can meet and where many businesses can grow. Like having large shopping centers and restaurants that many people occupy. A city is a symbol of human civilization; it is the people’s economic and political center.

Also, exotic infrastructures can lead to tourism. Tourism can create new jobs. It can help trade, income, and entrepreneurship – especially in small business (Chase). These small businesses can even gain humongous amounts of capital making them prime time investments. With that being said tourism can help a country’s gross domestic product (GDP) because tourists will buy stuff in that country.

China’s GDP growth rate is substantially bigger than the United States’ GDP growth rate. China’s GDP rate is forecasted to be at 6.1% for 2019 while the US’s economy is only suspected to grow 2.2% for the year (Lee, 1; Amadeo, 1). A good economy is a definite prerequisite for a good market, obviously, without a growing economy, you cannot have a rising stock market. For instance, when the GDP of a country is high, firms will be able to give out more jobs because they can afford to pay higher salaries. This can lead to consumers spending more money on products and utilities because more people will have sustainable jobs and will buy more products. This is the basic principle of a market. You need people to make money and then spend that money to keep the economy moving. Another thing people will spend money on when they have a sustainable income is buying shares of stocks in the market. Stocks are a basic supply and demand just like an ordinary product. If people want more oranges, then the price of the orange will increase. In change, if more people want to buy market shares, the market price of that share will go up. On the other end, if more people want to sell shares, the price will decrease. But, without the principle of a growing economy (a positive and high GDP rate) none of this can happen. China’s market is essentially better than the United States’ market right now because its economy is evolving faster and more consumers are more inclined to purchase products. A good example of this is in a younger demographic in China.

The world’s new generation, Generation Z (anyone born after 2000), spends tons of money online or value-added service revenue, but China’s generation is special. China’s Generation Z has the biggest kink to purchasing things online such as virtual gifts, virtual money for in-game currency. Just like supply and demand, more teenagers want video games and this can cause the price of new games to skyrocket. People will also be more willing to purchase these high-priced games because everyone wants them. This is also good for the economy because businesses can find ways to target this audience and make large amounts of revenue. It is really no wonder why China’s biggest businesses are social media companies, because of the fact that they mainly target Generation Z. A very big social media platform from China that everyone enjoys is Tik-Tok. Tik-Tok is owned by ByteDance, who is based in Beijing, China and they are a privately traded company which means no one can purchase a share of their stock. However, they are the highest valued private company valued at $75 billion (Zhong, 1). With a value that high means, they could go for sure go public soon which is great for an investor. Another great example of a big company in China is Tencent. Tencent has many big holdings in many popular games such as Fortnite and Clash of Clans, which many of my friends have spent tons of money on. Finally, another big dog is called We Chat. We Chat is basically a messaging system having 1 billion monthly active users. In summary, the USA hasn’t really developed that big of entertainment-related stocks, which is why China is already a step above the US.

In the article ‘90 Minutes a Day, Until 10 P.M.: China Sets Rules for Young Gamers China’s’ by Javier C. Hernandez and Albee Zhang, China’s largest gaming generates $33 billion in annual revenue drawing millions of users. The Chinese government has recently released new rules helping people with video game addictions, mainly younger people. These laws include of video games after 10 p.m. and no more than an hour and a half of gaming on weekdays. Another regulation announced by the National Press and Publication Administration bans users younger than 18 from playing video games between 10 p.m. and 8 a.m. This is planned because the government believes it is responsible for poor academic performance. But how does this affect the market? With Tencent Games being a big holder already it could possibly decrease the market value. Also, with the new regulations of keeping things like virtual items at only $57 a month. These regulations can cause protests from these big video game companies, consumers, and even shareholders (Zhang and Hernandez). Although it is what it is in China and they have to comply with the Government. With that being said their socialist government controls the market and can make changes like this that will affect the economy.

