The Banco Compartamos, a leading microfinance debuted in Mexico with 30% of its capital stock. Compartamos demand exceeded supply by 13 times, was able to channel 30% of trading in the giant Mexican market on that day and picked up $ 470 million to open. Some of those who closely followed that day was the traditional banks, who are closely following how the first to enter the business of short-term loans not exceeding $ 1,000 are filling up with money in their pockets. And they also want to enter.
A survey of Latin American Banking Federation (FELABAN) and the Inter-American Development Bank shows interest in microfinance, with 63% of 85 banks from 19 countries in the region believed to enter the business loans of between $ 500 and U.S. $ 1,000 is attractive. While money seems small, eight out of 10 banks consider financing of small and medium enterprises is a strategic area of their business and 90% believe the economic outlook is encouraging, which will directly benefit small businesses.
The appeal of microfinance ls grew also because their results have improved the stability of the economy. ”They had grown recently, but now with a more stable economy, the curve is reversed,” said Enrique Castillo, president of the Association of Banks of Mexico. In this country, for example, the most active banks are Banorte, with Pronegocio, HSBC, with Financiera Independencia, and Banamex, with Family Credit. Continue reading »
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Carry out a merger or acquisition is inherently difficult. And things get even worsewhen executives do not want to see that they are assuming false premises. The authors identify biases that may arise in each step of a merger or acquisitionprocess and provide tips for avoiding them. This is an approach known as”unbiased”.
Prejudices abound during the research phase of an investment. To overcome them, look for evidence to question their initial assumptions about the business. The best medicine for those who are overconfident in identifying revenue and cost synergiesis to learn from previous cases. To avoid underestimating the cultural differences between his company and the company to be acquired is necessary to understandthe differences in how people interact with each organization.
It is very common miscalculated the time and resources. But this can be avoided by identifying best practices and reviewed regularly. Finally, it can dilute the conflicts of interest when requesting an external audit. The stage of tenders is vulnerable to the “winner’s curse”, a phenomenon common in auctions. To avoid overpaying for a company, this business several alternatives to consider and develop a set of rulesof closure.
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Lately things are not going well in your business. He has lost several clients andothers, paid late. Their bank accounts are consumed quickly and you’re afraid of not being able to make payroll next month. The increasing difficulty in obtaining creditsmall problems makes them difficult to handle. But if we take into account these caveats, we can avoid falling into the abyss.
Evaluate liquidity and have a daily report of cash available, the status of accounts receivable and the inputs and outputs. If the balance remains negative, the situation is not sustainable. If your accounts payable are getting older, obviously in trouble. If you need to borrow much money or use credit card to make payroll … to dosomething now.
For problems of moderate to severe liquidity, follow these four steps before giving up:
1) Cut costs strategically: Stop at every expenditure and say, “If I reduce this, I still in business or not?”. Be careful not to cut services to cut their benefits.
2) Lose customers to boost profits: Getting rid of the most delinquent could reduce the number of employees and operating expenses.
3) Give up payments: Take enough to eat and pay taxes, and leave the rest to the company. If the situation is desperate, its employees propose to waive the payment of one week. If you have a serious plan to bail out, many do not give up.
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There is a growing trend in industry mergers and acquisitions: search assets hit by the crisis at low prices, to grow and consolidate businesses. Already during the fourth quarter of 2008, there were 348 mergers and acquisitions, a 5% increase over 2007 and average reduced by 47%. An example is Bienes Turgon, an unknown company in Monterrey, with only $ 17 million acquired the entire unit’s exhaust system auto parts giant Delphi, with plants in Europe, South Africa, India, USA, Australia and China, becoming The overnight in one of the industry leaders.
It is an ideal market, but only for companies with ample liquidity and low debt covenants, as the credit lines are cut and you need cash to take advantage of the tempting offers. The virulence of the crisis in Latin America, makes the attention of many companies is more on how to protect and survive, which continue to grow.Other and expanded its production capacity in recent years and feel no need to acquire other companies in your industry. Some, however, have adopted an aggressive stance, seeking to exploit opportunities arising from the crisis. Those who had a conservative financial management over the past five years and have enough liquidity, they are now able to take advantage of the bargains that may arise.
The best deals in Latin America may be in the industry of retail and other sectors hit by the crisis. In Mexico, buying opportunities are emerging in the automotive, durable goods, in companies related to the production or sale of luxury goods and even real estate. There will be good opportunities in companies with financial pressures incurred in financing operations in 2008 did not seem aggressive, but with current market conditions themselves are and will be forced to restructure, and eventually liquidate some of its assets.
Many companies choose to invest in organic growth rather than making an acquisition. In a solvency crisis like the present, more companies are locked in reducing costs, cutting its capital spending to a minimum to preserve liquidity, reduce debt and strengthen its business position while waiting for better conditions in the market. Continue reading »
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Companies are always looking for new sources of competitive advantage that are difficult to copy and valuable in the market. A new possibility is emerging is that the “management model” is a source of competitive advantage, on par with what traditionally has been called the “business model”. While “business model” is the answer to “what” and the “why” of a company, the “management model” is the answer to “how.” What is the business model and which model of management, are the two most important questions that must be done about your business.
The “management model” is the decision taken by senior management on how to define the objectives, motivate effort, coordinating activities and allocating resources. In other words, is how they define the work of management. Many companies are discovering that having a “management model” one can be critical to their competitiveness.
