Top Investment Banks - FT List

Top 10 Banks	($m)	vs. Prev Period*	M&A	Equity	Bonds	Loans
JP Morgan	5,931.29	+10%	20 25 31 25
Bank of America Merrill Lynch	5,455.47	+22%	18 22 30 29
Goldman Sachs	4,791.85	+20%	32 32 24 12
Morgan Stanley	4,174.06	+13%	26 33 30 12
Citi	3,809.59	+7%	20 25 37 18
Deutsche Bank	3,421.03	+6%	16 24 38 23
Credit Suisse	3,327.84	0%	21 28 30 22
Barclays	3,294.17	+5%	22 22 33 23
Wells Fargo	2,136.43	+15%	9 19 38 33
RBC Capital Markets	1,901.07	+7%	23 18 28 31
Total	78,678.70	+6%	27 22 27 23

10 ways telecom can make money in the future a.k.a. telecom revenue 2.0

LTE roll-outs are taking place in America and Europe. Over-the-top-players are likely to start offering large-scale and free HD mobile VoIP over the next 6-18 months. Steeply declining ARPU will be the result. The telecom industry needs new revenue: telecom revenue 2.0. How can they do it?

1. Become a Telecom Venture Capitalist

Buying the number 2 o 3 player in a new market or creating a copy-cat solution has not worked. Think about Terra/Lycos/Vivendi portals, Keteque, etc. So the better option is to make sure innovative startups get partly funded by telecom operators. This assures that operators will be able to launch innovative solutions in the future. Just being a VC will not be enough. Also investment in quickly launching the new startup services and incorporating them into the existing product catalog are necessary.

2. SaaSification & Monetization

SaaS monetization is not reselling SaaS and keeping a 30-50% revenue share. SaaS monetization means offering others the development/hosting tools, sales channels, support facilities, etc. to quickly launch new SaaS solutions that are targeted at new niche or long tail segments. SaaSification means that existing license-based on-site applications can be quickly converted into subscription-based SaaS offerings. The operator is a SaaS enabler and brings together SaaS creators with SaaS customers.

3. Enterprise Mobilization, BPaaS and BYOD

There are millions of small, medium and large enterprises that have employees which bring smartphones and tablets to work [a.k.a. BYOD - bring-your-own-device]. Managing these solutions (security, provisioning, etc.) as well as mobilizing applications and internal processes [a.k.a. BPaaS - business processes as a service] will be a big opportunity. Corporate mobile app and mobile SaaS stores will be an important starting point. Solutions to quickly mobilize existing solutions, ideally without programming should come next.

4. M2M Monetization Solutions

At the moment M2M is not having big industry standards yet. Operators are ideally positioned to bring standards to quickly connect millions of devices and sensors to value added services. Most of these solutions will not be SIM-based so a pure-SIM strategy is likely to fail. Operators should think about enabling others to take advantage of the M2M revolution instead of building services themselves. Be the restaurant, tool shop and clothing store and not the gold digger during a gold rush.

5. Big Data and Data Intelligence as a Service

Operators are used to manage peta-bytes of data. However converting this data into information and knowledge is the next step towards monetizing data. At the moment big data solutions focus on storing, manipulating and reporting large volume of data. However the Big Data revolution is only just starting. We need big data apps, big data app stores, “big datafication” tools, etc.

6. All-you-can-eat HD Video-on-Demand

Global content distribution can be better done with the help of operators then without. Exporting Netflix-like business models to Europe, Asia, Africa, Latin-America, etc. is urgently necessary if Hollywood wants to avoid the next generation believing “content = free”. All-you-can-eat movies, series and music for €15/month is what should be aimed for.

7. NFC, micro-subscriptions, nano-payments, anonymous digital cash, etc.

Payment solutions are hot. Look at Paypal, Square, Dwolla, etc. Operators could play it nice and ask Visa, Mastercard, etc. how they can assist. However going a more disruptive route and helping Square and Dwolla serve a global marketplace are probably more lucrative. Except for NFC solutions also micro-subscriptions (e.g. €0.05/month) or nano-payments (e.g. €0.001/transaction) should be looked at.

