Why do people with a strong background in Finance always make it to the top? Even in non-financial companies!

Posted on October 15, 2017Categories Short term programmes   Leave a comment on Why do people with a strong background in Finance always make it to the top? Even in non-financial companies!

Finance is what makes the World go round. This sentence may not be literally true, but it still holds a lot of weight World over. Finance is what you need to do anything in the World. Every single thing that we can imagine- starting a company, recruiting people, innovation, research & development, marketing, sales, etc. they all need capital/ finance. Getting funds for all of this is what matters. The companies which do not focus on their finances are the ones that become bankrupt.
Due to the indispensable nature of finance, finance professionals are always trained to think like bankers and investors, .i.e. to think like people who are funding them or will be funding them. A finance professional is the one who instills the discipline required to manage a company professionally in order to ensure that it pleases its customers and its investors at the same time.
A great example for highlighting this is Kraft Heinz. In September 2017, they appointed David Knopf, a 29 year, old as the Chief Financial Officer of Kraft Heinz. Mr. Knopf has been with Heinz since 2015 and has handled budgeting and financial planning for many of its brands. He is also a partner at the Billion Dollar Private Equity Fund 3G Capital.
He is said to have been a key person for the $45 Billion merger of Heinz with Kraft and also the $11 Billion buyout of Tim Hortons by Burger King. It is his ability to go through every single transaction, plan the finances of brands, invest well and impress investors and bankers that make him an attractive choice to lead the company. This skill set makes him an important voice on the board. It is truly a remarkable achievement for someone so young to lead a behemoth with an illustrious history.
Most shareholders focus on someone with a finance background as your company may sometimes run into bad weather and may be forced to turn to capital markets and banks for funds to run your operations or to expand your operations.
Gaining such a lot of knowledge in a short period of time is difficult. One needs to learn from the best, work with the best and stay connected with the best in order to achieve what Mr. Knopf has achieved. BSE Institute Ltd (BIL) offers a short term course for working professionals and students to grow and learn from experts in the world of BFSI. You can know more by clicking here.
David Knopf has surely set a high bar for all those hoping to learn and grow fast, but it certainly isn’t impossible. Having the right knowledge and being present at the right place and at the right time can surely help you achieve much more than him.

Why are Mergers & Acquisitions the best way to grow a company?

Posted on October 14, 2017Categories Short term programmes   Leave a comment on Why are Mergers & Acquisitions the best way to grow a company?

Sir Martin Sorell, the most influential advertising mogul, who employs over 205,000 people in over 2,500 offices in 107 countries across the globe is the living proof of how acquisitions can help you scale up your business and let you be the high priest who rules the industry.
The WPP group (Wire & Plastic Products) is a conglomerate of advertising agencies, which initially was started as a shopping basket manufacturer, but soon became a Marketing & Advertising behemoth when Sir Martin Sorrell came on board as its Chief Executive. Sir Martin Sorrell was a respected financial guru even before he joined WPP. After joining WPP, he acquired 18 BTL ad agencies in a short period of 3 years.
In the year 1987, he did the unthinkable, by taking over JWT for a staggering $566 Million. In 1989, he again did what others thought was impossible – acquisition of Ogilvy & Mather for $825 Million. In the year 2000, he again acquired Y&R, Omnicom and the Grey group. With these major agencies under his belt and a few other market research and P&R agencies, WPP is one of the most influential Marketing & Communications group in the World. The amounts mentioned are staggering considering the very few Billion Dollar deals that happened back then. WPP has a revenue of over UK Pound 14.4 Billion. This makes them the largest group in terms of the billables that they send to clients. Every major company in the world uses their services.
The reason for us sharing this example is to highlight the fact that WPP was never a strong ad agency in terms of its creative bent of mind. It actually built its creative & financial muscle through financial discipline. It managed to keep its finances in check and was able to leverage this to buyout much larger companies than itself. This allowed it build its business straight away without worrying about recruitment, client acquisition and other headaches that a company usually has. This allowed the acquired companies to function as they have normally done without any changes (barring a few at the top) and has allowed them to focus on doing what they do best – great advertising.
The acquisition gave the WPP group access to a lot of the funds that these companies have and thus focus exclusively on growing other companies that can be taken over or other group companies that need support. Thus, the senior management is able to solely focus on core activities that help the group grow, while a team is also in place to manage the daily operations.
These are the advantages of a well planned merger & acquisition strategy. There are many such examples in history which prove M&As as the best way to grow your sales, employees, geographical footprint and your financial prowess.
The best way to scout for such lucrative deals and the best way to finance them is to be in touch with the right people. Networking and learning is the best way to do this and doing it at the heart of Mumbai is a sure shot way to move ahead. BSE Institute Ltd (BIL) offers a short term course in M&As.
Mergers are tough to crack and one needs a large team of lawyers, bankers and CAs to get the deal completed. Only and only through a thorough study of the industry can one achieve it.
Once completed – Sky is the limit and you can be the next Media Mogul!

