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Famous Business StrategiesEither simply a looker-on or a player in the world of business, you see millions piling into the accounts of world's most famous businessmen and naturally the question pops "How?", wondering what is the alchemy they've discovered? Yet, there is no magic here - it's mostly pure strategy. And what it takes to spot it and make it real. Strategy Identifying the best strategy for your business is the key to all success. It should give you the lift that makes a difference. The art for your strategy success is planning.
Vision It is all there, it is all important, but first there is the vision. So, is vision a spark, is it a moment? How much is inspiration and how much hard work? Is it 99% perspiration and only 1% inspiration? Can we all be geniuses? According to Edison's theory I would say yes, if we are committed to hard working, as it is primarily the hard work that makes a genius. Inspiration comes on the way, when involved in as much action as you can handle. Contrary to the conceptual meaning, inspiration seems to be driven by propitious conditions - in this case, by work. Hard work So, what really happens behind the fairy-tale success stories is usually not what some would expect - a brilliant, extraordinary, never heard of discovery that changed the world, but, disappointingly enough, plain hard work. What these people have is what I would call "industry intelligence". How is it acquired? Working of course. That is, sharply aware of their industry environment, learning all the rules and deeply involved in their own businesses, success people have at some point of activity a vision for their business that proves to be a winner - the revelation naturally produced as a result of their work commitment. Let's take the example of three American legends: Sam Walton, Warren Buffet and Bill Gates. What do they have in common? The winning vision, the winning strategy. Sam Walton In the case of Sam Walton, no new, innovative business models were launched. He followed the existing low-price retailing pattern but the competitive successful strategic approach was that instead of focusing on large cities he took his business to small towns becoming the low-price leader in rural towns. Warren Buffet Warren Buffett's success resides in his different approach to value investing. While usually investors look for stocks they believe undervalued by the market, Buffett does not take into consideration the stock market aspects, such as for instance the supply and demand ratio. He analyzes the stocks on the basis of their potential as companies. He is interested in long-term results, such as ownership in companies with capacity of generating money, namely, companies with a strong name, great historical results, strong management and industry expertise. Bill Gates Neither is the case of Bill Gates to have made extraordinary innovations. Rather than innovation, he had the ability to put together other people's ideas, thus producing big hits and making a profit. He did that first when adjusting BASIC programming language for the Altair 8800 (first PC) - neither of which was his original creation. Then, the same happened with DOS, which Microsoft bought (the original version was QDOS) and adjusted. Business strategies implementation Then, action comes. As the saying goes, planning without action is futile, action without planning is fatal. It takes guts to act boldly and take whatever risks are necessary to put your vision into practice. It takes a great deal of tenacity to surpass obstacles and get over unfortunate happenings on the way. So, how did they implement their planned strategies? What was the outcome, what principles resulted for them to base their businesses on? Warren Buffet For the implementation of his strategy, Buffett has drawn his company choice principles, involving a great deal of analysis of business, management, financial aspects and a great deal of patience, waiting for the right price once the possible investment has been identified. On businesses
On management
On financials
On stock valuation
Success depends on the investor's dedication to learn and follow the principles. Sam Walton He gives his ten rules for success in the book "Made in America, My Story":
Bill Gates Microsoft's corporate mission "A computer on every desk and in every home" shortly became a reality. Offering an easily accessible operating system for computers, perceiving the importance of customizing their product to the ordinary client and not only to computer engineers and thus addressing masses, Bill Gates succeeded in putting together and promoting towards a tremendous popularity (and profit accordingly) the world's dominant operating system. What these people have in common is nevertheless an extraordinary ingenuity: they innovated their industry domain, building their own strategy tailored for their own business particularities and went further to its implementation. Other articles by this author »
About Laura Ciocan
Laura Ciocan writes for http://www.businessplanning.ws where you can find more information about what is a business plan Please feel free to use this article in your Newsletter or on your website. If you use this article, please include the resource box and send a brief message to let me know where it appeared. Contact: lauracio@gmail.com. Related