Don’t forget that people will still want to buy things in a digital world which they do not want others to know about or from people or companies they do not trust. Anonymous digital cash solutions are needed when physical cash is no longer available. Unless of course you expect people to buy books about getting a divorce with the family’s credit card…

8. Build your own VAS for consumers and enterprises – iVAS.

Conference calls, PBX, etc. were the most advanced communication solutions offered by operators until recently. However creating visual drag-and-drop environments in which non-technical users can combine telecom and web assets to create new value-added-services can result in a new generation of VAS: iVAS. The VAS in which personal solutions are resolved by the people who suffer them. Especially in emerging countries where wide-spread smartphones and LTE are still some years off, iVAS can still have some good 3-5 years ahead. Examples would be personalized numbering schemas for my family & friends, distorting voices when I call somebody, etc. Let consumers and small enterprises be the creators by offering them visual  do-it-yourself tools. Combine solutions like Invox, OpenVBX, Google’s App Inventor, etc.

9. Software-defined networking solutions & Network as a Service

Networks are changing from hardware to software. This means network virtualization, outsourcing of network solutions (e.g. virtualized firewalls), etc. Operators are in a good position to offer a new generation of complex network solutions that can be very easily managed via a browser. Enterprises could substitute expensive on-site hardware for cheap monthly subscriptions of virtualized network solutions.

10. Long-Tail Solutions

Operators could be offering a large catalog of long-tail solutions that are targeted at specific industries or problem domains. Thousands of companies are building multi-device solutions. Mobile &  SmartTV virtualization and automated testing solutions would be of interest to them. Low-latency solutions could be of interest to the financial sector, e.g. automated trading. Call center and customer support services on-demand and via a subscription model. Many possible services in the collective intelligence, crowd-sourcing, gamification, computer vision, natural language processing, etc. domains.

Basically operators should create new departments that are financially and structurally independent from the main business and that look at new disruptive technologies/business ideas and how either directly or via partners new revenue can be generated with them.

What not to do?

Waste any more time. Do not focus on small or late-to-market solutions, e.g. reselling Microsoft 365, RCS like Joyn, etc. Focus on industry-changers, disruptive innovations, etc.

Yes LTE roll-out is important but without any solutions for telecom revenue 2.0, LTE will just kill ARPU. So action is required now. Action needs to be quick [forget about RFQs], agile [forget about standards - the iPhone / AppStore is a proprietary solution], well subsidized [no supplier will invest big R&D budgets to get a 15% revenue share] and independent [of red tape and corporate control so risk taking is rewarded, unless of course you predicted 5 years ago that Facebook and Angry Bird would be changing industries]…

Refer: http://telruptive.com/2012/03/26/10-ways-telecom-can-make-money-in-the-future-a-k-a-telecom-revenue-2-0/
 

Priciing Strategies

Marketing - Pricing approaches and strategies

There are three main approaches a business takes to setting price:

Cost-based pricing: price is determined by adding a profit element on top of the cost of making the product. 

Customer-based pricing: where prices are determined by what a firm believes customers will be prepared to pay

Competitor-based pricing: where competitor prices are the main influence on the price set Let’s take a brief look at each of these approaches;

Cost based pricing

This involves setting a price by adding a fixed amount or percentage to the cost of making or buying the product.  In some ways this is quite an old-fashioned and somewhat discredited pricing strategy, although it is still widely used. 

After all, customers are not too bothered what it cost to make the product – they are interested in what value the product provides them.  

Cost-plus (or “mark-up”) pricing is widely used in retailing, where the retailer wants to know with some certainty what the gross profit margin of each sale will be. An advantage of this approach is that the business will know that its costs are being covered.  The main disadvantage is that cost-plus pricing may lead to products that are priced un-competitively.

Here is an example of cost-plus pricing, where a business wishes to ensure that it makes an additional £50 of profit on top of the unit cost of production.

Unit cost	£100
Mark-up	50%
Selling price	£150

How high should the mark-up percentage be? That largely depends on the normal competitive practice in a market and also whether the resulting price is acceptable to customers.