Most powerful person in the World? Bet your money on a Venture Capitalist!

Posted on October 13, 2017Categories Short term programmes   Leave a comment on Most powerful person in the World? Bet your money on a Venture Capitalist!

The most powerful person in the World is not really an elected public servant! It will most probably be a person from Finance, probably a Private Equity Banker or an Investment Banker or a Venture Capitalist! It may be tough to believe, but this is the harsh reality of life. An elected official may control the largest army in the World, but it is the VC who controls the companies that make and sells guns to those armies. A Head of a state may control the economic levers of an economy, but it is the VC who owns major stakes in large business corporations, that ultimately have a huge impact on the economy.
A Venture Capitalist is someone who wants to multiply his money at a rapid pace and is willing to take huge risks for it. Investing in traditional investment options like Govt bonds, stocks, tax-free bonds, etc. give a very low rate of return as compared to investing in businesses that are growing very fast or are poised to grow very fast. Startups or SMEs are able to provide a great return on the investment made by the investors. As their sales increase so does their share value and hence, this allows a small investment in an early stage company to give a great 10 to 20 fold RoI. This is the reason why the Indian startup sector is attracting a lot of interest and funding from investors world over.
Venture Capitalists are continuously on the lookout for small early-stage companies that can grow fast and multiply their funds. They accept that over 95% of their funds will have to be written off due to losses/ company going bankrupt. However, they know that this 5% which is not written off, gives them returns large enough to not just cover their previous losses but large enough to also get a decent return on the investment. Over the years, VCs become adept at spotting good opportunities and they are able to reduce their win-lose ratio from 5:95 to 95:5. This is what then gives them the strength to buy more stocks in established companies or SMEs, which are performing well.
These companies are cash cows that pay out handsome dividends every year and in some cases, VCs are able to earn back their entire investments through the dividends earned. Over the years, VCs are able to gain a substantial ownership of companies, they have a huge amount of funds at their disposal and a lot of influence due to the large size of these corporations that they control. This gives them a sizeable influence over the economies of many countries and thus, making them extremely influential.
Imagine being the boss of a company that holds a significant number of shares in multiple companies such as Pepsi, Coke, Unilever, P&G, Boeing, Microsoft, Loreal, Zara, Dassault, Lockheed Martin, IBM, Apple, Walmart, Amazon, Facebook, etc. This would give you a say in the way a company would be run, a say in how the markets would thus be shaped due to the dominant position of these companies in their markets. Any decision on your part would directly have a bearing on millions of employees, consumers, and vendors across the World.
Warren Buffet invests directly in publicly listed companies. Even though he does not regularly invest in private companies, he fits the exact description mentioned above. One needs to accumulate knowledge that equals a few lifetimes in order to reach a position like this.
The best way to do this is to keep reading, learning, and networking. People who are able to network well, are the ones who are able to get the best deals for themselves. This is how one can excel as a Venture Capitalist. BSE Institute Ltd (BIL) offers a short-term course on Venture Capital & Private Equity Finance to help working professionals and students build their careers in this field. You can learn more here.
Imagining all of the above may look like a tough task for most of us, but the journey of 1000 miles begins with one single step. At the end of the day, it is only your will to win that will get you this.

