Strategic Analysis & Planning Essay Example | Topics and Well Written Essays - 2750 words

Strategic Analysis & Planning - Essay Example It is best practiced from top to bottom to facilitate proper information and by understanding the direction towards which the organization wants to move, as is the case of Microsoft. Discipline in the execution of strategic analysis is highly regarded since through it the organization will achieve its goals. Though no known formula has been developed to help in strategic analysis and planning, certain principles ought to be followed concisely to succeed. They are; analysis of current situations, core competencies analysis, and key success factors, business unit strategy, among other principles. By analysing such factors, business objectives are bound to be achieved. Strategic Business Units, commonly referred to as SBUs, are distinct organizations that are part of the main organization as is this case for Minecraft, that pursue their own objectives and mission and are fully functional. They report their activities to the parent company’s headquarters. They act independently with a specific market target to increase profitability and appeal to consumers, which are always tied at the hip. They improve the performance of the parent organization and augment the customer base. In this case, Microsoft’s acquisition of Minecraft is meant to consolidate the gaming community ascribed to Minecraft and secondly expand its profitability. Some analysts argue that with the large game community of Microsoft’s Xbox and its diversity as a different sort of player, then millions of gamers will be attached to Microsoft’s products and what that means is profitability. With the SBU in mind, the evaluation of these levels of strategic ana lysis and planning is important. Different levels of analysis exist which include: These steps are to be discussed into details showing how each step could help Microsoft in its new acquisition, how to consolidate that market and what should be done and how it ought to be done so that the SBU in Minecraft is

Security Analysis and Portfolio Management Assignment - 1

Security Analysis and Portfolio Management - Assignment Example 358). For the stock market perspective, the absolute investment returns are gaining more fame lately due to the start of mutual funds aiming at absolute return objectives. In contrast, traditional mutual fund aims at producing smart relative investment returns as compared to the suitable benchmark. Absolute returns facilitate profitability in most periods and acts over an extensive range of market conditions. Beta measure reduces the risks during the determination of return and risk on stocks and portfolios. Use of beta coefficient in stock selection requires comparison with the market. The investor, therefore, construct the portfolio by drawing the relationship between beta coefficient and the prevailing market prices. Betas carry with them high risks, and markets with negative betas may withstand the fluctuations in market prices. Despite betas helping in stock selection, its effectiveness assumes that movement in the market requires careful analysis of positive and negative direct ions. Also, beta approach assumes analysis of historical considerations for future prediction. As a result, when portfolio selection fails in accurate reading of the market movements, the resulting portfolio selection is incorrect. This method requires a high degree of precision. On the other hand, the alpha parameter indicates the return on security at zero market return. Positive alpha indicates bonus return while negative alpha indicates an undesirable penalty to the investor (Carter & Howard 1990, p. 81-85). Absolute return investing pursues the returns independent of the traditional benchmark and is unconstrained. This means that it uses the modern tools like the hedging strategies in reducing the investors’ risk. Absolute return acts as the modern strategy that pursues the target returns with reduced volatility than relative performances. This enhances the diversification of portfolios for all types of investors (Edwards & Alfons 2004, p. 143). Benchmark Indexes Investo rs establish a long term wealth in stocks due to historical tract record of their positive performance. Most traditional mutual funds constrain the manager to invest in domestic markets. However, the absolute return strategies are less constrained. The objective of absolute return removes constraints on managers and allow for the implementation of more strategies to address the market volatility. For instance, the relative performance may allow for investment in all sectors, but have a high likelihood of influence by benchmark index weightings of other sectors. This is because any divergent can result into risk. This compels the traditional funds take on a market exposure. On the other hand, the pursuit of absolute returns reduces the risks by managers when undertaking a full market exposure (Fornell 2006, p. 3). Traditional Benchmarks When compared to relative performances, absolute returns are independent of the traditional benchmarks. The measurement of funds in absolute returns does not involve the market indexes. Rather, their measurement takes place alongside their return goals. This enhances the removal of constraints on investment managers. The absolute return does not involve any incentive of making the funds appear similar to securities index. This provides greater incentive to prevent risk caused by negative returns (Fornell 2006, p. 4). Inflation The absolute return objective focuses on the elementary concerns of an investor to help achieve a