In the UK a standard retail mark-up is 2.4 times the cost the retailer pays to its supplier (normally a wholesaler).  So, if the wholesale cost of a product is £10 per unit, the retailer will look to sell it for 2.4x £10 = £24.  This is equal to a total mark-up of £14 (i.e. the selling price of £24 less the bought cost of £10).

The main advantage of cost-based pricing is that selling prices are relatively easy to calculate.  If the mark-up percentage is applied consistently across product ranges, then the business can also predict more reliably what the overall profit margin will be.

Customer-based pricing

Penetration pricing

You often see the tagline “special introductory offer” – the classic sign of penetration pricing. The aim of penetration pricing is usually to increase market share of a product, providing the opportunity to increase price once this objective has been achieved.

Penetration pricing is the pricing technique of setting a relatively low initial entry price, usually lower than the intended established price, to attract new customers. The strategy aims to encourage customers to switch to the new product because of the lower price.

Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume.  In the short term, penetration pricing is likely to result in lower profits than would be the case if price were set higher.  However, there are some significant benefits to long-term profitability of having a higher market share, so the pricing strategy can often be justified.

Penetration pricing is often used to support the launch of a new product, and works best when a product enters a market with relatively little product differentiation and where demand is price elastic – so a lower price than rival products is a competitive weapon. 

Price skimming

Skimming involves setting a high price before other competitors come into the market.  This is often used for the launch of a new product which faces little or no competition – usually due to some technological features.  Such products are often bought by “early adopters” who are prepared to pay a higher price to have the latest or best product in the market.

Good examples of price skimming include innovative electronic products, such as the Apple iPad and Sony PlayStation 3. There are some other problems and challenges with this approach:

Price skimming as a strategy cannot last for long, as competitors soon launch rival products which put pressure on the price (e.g. the launch of rival products to the iPhone or iPod).

Distribution (place) can also be a challenge for an innovative new product. It may be necessary to give retailers higher margins to convince them to stock the product, reducing the improved margins that can be delivered by price skimming. A final problem is that by price skimming, a firm may slow down the volume growth of demand for the product.  This can give competitors more time to develop alternative products ready for the time when market demand (measured in volume) is strongest.

Loss leaders

The use of loss leaders is a method of sales promotion.  A loss leader is a product priced below cost-price in order to attract consumers into a shop or online store. The purpose of making a product a loss leader is to encourage customers to make further purchases of profitable goods while they are in the shop.  But does this strategy work?

Pricing is a key competitive weapon and a very flexible part of the marketing mix.

If a business undercuts its competitors on price, new customers may be attracted and existing customers may become more loyal. So, using a loss leader can help drive customer loyalty.

One risk of using a loss leader is that customers may take the opportunity to “bulk-buy”.  If the price discount is sufficiently deep, then it makes sense for customers to buy as much as they can (assuming the product is not perishable).

Using a loss leader is essentially a short-term pricing tactic for any one product.  Customers will soon get used to the tactic, so it makes sense to change the loss leader or its merchandising every so often.

Predatory pricing (note: this is illegal)

With predatory pricing, prices are deliberately set very low by a dominant competitor in the market in order to restrict or prevent competition.  The price set might even be free, or lead to losses by the predator.  Whatever the approach, predatory pricing is illegal under competition law.

Psychological pricing

Sometimes prices are set at what seem to be unusual price points.  For example, why are DVD’s priced at £12.99 or £14.99? The answer is the perceived price barriers that customers may have.  They will buy something for £9.99, but think that £10 is a little too much.  So a price that is one pence lower can make the difference between closing the sale, or not!

The aim of psychological pricing is to make the customer believe the product is cheaper than it really is.  Pricing in this way is intended to attract customers who are looking for “value”.

Competitor-based pricing

If there is strong competition in a market, customers are faced with a wide choice of who to buy from. They may buy from the cheapest provider or perhaps from the one which offers the best customer service.  But customers will certainly be mindful of what is a reasonable or normal price in the market.