 

Why is the Cyber world bound to be the next battleground?

Posted on October 12, 2017Categories Short term programmes   Leave a comment on Why is the Cyber world bound to be the next battleground?

The invention of the internet is said to be one of the greatest events of this century. No prizes for guessing why! It is practically impossible to imagine the World without it today and any disruption in its service literally causes havoc. The internet today allows us to communicate, talk, do business, study and a million more things over it – all for a fraction of the cost and effort of doing it offline. This is the primary reason for the internet’s success.
Today everything from our homes, cars and every other smart device is connected to the internet. The next generation of electronic products promise to be connected to each other with bluetooth, the internet or through any other network.
The much awaited launch of the 5G networks promises to revolutionize the way we live. Imagine a normal table lamp or tubelight. If these are connected to a network, they can communicate with you just like a computer would. You would not have to climb up on a stool to find out whats wrong with a tubelight! The tubelight will send you a message on your phone saying that the started needs to be replaced or the tube needs to be fixed. This makes things very simple for all of us. Some advanced countries have already gone ahead with this system.
Imagine someone with the power to mess with these networks. Anyone with this ability can easily mess up our lives and cause havoc. We hear about computer hackers hacking banks, e-commerce companies and tragetting individual users in an attempt to gain access of their details important details and steal their online identity.
This is truly scary in a world where the internet is indispensable. With the internet and our devices acting as our primary storage devices any threat to them is a major challenge and can result in a major catastrophe. The recent US Election was believed to have been hacked by external forces, some organizations have been brought to the brink of bankruptcy due to a sustained hacking effort by criminals. These are just a few examples of the incidents that have happened in the recent past.
The reasons for doing so are simple – the implications of such acts severely change the balance of power in terms of influence, economics and soft power. This makes the state or the entity able to carry out these attacks extremely strong and sought after. These people are sought after as people with criminal intentions are always looking for ways to beat the law. They are also sought after by people who look to make their systems and computers safe.
This makes cyber security a highly lucrative career option. Cyber security is a domain that currently needs a few hundred thousand professionals and we unfortunately do not have enough trained professionals who can handle it. BSE Institute Ltd (BIL) offers a short term training course for all those who plan to build their skills and be this prized asset for their company.
Cyber security is now projected to be a $232 billion industry by 2022 and anyone who can provide his expertise is sure to beat the Financial gurus of the world who currently earn Billion Dollar salaries and bonuses.

 

Is it possible to retire at 40 in this economy?

Posted on October 11, 2017Categories Short term programmes   Leave a comment on Is it possible to retire at 40 in this economy?

Former US President George Bush has often been quoted saying that one must not focus just onmaking money, rather your focus should be on being successful, having a system that creates value for everyone and helps you be a better individual. Money is just a by product of all of this. This is a famous quote that has been used by many people all over the World. However, there are very few who can claim to have successfully followed it and achieved what they set out to do.

Retiring at 40 is one of those things that a lot of people wish to do, but find it hard to achieve. It is possible and people have done it! There are two ways to do this. One is the tried and tested path of starting your company, coming up with new products, taking it public and then retiring by the time you are 40. This is a much tougher task as compared to the other one that we suggest. Innovation, product development is not something that is possible for everyone.

The second and the most easiest way to do this is through investing. Disciplined investing! Investing has been in existence ever since business and trade have been in existence. Anyone can be a successful investor as long as he is disciplined in nature. One needs to focus only on a couple of things before jumping into the world of Finance. You need to be good with your numbers. It is a must for anyone to be good with numbers in order to read financial reports and make investment decisions. Secondly, one must be able to understand basic market fluctuations and realities. Understanding the demand and supply situation that exists or that will exist requires some skill. You should be willing to stay in touch with the current market scenario by connecting with the right people and reading the right books.