China’s government plays a huge role in their communistic economic system, unlike the United States’ capitalistic economic system. They have some policies similar to the United States despite having unlimited competition between privately owned businesses, they have adopted, the rules that govern a public company in China are different than those in the U.S. For instance, the Shanghai Composite Index is the biggest stock index in China’s market. It is down 40% over the past 10 years but this is because of their government. The Chinese government is very corrupt, which could ruin the Shanghai Composite Index, which is essentially the companies below it. Corruption in China presents business operating or planning to invest in the country with high risks. This can make investing in China’s market very hard because it is hard to tell what is doing well. The government is rigging the market so no one can really tell what is going on. The Chinese government led an anti-corruption campaign that led to many arrests and still influences the business environment. I think that even though China is in a terrible position with its government they can overcome this by just focusing on their strengths including their intellectual abilities.

A big topic that has been all over the news recently is the trade wars between the US and China. In the article, ‘Here Are 5 Cases Where the U.S. Says Chinese Companies and Workers Stole American Trade Secrets” by Paul Wiseman and Michael Liedtke. Back in 2017, The U.S. government started looking at the policies for China’s trade and concluded that the goods coming in from the U.S. to China compared to the goods coming in from China to the U.S was too great. The U.S. then imposed $250 billion in tariffs on China but in return, China issued its own tariffs with $110 billion U.S. imports. This backfires on both countries because companies would mainly have to pay for these extra taxes which would then cause them to upcharge their products. Consumers would then curb their spending and start buying different products. For example, China produces many Apple products and tariffs would cause consumers to stop buying Apple products hurting one of the biggest technology companies in America. Chinese consumers could also suffer in the same way as U.S. consumers because we could imply tariffs to their products which would up the prices for their consumers too. It’s a basic lose-lose scenario for everyone. The trade wars also affect the global economy as well because consumers from Europe to consumers in Africa could want these products as well (Wiseman and Liedtke).

Some can say that China is cheating. They are ripping off U.S companies (like Apple) and producing their own technology to sell for their own good (Wiseman and Liedtke, 1). Just like the United States has Apple, China has its tech giant company called Huawei. Federal prosecutors think that Huawei stole trade secrets from U.S. cell phone company T-Mobile and offered bonuses to employees who managed to swipe technology from other companies (Wiseman, 3). This is a very big problem because it is illegal in some countries. With intellectual property rules in the United States, citizens can’t just go around stealing others’ technology and selling it. Because of this, The Trump Administration proposed to China in order to end the trade war they want China to buy more American products and even tighten up their intellectual property rules. As of right now, China will not come through with the Trump administration’s proposal because just like us they want what is best for their country.

The trade wars also affect the stock market as well because prices rise for companies and fewer consumers will buy their products which mean no revenue for these companies. Also, some investors are scared of their own stockholdings in the market because the trade wars can have a huge impact on the market if it is not resolved soon. However, some companies have been seeing big returns in the last quarter during the midst of the war, the biggest stock exchange (Dow Jones) is up 20% in the last year. Right now, some stockholders are scared it is very much easier to get a bargain on some stocks and investors should be on the lookout for these. This happens because many investors are scared and will sell their shares. A company will then be at a low value which makes it a gold mine.

Financial assets can be very beneficial but it is important that investors know the market before they think about buying shares in the market. China’s government affects the stock market heavily which makes it important to be knowledgeable about recent news in China to know if new regulations can affect your investment. China’s market is on the rise with the new government policies and actually contributing to helping than regulating everything. With China’s GDP growth rate as high as it is, it helps the employment which overall helps their economy as a whole through consumer choice. It is very important that all citizens are informed about China and its stock market because it will affect our world in the future. With trade wars on the rise, there is a possibility that the United States economy could have a recession or even a Great Depression all over again.