Most firms in a competitive market do not have sufficient power to be able to set prices above their competitors. They tend to use “going-rate” pricing – i.e. setting a price that is in line with the prices charged by direct competitors.  In effect such businesses are “price-takers” – they must accept the going market price as determined by the forces of demand and supply.

An advantage of using competitive pricing is that selling prices should be line with rivals, so price should not be a competitive disadvantage.

The main problem is that the business needs some other way to attract customers.  It has to use non-price methods to compete – e.g. providing distinct customer service or better availability. 

Refer: http://www.tutor2u.net/business/gcse/marketing_pricing_strategies.htm

Ten ways to become resilient

1. Understand that Setbacks are Part of Life
Life is not always cozy and fun. It is also characterized by complexity and challenges. They belong to life like the night is part of the day. Without night there would be no day. Without pain there would be no joy. While we often cannot avoid all the problems, we can choose to stay flexible, open-minded, and determined to succeed.

2. Be aware of Yourself and the Environment
Resilient people are aware of themselves, the environment, and their own emotional reactions to those around them. They have understood the importance of evaluating the reasons of their feelings by constantly observing themselves. This enables them to take control of the situation and to develop various options of behaving and acting.

3. Believe and know that You are in Control
If you are a resilient person, then you have a so-called Internal Locus of Control. You believe that you can control your life, you do not believe that you are defined by external factors which you can´t control. Instead, you feel that you have the power to make choices and take actions that will affect your success rate.

4. Become a Solution Thinker
When a difficult situation arises, resilient people would always think of solutions. They would act calmly, would review holistically the task at hand, and would be able to spot possible solutions. If not, they would envision them. Next time you encounter a new challenge, make a quick list of some of the potential ways you could solve it. Experiment with different strategies and focus on developing a logical way to work through it.

5. Believe in Yourself
You are unique. You are beautiful. You have proven already so often in life that you are an achiever. Remind yourself of your strengths and accomplishments. Believe in yourself and become more confident about your own abilities and strengths.

6. Set Goals and define manageable Milestones
Difficult situations can be extremely daunting. Resilient people are able to view these situations in a realistic way, and then set reasonable goals to deal with the problem. When you find yourself becoming overwhelmed by a situation, take a step back to simply assess what is before you. Brainstorm possible solutions, and then break them down into manageable steps. Be willing to adapt, if necessary. Remain flexible and embrace change.

7. Stay optimistic
Keeping a hopeful attitude during turbulent times is another key part of resilience. This does not mean ignoring problems at hand in order to focus on positive outcomes. It means understanding that setbacks are transient and that you have the skills and abilities to combat the challenges you face. What you are dealing with may be difficult, but it is important to remain hopeful and positive about a brighter future. View yourself as winner, not as a loser.

8. Be brave and ask for Help
Resilient people are mature enough to admit that they can´t know everything. They are also strong enough to admit, if they feel that their energy level is going down and that they need to re-charge their batteries by receiving outside know-how, advice, support, etc. from any potential source of assistance. In this respect it helps if you have a good social network. If you can exchange with family, friends, or colleagues in order to gain new perspectives and/ or motivation.

9. Take it easy
Even the best among us will not be able to achieve everything. Even if they are properly prepared, have done their homework, can rely on an excellent support network, are super optimistic, and absolutely committed. There are still factors outside of our control. And, most importantly, often things just need time to evolve and to develop. Resilient people understand that sometimes the best recipe of success is to step back and to wait. They know that patience often pays off. They do not get stressed out in such situations. Rather they relax, re-focus on themselves and getting ready for possible next steps.

10. Nurture Yourself
When you're stressed, it can be all too easy to neglect your own needs. Losing your appetite, ignoring exercise, and not getting enough sleep are all common reactions to a crisis situation. Focus on building your self-nurture skills, even when you are troubled. Make time for activities that you enjoy. By taking care of your own needs, you can boost your overall health and resilience and be fully ready to face life's challenges.