By doing these 2 activities, you are keeping yourself sharp and up to date with the current trends of all the industries. Investing is usually done in 3 major areas stocks, business investments (stake purchase) and debt markets. All three are ultimately dependant on your understanding of the market that the business operates in, its industry, competition, regulations, etc. It is your ability to gauge the potential of a business that helps you to make a great return on your investment.

A great example is the Billionaire investor & entrepreneur Richard Koch. A first generation entrepreneur, he started his own company by the name of L.E.K consulting. He was successful as a businessman and also as an investor. He credits his success to his policy of principles. He says that principles are ideas that enable you to sort the knowledge, help you analyze it, and get to essence of the matter as simple and quickly as possible.

Keeping a focus on your core abilities and interests helps you get ahead in life. By focusing on these, you know which industry interests you, whih industry do you see growth in and hence, which industry can give you thee best return on your investment.

The best way to do this is observe this from close quarters. You may do this by studying and networing at BSE Institute Ltd. BSE Institute Ltd (BIL) gives students and working professionals to get trained under industry professionals in order to be an ace investor. It offers a short term certificate course on Investment Banking – that trains participants to be a Global Investor.

In a fluid economy, only your knowledge of the markets can help you retire rich and retire quick. Keep reading more in order to keep learning more.

How does innovation work? Is it helping your brand or is it killing it?

Posted on October 9, 2017Categories Advanced Marketing   Leave a comment on How does innovation work? Is it helping your brand or is it killing it?

In the words of the late tech titan and entrepreneur Steve Jobs – “Innovation helps you distinguish between a leader & a manager”. Although we all wish to be like him, we always wonder how? Where do we go, what should we do and what is really that “ahaa” moment that will set us up for success? If you are thinking about these, you are completely off track and far far away from reality.

The foundation for any great company, product and brand is a clarity of purpose and a crystal clear plan to achieve it. Steve Jobs passionately believed that technology can solve most human problems, even ones as complex as cancer! It was his commitment to provide tools to those who shared his vision, that helped him design computers, laptops and other products to support and better the human race.

It was this clear focus in his life that helped him design the best products that can support all those people who want to use tech to solve other challenges that the human race faces. This clarity of purpose and a laser like focus on its mission was something that most tech giants lacked back then and they lack it even today. Most of them focus exclusively on maximizing their profits and shareholder value – without thinking about going beyond the ordinary.

A great example for this is Sony electronics of Japan. Sony was a huge player in the music industry during the 1990s and Apple is believed to be responsible for it losing customers. A lot of people who listened to music using their walkmans and cassette players, abruptly shifted to the iPod once it was launched. The irony of this situation is that Apple was not the first to come up with this product – it was Sony which had come up with an MP3 player like music device, but it was shelved as they believed, it would kill their walkman! The same thing happened a few years later, but this time, it was a rival with the same product.

Yes, innovation can kill your brand, if you don’t know how to handle the new product or research. An idea whose time has come, cannot be resisted and it is bound to make an impact, whether anyone likes it or not.

Another interesting example is of the automobile company Volvo. Auto companies spend a lot on research and development and they keep coming up with new technologies for their car models in order to be perceived as the best auto company. They are also very careful & competitive with respect to branding, marketing & sales as one wrong decision can be a huge loss. A failed car brand or a model will result in them having to make substantial changes to their manufacturing facilities and huge write offs in their ad and marketing spends. The losses areeasily to the tune of a few hundred million Dollars.

Volvo has been selling cars since 1927 & it celebrated its 90th anniversary this year. Everything that the company does revolves around Safety. They are always careful to highlight the fact that they don’t sell cars. They underscore their belief that they are in the business of providing a safe family lifestyle. Safety is all that they revolve around. It is a focus on this core value that has allowed them to come up with unique products that have appealed to consumers for over a century.