References

1. ANTONS, CHRISTOPH, and KUI HUA WANG. “Well-Known Trade Marks, Foreign Investment and Local Industry: A Comparison of China and Indonesia.” Deakin Law Review, vol. 20, no. 2, July 2015, pp. 185–219. EBSCOhost, doi:10.21153/dlr2015vol20no2art519.
2. Amadeo, Kimberly. “What Will the Economy Do in 2019 and beyond?”. The Balance, The Balance, 5 Nov. 2019, www.thebalance.com/us-economic-outlook-3305669.
3. Bowman, Jeremy. “How to Invest in China Stocks.” The Motley Fool, The Motley Fool, 3 Aug. 2019, www.fool.com/investing/how-to-invest-in-china-stocks.aspx.
4. Chen, James. “The Money You Can’t See: Financial Assets.” Investopedia, Investopedia, 25 Nov. 2019, www.investopedia.com/terms/f/financialasset.asp.
5. Gad, Sham. “Investing In China.” Investopedia, Investopedia, 18 Nov. 2019, www.investopedia.com/articles/07/invest_china.asp.
6. John, Chase. “Importance of Urbanization.” UKEssays.com, www.ukessays.com/essays/economics/urbanization-is-an-important-factor-in-modernization-economics-essay.php.
7. Lee, Yen Nee. “China’s Economic Growth Could Fall below 6% in 2020, Says the IMF.” CNBC, CNBC, 21 Oct. 2019, www.cnbc.com/2019/10/21/chinas-economic-growth-could-fall-below-6percent-in-2020-says-the-imf.html.
8. “NATO / OTAN.” What Is NATO? www.nato.int/nato-welcome/index.html.
9. Stephen, Craig. “Here’s Why Everyone Needs to Care about China’s Stock Market.” MarketWatch, 8 Jan. 2016, www.marketwatch.com/story/why-chinas-stock-market-hurts-so-much-2016-01-08.
10. “Why China’s Tech-Savvy Millennials Are Quitting WeChat.” South China Morning Post, 24 July 2018, www.scmp.com/news/china/society/article/2156297/how-growing-privacy-fears-china-are-driving-wechat-users-away.
11. Wiseman, Paul, and Michael Liedtke. “Here Are 5 Cases Where the U.S. Says Chinese Companies and Workers Stole American Trade Secrets.” Chicagotribune.com, Chicago Tribune, 21 Feb. 2019, www.chicagotribune.com/business/ct-biz-us-china-trade-war-ip-theft-20190221-story.html.
12. Zhong, Raymond. “Bytedance of China Eyes $75 Billion Valuation, Joining Start-Up Giants.” The New York Times, The New York Times, 28 Sept. 2018, www.nytimes.com/2018/09/28/technology/bytedance-fundraising-toutiao-tiktok.html.
13. Hernández, Javier C., and Albee Zhang. “90 Minutes a Day, until 10 P.M.: China Sets Rules for Young Gamers.” The New York Times, The New York Times, 6 Nov. 2019, www.nytimes.com/2019/11/06/business/china-video-game-ban-young.html

The Dangers of the Worldwide Stock Market/Exchange

The worldwide stock market and stock exchange is an extraordinary concept in which users which include both individuals and companies alike both invest their money into different organizations, so in due time the amount of investment will increase. This world altering development was first implemented in the year 1602 by the Dutch East India Company, when they officially issued out the first ever documented paper shares, which allowed shareholders in the company, which are essentially the members of a corporation in which they own one or more shares in the companies stock to buy, sell, and trade their stock with each other and investors, which are people are people who input their own money into the stocks of corporations in hopes of future financial gain. This revolutionized the way both people and companies gained money. And one of the best things about the Stock Market is that you don’t necessarily be in any business in order to be a part of it. Anybody above the age of 18 can open their own private stock portfolio and even if you’re a minor and you’re interested in the buying and selling of stocks you can open a so-called custodial account with the permission of the custodial parents. But even though there are many positives of the stock market there are many negatives as well and some which could possibly land you in large amounts of debt or even long sentences in jail.