SPSS tutorial: Questionnaire data entry - your questions answered

SPSS for newbies: questionnaire data entry

Using SPSS Modeler to segment customers in a Telco scenario

Enterprise Data Types

All business enterprises have three varieties of physical data located within their numerous information systems.  These varieties of data are characterized by their data types and their purpose within the organization.

 

• Transactional Data

• Analytical Data

• Master Data

Transactional data supports the daily operations of an organization (i.e. describes business events). Analytical data supports decision-making, reporting, query, and analysis (i.e. describes business performance). While master data represents the key business entities upon which transactions are executed and the dimensions around which analysis is conducted (i.e. describes key business entities).
Transactional data supports the daily operations of an organization (i.e. describes business events). Analytical data supports decision-making, reporting, query, and analysis (i.e. describes business performance). While master data represents the key business entities upon which transactions are executed and the dimensions around which analysis is conducted (i.e. describes key business entities).

Transactional Data

Transactional data are the elements that support the on-going operations of an organization and are included in the application systems that automate key business processes. This can include areas such as sales, service, order management, manufacturing, purchasing, billing, accounts receivable and accounts payable. Commonly, transactional data refers to the data that is created and updated within the operational systems.  Examples of  transactional data included the time, place, price,discount, payment methods, etc. used at the point of sale. Transactional data is normally stored within normalized tables within Online Transaction Processing (OLTP) systems and are designed for integrity.  Rather than being the objects of a transaction such as customer or product, transactional data is the describing data including time and numeric values.

Analytical Data

Analytical data are the numerical values, metrics, and measurements that provide business intelligence and support organizational decision making. Typically analytical data is stored in Online Analytical Processing (OLAP) repositories optimized for decision support, such as enterprise data warehouses and department data marts. Analytical data is characterized as being the facts and numerical values in a dimensional model. Normally, the data resides in fact tables surrounded by key dimensions such as customer, product, account, location, and date/time. However, analytical data are defined as the numerical measurements rather than being the describing data.

Master Data 

Master data is usually considered to play a key role in the core operation of a business. Moreover, master data refers to the key organizational entities that are used by several functional groups and are typically stored in different data systems across an organization.  Additionally, master data represents the business entities around which the organization’s business transactions are executed and the primary elements around which analytics are conducted. Master data is typically persistent, non-transactional data utilized by multiple systems that defines the primary business entities. Master data may include data about customers, products, employees, inventory, suppliers, and sites. 

Refer: http://bi-insider.com/posts/types-of-enterprise-data-transactional-analytical-master/
 

Value Stream Mapping

Value stream mapping is a lean manufacturing or lean enterprise technique used to document, analyze and improve the flow of information or materials required to produce a product or service for a customer. Full definition.
———-
Value stream mapping is a paper and pencil tool that helps you to see and understand the flow of material and information as a product or service makes its way through the value stream. Value stream mapping is typically used in Lean, it differs from the process mapping of Six Sigma in four ways:
1) It gathers and displays a far broader range of information than a typical process map.
2) It tends to be at a higher level (5-10 boxes) than many process maps.
3) It tends to be used at a broader level, i.e. from receiving of raw material to delivery of finished goods.
4) It tends to be used to identify where to focus future projects, subprojects, and/or kaizen events.
———-
A value stream map (AKA end-to-end system map) takes into account not only the activity of the product, but the management and information systems that support the basic process. This is especially helpful when working to reduce cycle time, because you gain insight into the decision making flow in addition to the process flow. It is actually a Lean tool.
The basic idea is to first map your process, then above it map the information flow that enables the process to occur.

Tony Buzan (Mind Mapping) - How To Make the Most of Your Creative Mind :...

What is the difference between accounting and finance (and economics)?

Accounting:

Accounting is the preparation of accounting records. This includes measuring, preparation, analyzing, and the interpretation of financial statements. Accounting is also often referred to as the voice of business, the language of business, and the heart of business. Mostly because the financial documents derived from the accounting preparation are widely used among managers, investors, tax authorities, executives, and many others to see how the company is performing.

