GLG News Analysis

What have in common Bill Gates, Steve Jobs and Michael Flatley?

October 17, 2010

This analysis is solely the work of the author. It has not been edited or endorsed by GLG.

Summary

Value added, Cost and Pricing

Analysis

Although their activities of these personalities are very different in execution, there are several factors or characteristics that have led to success in life in them. One of them is having a clear vision of what they want despite the circumstances or obstacles that of course has never been lost. With persistence and perseverance have achieved their objectives. Another important point in common is innovation, which have managed to excel and always be at the forefront internationally. Finally, we highlight the ability to reinvent them and adjust to new events or circumstances of life. From the above and to be consistent with the facts, then to do this there must be a little analysis of the various factors that have been present in undertaking them. Speed in Business: There is an old saying that says "The only constant is change." In this sense, it is vital to keep up to date information and to anticipate changes. Steve Jobs, has always known to be present with new innovations. From the beginning, has been able to quickly confront new threats that have emerged placing cutting-edge products worldwide. Strategies: Success is not just luck, but it is the consolidation and implementation of sound strategy efficiently. Every entrepreneur, you want in your company to grow steadily and become increasingly profitable you must do this. Therefore, to do this, there are various strategies. Strategy Cost (To be leader in costs), this strategy does not speak necessarily to reduce costs to compete and lower the quality of the product, but to reduce costs to invest into more efficient processes to operate a business without affecting the quality of a product and not affecting profits, improved profitability and greater margin to set a competitive pricing policy. Value Added Strategy, it is very important to know the attributes that people perceive when purchasing a product or service. Through this strategy and to the extent that we must know the needs of customers, it is natural that the price is higher than normal. So obviously, we generate better profits and profitability and pricing strategy, an appropriate choice of this strategy is very important in the process of fixing wrecks and setting up guidelines and limits for the initial pricing and prices during the product life cycle. Strategic Analysis of a company is of vital importance, as prior to any project. First of all, we understand the then Geopolitical, economic and environmental surroundings must be well know. It is also important to know our strengths, weaknesses, opportunities and threats, Profitability, Return over the investment, is a concept that allows us to measure the gains to be obtained in a particular situation. In this regard, as has been mentioned many times, that if we have a business with less than 3% return is better to invest in mutual funds or put it in the bank. The idea is to always invest in businesses with higher returns than 40% to make it really attractive. Solvency and liquidity, solvency speaks of the ability to cope with short-term obligations with respect to short-term assets of the company. Liquidity has to do the same but with fast cash to pay inmidiatly their assets, i.e. the ability for immediate payment. It is very important to have clear these concepts, since we do not want to affect directly the profitability and loss in the control in any given company. Conclusion The final challenge is to understand and identify the factors that allow us to be successful. In this sense, Bill Gates, Michael Flatley, Steve Jobs and the 500 most successful companies in the world Forbes index, has built and integrated into its activities the strategies listed above. Chief among these is investment in added value, allowing them to have a clear differentiation from competitors. This obviously makes a big difference when incorporating a pricing policy, which will result in higher profitability. There is also the concept of having the ability to be flexible before the changes and adapt so quickly to the circumstances. In this regard it is noteworthy that it is always important to have a clear vision of objectives and progress towards them despite the obstacles.

By Bernardo Javalquinto
Economist
University of Maryland