A very common danger of inputting money into stocks is the constant threat of the value of the stock dropping. Stocks may drop for a variety of reasons. One way which can be seen a lot in the news nowadays is due to customers intentionally refusing to buy the goods and services that a certain company is putting out. For example, the air transportation company known as Boeing has had significant and noticeable decreases in its stock due to two very tragic crashes of one of its most popular models the Boeing 737 Max in the last five months which has left hundreds of customers dead/ or injured. Due to these two crashes customers have since flown less with this plane model which has caused the company to lose a significant amount of revenue. And the loss of this money has caused shares in the company to drop leaving both shareholders and investors alike with less money. This then led to a chain reaction of events with the companies that manufactured the parts of the faulty planes because those companies also began obtaining scrutiny and caused them to also loss money due to the stoppage of production of those parts and the law suits that followed due to the crash. This can example can be seen with a lot of companies, while they not necessarily have to follow the same scenario, the outcome will still be the same. You can also look to the Recall of Romaine Lettuce in California late last year due to an outbreak of E.coli which had contaminated the lettuce causing many of the buyers who consumed it to become ill. The product was recalled, because of this the company lost money and adding on to that they had to pay the consumers that sued them because of it. Those factors where then linked to the loss of money in shareholders and inevitably the investors soon after. And falling stocks can happen at any time for any vast number of reasons. Big or small the decrease of stocks will always be a problem within the stock market.

Another common but something that goes as a virtually unnoticeable danger of the stock market is the manipulation within the stock market, which includes tampering of the market and insider trading of the stock market. Insider trading is the illegal act of trading on the public stock market for personal gain with the help of confidential/undisclosed information that the public themselves doesn’t have access to. This is illegal due to the fact that you’re using information that the public doesn’t have access to and illegal insider trading and laws to prevent them have been a part of the stock market since its beginning but many of them were created due to a crippling stock market crash in the year 1929. Due to this devastating crash the two acts known as the 1933 Securities Act and the 1934 Securities Exchange Act were created in order to prevent anymore stock market crashes due to insider trading. Insider trading is very serious crime due to the fact that it can affect a very large amount of people and because of this it can be come with some very hefty penalties. Those penalties include:

• The maximum prison sentence for insider trading is approximately about 20 years as of the year of 2013.
• The maximum fine for criminally fined individuals is currently set at $5,000,0000 as of the year 2013.
• The maximum fine for any non-natural persons (private or public organizations) is currently set at $25.000.000 as of the year 2013.
• The person or persons involved will have to forfeit all profits gained/ and or any loss of profit that was avoided.

A civil penalty may be placed upon the conducts violator which states that they may have to pay an amount from 1 to 3 times the profit gained or the losses avoided depending on the intensity of the violation.

There is also a significant ban depending on both who you are trading with and how much you trade. Some bans may just be for less than 90 days and some may be a permanent ban from trading stock all together.

Even though there are these penalties for anyone proven guilty of insider trading people are still occasionally caught. They take the risk due to the high rewards of the crime and since it’s difficult to track. The most recent case of recorded insider trading was from Chris Collins who was formerly a board member of an Australian pharmaceutical corporation. He passed on private company information that would affect stocks to his son, who passed that information to his father-in-law. With that information they traded away the stock which ended up making them avoid a potential loss of approximately $768,00. As a result, 2 of the three men are still under criminal investigation and face indictment.