Bookkeeping is the method used to record all the financial transactions, essentially the day to day accounting operations. Luca Pacioli is often referred to as the “father of accounting” because he was the first to publish a book regarding the double entry method of bookkeeping. If you ever heard of debits and credits, those are bookkeeping terms.

There are many governing bodies and organizations. The International Accounting Standards Board (IASB) governs the general globe. Many countries often adhere to their own standards as well. Here in the United States, the Generally Accepted Accounting Principles (GAAP) guides the accounting field and its profession. Some characteristics of GAAP are Relevance, Timeliness, Reliability, Comparability, and Consistency. Accounting can further breakdown in sub-categories like Tax, Corporate, Audit, Management, and even Financial Accounting.

Finance:

Finance covers a huge array of subjects, but the three main terms when comparing to accounting would be: (1) the study of money and capital markets which deals with many of the topics covered in macro economics (2) management and control of assets and investments, which focuses on the decisions of individual and financial and other institutions as they choose securities for their investments portfolios, and (3) managerial finance (business finance) which involves the actual management of the firm, as well as profiling and managing project risks.

Managerial finance is probably the most important to all types of businesses, whether they are public or private, deal with financial services or are manufacturers. Managerial finance also involves analyzing the performance of the firm in order to forecast its future performance. It involves making decisions regarding working capital issues such as level of inventory, cash holding, credit levels, etc.

Economics:

Economics has two sections, microeconomics and macroeconomics. Microeconomics is study focusing at the firm level, while macroeconomics focuses more at the policy and regulatory levels. Accounting uses principles to justify many of its actions, while Economics uses assumptions to simplify a situation. Many economics decisions as based on certain assumptions. When the assumptions don’t hold then the specific decision may also be affected.

The key principles for economics are opportunity cost, diminishing returns, the marginal principle, spillover, and the reality principle.

Refer:http://thefinancepig.com/2008/03/21/what-is-the-difference-between-accounting-and-finance-and-economics/

Operations - Competitive Priorities (AKA Process Performance Objective)

1. Cost
2. Quality

•  Consistent Quality - On-specification Product
•  Top Quality - Superior Design / Durability etc.,

3. Time (Speed & Dependability)

•  Quick Delivery
•  On-Time Delivery - Important requirement for Just-In-Time (JIT)
•  Time-to-Market for New Product or Service Development and to market the same.

4. Flexibility

•  Customization
•  Variety
•  Volume Flexibility

Operations Strategy - Competitive Priorities

What is the difference between preferred stock and common stock?

Preferred and common stocks are different in two key aspects. 

First, preferred stockholders have a greater claim to a company's assets and earnings. This is true during the good times when the company has excess cash and decides to distribute money in the form of dividends to its investors. In these instances when distributions are made, preferred stockholders must be paid before common stockholders. However, this claim is most important during times of insolvency when common stockholders are last in line for the company's assets. This means that when the company must liquidate and pay all creditors and bondholders, common stockholders will not receive any money until after the preferred shareholders are paid out.

Second, the dividends of preferred stocks are different from and generally greater than those of common stock. When you buy a preferred stock, you will have an idea of when to expect a dividend because they are paid at regular intervals. This is not necessarily the case for common stock, as the company's board of directors will decide whether or not to pay out a dividend. Because of this characteristic, preferred stock typically don't fluctuate as often as a company's common stock and can sometimes be classified as a fixed-income security. Adding to this fixed-income personality is the fact that the dividends are typically guaranteed, meaning that if the company does miss one, it will be required to pay it before any future dividends are paid on either stock.

To sum up: a good way to think of a preferred stock is as a security with characteristics somewhere in-between a bond and a common stock.

Fortune 100 - Vision & Mission

Understanding the fundamental difference between Mission and Vision is critical to anyone aspiring to become a business leader. I found the following presentation with the Fortune 100 companies vision & mission statements. Please click the below.

Fortune 100 - Vision & Mission Statements

Financial Ratios

Pleae click the link ---> Financial Ratio Analysis Spreadsheet

What is Strategic Planning, Really?

Overview of the Strategic Planning Process

Project Planning with Sticky Notes