Volvo is an excellent and an age old example of innovation and its successful implementation because it is focused on the core values of the company.

As mentioned earlier, innovation is not exactly difficult, but its implementation is what vexes most company managements. A lot of examples of good tech companies going bankrupt have filled the pages of newspapers in the past few years. All because, they did not have a clear focus or an idea as to where this product can be best implemented.

This challenge is faced daily by many many managements, before investing a significant amount of funds in a new product. It is not always possible to take the best possible decision, but it is possible to learn from the decisions that others have taken over the years. BSE Institute Ltd (BIL) offers a one year course in Advance Management for senior industry professionals who are in line to lead their organizations. The course curriculum dwells on major challenges, such as, innovation implementation, which the senior managements face regularly.

Innovation is a lot like a new business. You need to look before you leap, but it is next to impossible to know everything that can or will happen after you leap. Best of luck to you

Successful Business = Good (PR + HR)

Posted on October 8, 2017Categories Short term programmes   Leave a comment on Successful Business = Good (PR + HR)

The headline may actually come as a shock to many readers. The success of a business is dependent on the products and the marketing, but we haven’t mentioned it in this case! The common belief amongst most corporate employees is that HR is a cost centre that just onboards employees and takes the tough decision of laying them off. In fact, it is quite the opposite. HR is one of the most important functions for every consultancy, manufacturer and any other business (even in a Financial Services firm). Similarly, good PR is also an indispensable part of a successful business. Let us go through to points below to know more.

For most companies, there are 2 key aspects that are important for doing more business – their products and their employees. Initially, products are invented by a few key people, but after a few years, it is the vast majority in R&D, who build better products. It is these products that get an organization more sales and profits. Similarly, in order to get more business, it is the sales team which has to go out and convince more clients to come and invest their money with them. Your entire organization is depending on the HR to attract the right kind of individuals who can perform better, come up with better products and sell more products.

In order to attract the best talent, the organization must have an image of being the one of best place to work for. A positive image helps in marketing your brand and product as one that is superior to others. Once someone is convinced of your product’s superiority, they are your loyal customers. This is the work of PR. Public Relations experts help you connect with the right people, the influencers with millions of followers. These influencers help you to shape the narrative in favour of your brand. This will be helpful in attracting consumers and employees.

An important point that is missed quite often is that HR is not just the responsibility of the Human Resources Dept – it is the collective responsibility of everyone working in the company. People who leave an organization are usually changing their bosses’ and not anything else. It is how one gets treated that defines his mood, his behaviour and his attitude towards his workplace. If everyone does not practice what is preached, then the company’s strategy is bound to fail. The HR can intervene, but it isn’t possible to do this on a daily basis.

Google is the best example for this strategy. Apart from being one of the most innovative companies of all time, it has successfully used PR & HR for making itself the best employer and the best listed business. While it was still a young company, Google made itself popular by getting popular influencers and celebrities to use it and quote it in their interviews. The same is done by many internet companies by tying up with internet celebrities. Whenever a celebrity was asked about where he learnt about something, he just said “I Googled it!”.

When it came to attracting the best talent, they were able to attract passionate people as they were into cutting edge tech products. They also recruited people right off the campus, people who were focused on their core ideology and not just the ones who had good grades.

This philosophy that Google followed was important for them to attract clients, investors and employees. How else does one explain Google becoming one of the most valuable companies in a short span of 19 short years? This philosophy is nothing but a well thought out business strategy.

Crafting a business strategy while starting a company is essential. At least having an idea of what you would want it to look like is necessary. The recent history of Google serves as a great example for working on the same.

BSE Institute Ltd (BIL) is a subsidiary of the Bombay Stock Exchange that offers multiple short term and long term courses that help entrepreneurs and executives excel at their organizations. BIL takes full advantage of being at the centre of India’s financial district and designs courses on Banking, Finance, Strategy, Insurance, etc. for students, professionals and senior executives to learn from. It offers a short term course on Business Skills for Working Professionals. Click on the link to know more.