The most threatening thing imaginable in stock market and the world economy alike is the threat of complete stock market crash. A stock market crash is a sudden dramatic decrease in stocks across a very large portion of the stock market resulting in the decline of worth of paper currency. Probably the most commonly used example of a stock market crash used throughout history is Stock Market Crash of 1929, the Great Crash, or Black Tuesday. During this time that followed WW I many areas of industrial production became sluggish even with the increased population of citizens moving into the city. This caused investors to rapidly sell their stocks. They were warned many times by the Federal Reserve, but the stock market still continued on. This then resulted in a complete stock market crash resulting in a loss of approximately $30,000,000,000 in the span of 2 days alone. This then led to the largest financial crisis of the 20th century known as the Great Depression and was instantly felt in all markets around the world excluding Japan. The Great Depression caused widespread poverty around many areas of the United States and close to 15,000,000 people were put out of jobs because the jobs could no longer afford to pay them since they also struggled with money. Many citizens had to get food at government run soup kitchens and used stamps to buy grocery rations instead of actual money because the value of paper money at the time was so low. The Great Depression destroyed many lives, jobs, and businesses and plagued America for years after its initial start. And this is all due to the crash of the stock market in a time which is less wealthy and economically involved. So, if a large enough stock market crash was to happen today, the repercussions would be worldwide.

The dangers of the stock market will always be apparent. Nothing can be done to completely get rid of them. All that can truly be done is to make laws making it more difficult for people to actually do these illegal acts and having extra precautions just in case they happen again so the world economy will stay stable.

References

1. https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929#Background
2. https://www.sec.gov/Archives/edgar/data/25743/000138713113000737/ex14_02.htm
3. https://www.foxbusiness.com/features/chris-collins-and-other-high-profile-insider-trading-cases
4. https://knowledge.wharton.upenn.edu/article/why-insider-trading-is-hard-to-define-prove-and-prevent/
5. https://www.nytimes.com/interactive/2019/business/boeing-737-crashes.html
6. https://www.foodsafetymagazine.com/news/cdc-declares-romaine-lettuce-e-coli-outbreak-over/
7. https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/money-banking-and-investment/insider-trading

Major Participants in the Indian Stock Market

Part of the objective of Securities and Exchange Board of India is to hold requirements for truthful and orderly markets. In order to help gain this goal, the Securities and Exchange Board of India regulates a range of stock market participants. These encompass the following:

Stock Exchange

An inventory alternate is an organized market that brings all the investors or merchants together. It enables the sale and buy of shares through unique shoppers and sellers. Most of the trading in Indian stock market takes region on BSE and NSE. These inventory exchanges implement strict policies and guidelines that listed agencies and buying and selling individuals should follow.

Listed Companies

Also regarded as issuers, these are the businesses whose shares are traded on the stock exchange. All the listed agencies go via Initial Public Offering (IPO) and register themselves with the inventory trade after abiding through all the prescribed regulations.

Stock Brokers

Stock brokers are licensed by using the Securities and Exchange Board of India and are entitled to exchange at the inventory exchange. They act as the middlemen or dealers between the agents and the customers of stocks in the inventory market. For presenting these broking services, they obtain buying or selling fee from their clients.

Investors

Investors are additionally referred to as stockholders or shareholders. These are the people who personal the shares of businesses that are listed on the stock exchange. They are entitled to get hold of dividends and different benefits due to shareholders.

Clearing House

Clearing Houses are entirely owned subsidiaries of Securities and Exchange Board of India. They are formed to make sure the orderly settlement of trades done on a range of inventory exchanges. Clearing Houses settle the dollars and switch shares based on day-to-day transactions between sellers and buyers.

Transfer Agents

Transfer Agents report modifications of ownership of shares. They furnish the listed agencies with a list of its protection holders. Transfer marketers are also accountable for cancelling or issuing of certificates and distribute dividends.

Settlement Banks

The settlement banks perform the characteristic of accepting the credit score of dollars for price of stocks bought with the aid of an investor or verify payment of money when due. These banks debit or credit score the investor’s account throughout agreement and additionally file balances and different statistics as may be required.

Depository

A depository refers to an organization or an organization that assists in the buying and selling of securities. This group also holds securities in digital shape or in dematerialized form. One of the fundamental functions of the depositories is to transfer the ownership of shares from one investor’s account to any other when an exchange takes place.

Thus, each inventory market participant has a specific role to play in the suitable and easy functioning of the stock market.