An example is Happy Computers Ltd, London-based IT training. Here, managers are selected based on how good they are managed and evaluated openly by their subordinates. A new employee never asked their credentials are selected by how well they respond to feedback on their style of training. Errors are celebrated and customer satisfaction is the only indicator of performance used. The company has a 98.7% satisfaction, sell their courses to double from its competitors and has doubled its profits while industry has shrunk by 30%. Its success can not be explained solely in terms of good products or services, nor has a unique business model. The company has succeeded because its founders have decided to think creatively about their management model, taking unusual choices on it, they have had a dramatic impact on the quality, responsiveness and cost of their services.
The management literature includes luminaries such as Henri Fayol, Mary Parker Follett and Chester Barnard. But in the last 30 years has been directed, not towards the management, but to the leadership – the characteristics and behaviors that we do deserve to follow us. It is time to balance the trend, and focus more on management, how to work through others, managing the daily work. Most people need to be leaders and managers, but for every 10 books on the market on leadership, case management is one over.
After reviewing the management literature, the investigation led to distinguish four sets of activities and ways how are you can take:
The nature of the objectives of the organization, managers have a clear set of objectives are short term or oblique path through the definition of higher-level objectives and long term.
How to motivate individuals to achieve these objectives: management tries to recruit and retain people by engaging external rewards (salary, benefits, bonuses) or focus on intrinsic rewards (such as the opportunity to contribute to society, be made or to be recognized by their peers).
How to coordinate the activities: managers focus on management processes, well-structured formal or informal foster coordination processes and spontaneous, with mutual adjustments.
How are decisions: managers take personal responsibility for decision making, relying on their experience and knowledge, or prefer to use the diverse knowledge of his subordinates and assign collective responsibility.
Simplifying the sizing model management, we identified four generic management models: Continue reading »
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Produce more by working less is the key to raising living standards, but in the short term there is a tension between efficiency and jobs. United States and Europe have handled this differently. The American economy shrank by 2.5% last year, but the hours worked fell twice, and productivity (GDP per hour) rose by 2.5%. The average fall in GDP in the 15 countries from the EU was 4.2%, but the hours worked fell less than in the United States and productivity declined by 1.1%. In the United States there were more job losses: 3.6% last year, against 1.9% in the EU. One explanation for this contrast is that the GDP figures in U.S. are overvalued, so could lower GDP, narrowing the gap with Europe. Another view is that United States firms panicked and quickly eliminated jobs. Also because there are easier and cheaper to lay off workers in Europe.
Workers in the United States that were dismissed so easily, may not be rehired so quickly. After the 2001 recession, the increase in demand was solved with increased productivity, partly the result of an earlier excess capital expenditures in Information Technology (IT). Although these charges collapsed in 2000, firms are still looking for how to apply the capacity in which both invested. This will become increasingly difficult as the last real estate boom was, and there is an equal opportunity to an explosion of productivity “retarded”, but the recession has shown that it can maintain operations with fewer personnel. And if productivity falter, demand could be fitted with a slow first hour will offer more part-time employees.
The shock of the recession may persist for a long time in Europe. The decline in productivity raises wage costs, hurting profits and cash flow, leading to a prolonged hiring freeze and some layoffs forced. The poor earnings will damage investment and consumption will be restrained by fear of layoffs. But in time, productivity is essential to improving living standards and while lowering the fraction of working-age adults in the population, depend more on her to guide the growth of GDP.
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The contractors on the battlefield are about 240,000 employees supporting the United States missions in Iraq and Afghanistan with security, military and police training, logistics and air support, recreation and other services such as food, clothing and hygiene of the troops, which brings them about $ 100 billion annually.Some have faced high-profile scandals, for reasons ranging from neglect and overcharging, even abuse of prisoners and killing civilians. Defense Secretary Robert Gates seeks to reduce these external services, but there is too much dependence on them. In this business came in 1996, Robert McKeon and Thomas Campbell, two good friends who in 1992 founded his own company buying and selling companies, Veritas Capital. With a fund of U.S. $ 175 million formed a management company (McKeon and Campbell 62.5%, 37.5%) and after some beneficial defense agreements in 2002 it rose by U.S. $ 153 million, divided equallysociety.
His purchase in 2005 of DynCorp International, the largest provider of services to United States military, put them in the center of business and shattered their relationship. After a most advantageous acquisition, McKeon took for themselves the investment opportunity, getting a quarter of DynCorp and shares for U.S. $ 270 million, while Campbell was disadvantaged. However, he joined the Board with McKeon, who served as president. With the conflicts in Iraq and Afghanistan on the rise, DynCorp prospered, and today 53% of its revenue comes from the battlefields.Campbell was fired two years ago and founded his own DC Capital Partners, a company like Veritas, supported by several investment groups, which is in the business of capture and data mining and evaluation of cellular traffic from satellites, in addition to the wiring buildings in Iraq and Afghanistan, and hopes to compete with DynCorp police training contract.
DynCorp won a contract in June to five years for $ 915 million for air transport and the safety of United States diplomats. Last year, achieved the greatest prize: the Programme for Increasing civil Logistics (LOGCAP), which includes all services required by the troops and generates narrow profit margins, but large and steady income that the company expects to underpin much of Short-term growth. And in July he won, for a period of five years, U.S. $ 5.9 billion for support services in southern Afghanistan. But all is not positive. The State Department is investigating the drug abuse of their employees in Afghanistan and they have a complaint as a sport shooting against unarmed Afghan children. Also, the deterioration of security in that country has affected them, they must move people and equipment by air, leading to delays and higher costs.
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