And here is another random article you might be interested in... Don't Overpay for a House, Even in Today's MarketIf there's one thing American investors love, it's an over-inflated market. Which is why they keep buying houses and new ones keep coming onto the market. According to the latest data, housing starts rose an annualized 3.4% in September, matching a 17-year high. Whoo-ha! Go, baby go. I wonder if the people buying these houses, for ever-rising prices, are the same people who couldn't get enough Amazon.com stock at $100 or Lucent shares for $75? Having been burned in the stock market, I guess they decided to re-invest what was left in their homes. Are we in a housing bubble? I don't know, but I suspect that we are, at least in some areas of the country. Don't misunderstand me, now. I own a home, and I think home ownership is one of the great freedoms we enjoy in this country. I get nervous about the people who are pulling all the equity out of their homes with new mortgages. I suspect that most of these people are spending the equity, not investing it. What they're left with is a larger mortgage, and a bunch of worthless Chinese made goods. The current low-interest rate environment is a once-in-a-lifetime chance to lock in a cheap 30-year mortgage on your home. If you refinance the balance of your current mortgage, you've won. If you refinance, and max out on your equity, you're probably hurting yourself. You might say that by refinancing the equity in your home, you're just cashing in on your home's rise in value. Well, not exactly. What you're really doing is collateralizing the portion of the house that you own to get a cash loan, with the intention of paying back the loan at a later date. You've really transferred ownership of the equity in your house to your lender, not cashed it out. If you want to cash out your equity, you have to sell your house, plain and simple. For those who are buying new homes, the low interest environment is a double-edged sword. On the one hand, you can get a tremendous rate on a 30-year mortgage, the likes of which you see once in a lifetime. On the other hand, because we live in a world where the monthly payment is all that matters, lower interest rate mean higher home prices. The monthly payment stays the same, but now you've got a much higher mortgage balance, which could turn around to bite you in the future. The dangers of refinancing the equity out of your home are readily apparent, but why shouldn't you buy a home in the current environment? I'm not saying you shouldn't. What I'm saying is you have to be careful. Most real estate professionals understand that the monthly payment matters, not the price of the house, when selling a house. Therefore, the lower interest rates fall, the more money can be charged for a house. If you're a home buyer, with a set amount of money for a downpayment, the price of the house will determine how much equity you start with. And, it determines whether you get a conventional mortgage, with 20% down, or some other form with less downpayment. That equity percentage will determine whether you'll be paying for the great rip-off known as Private Mortgage Insurance (PMI). Trust me, it's just another monthly payout that goes down a giant rat-hole. There's no value in PMI, and you don't want to pay it. For the sake of argument, let's assume that you won't be paying any PMI. Now, let's compare two neighbors, with identical houses, who have the same monthly payments on thirty year mortgages. The first neighbor has a $100,000 mortgage at 10% interest, the second has a $146,000 mortgage at 6%. You may think this is extreme, but I can tell you that this is what has happened in my neighborhood over the last 5-7 years. The type of house I'm living in retailed for under $100,000 in 1999, and retails now in the $130,000's. Back to our example. Both of our neighbors are paying about $875 per month on their mortgage. Now let's suppose that both of them decide to pay extra on their mortgages, upping their payments to $1,100 per month. Both neighbors are reducing their principal balances by $225 more per month, and here's where the first neighbor has the advantage. The balance on the $100,000 mortgage goes down much quicker than the $146,000 mortgage, such that while the first neighbor is paying more in interest every month than the second neighbor, by sometime in the seventh year, neighbor one is actually paying less in total interest. Neighbor one will pay his house off in a little over 14 years, while neighbor two will take about 18 years to pay off. In this example, we don't even take into account the possibility that neighbor one could refinance the balance on his mortgage when interest rates decline. This would lower his required payment, and allow him to pay off his house even faster. In the meantime, the "market value" of his house has risen to about what neighbor two paid ($146,000). When neighbor one decides to sell his house, he'll walk away with a lot more cash. Obviously, this is a simplified example, but one that has been occurring over and over again in the last few years. I know that it's expensive right now to buy a house, no matter where you go. What do you do in this situation? I recommend looking for, and buying, a home that needs some work. You should look for houses that are selling at about 80% of the average market value in a neighborhood. These houses will generally need only cosmetic work, and maybe a few minor repairs, but you'll save on the price of the house and have extra equity right off the bat. Stay away from houses that need plumbing or electrical work, unless you know someone that will fix it for free. Those fixes cost big bucks, and will eat up much of the savings on the price of the house. Buy the house, make the cosmetic changes, then have it re-appraised. You'll be surprised at how much the "value" of the house has gone up. (I put value in quotes because the only real way to judge the value of a house is to sell it. An appraisal is simply an estimate of value.) This will also help you get rid of the PMI, if you didn't have the 20% downpayment, because once the balance of your mortgage falls below 80% of your appraised value, you can petition to get rid of the PMI. Houses can be investments, and like any investment it takes a work to find good value. But it can be done. Other articles by this author »
About Christopher Mallon
Chris Mallon is the editor and publisher of the Undervalued Weekly, a free personal finance and investment newsletter dedicated to creating smarter investors. To sign up for the Undervalued Weekly, send e-mail to underval@hot-response.com,
or sign-up through the website at www.dynamicinvestors.net/index7.html. Related
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