The HR & PR is a pull marketing strategy that has been used successfully by many across the globe. It is not at all expensive and can be used easily to grow a business. Using the same functions that every organization uses has helped corporates differentiate themselves and grow

A Billion Dollar question – Do you understand the data that is shared with you?

Posted on October 7, 2017Categories Advanced Marketing   Leave a comment on A Billion Dollar question – Do you understand the data that is shared with you?

Beauty lies in the eye of a beholder! This could be one thing that may not be related to data in anyway – but it actually is! Business data is only helpful when you are able to observe and point out the useful bits of information. Else, it is of no use! It is truly like finding a needle in a haystack; but then that’s what you get paid for!

In an age where every movement of your finger is a goldmine of data, every little click or tap on the phone screen signifies your feelings towards a product or brand, understanding data/ big data in business has become as important as breathing! Every bit of this data is not useful, but it still is the reason for a host of business decisions that a brand manager or a CEO takes. These are related to the kind of ad to be run, the kind of product to be launched, the markets that have to be targeted or if a product has to be phased out of production.

This is the reason why many large companies, today have thousands of employees working in their data centres to get the best insights that help them steal a march over competition.

FMCG companies are excellent examples for this. FMCG companies sell many products at the same time –soaps, shampoos, food products, etc. How do they analyze which products are doing well? Which geographies serve them well? The sales data may not be the only way to look at it as they sell directly to the wholesaler. This data could be fudged to benefit a certain brand or a wholesaler. Third party research and analytics firms help them to obtain and analyze this data. Third party providers provide data right down to the street level. This allows companies to analyze every single pocket of a city and arrive at a conclusion as to why they are successful or unsuccessful. The data shared with the CEO, will be for a certain geography and in a country like India – it is a lot! The amount of data that one gets is gigantic and it is easy to get lost under its weight. This is exactly why, knowing the right levers to pull, separates the leaders from managers.

Another great example is E-commerce firms. E-commerce companies which operate via websites and mobile apps have their own in house data analytics teams that mine this data and analyze each and every individual who has visited their site. They can understand the reasons for a consumer to shop or skip their platform with his online behaviour. This allows them to target them with better offers and deals in order to make them loyal customers.

When analytics is clubbed with Artificial Intelligence, it gives an analytics professional the opportunity to do all of this automatically, .i.e. without any human interference. For AI to work smoothly, it still requires a certain amount of human supervision, .i.e. for setting the objectives that the software has to meet.

Hence, it is extremely important for executives (especially the ones who are at the top of an organization) to understand data and its uses. Even if one is not an expert, expertise can be gained in a short period of time. BSE Institute Ltd (BIL) offers a 12 month Advance Management Program. It is designed specially for senior industry professionals. The course is focused on subjects like data analytics, corporate finance, blue ocean strategy, etc. that are used regularly by senior professionals of large companies. You can learn more about it here.

Data has now become an integral part of all our lives and there is no future that can be imagined without it. Until, we get a solution for automating data analytics, doing it manually, seems to be the only option. Hence, lets try to be the best that we can.

Fundamental Analysis- the easiest path to stock market success

Posted on October 5, 2017Categories Short term programmes   Leave a comment on Fundamental Analysis- the easiest path to stock market success

In a tech age where the BSE (Bombay Stock Exchange) offers traders the opportunity to trade at the speed of 6 microsecends, one would imagine that an investor from the early 1900s or the 1800s would be unsuccessful. Wrong! The profile of investors has remained the same over the centuries, dating back all the way to the 1600s. Finance and investing is one industry that has been unchanged with the passage of time. There are major fund houses and banks that have invested regularly in the same financial instruments for the past few decades and even centuries.

Investors and banks may have grown richer and more powerful, but the underlying tricks of the trade have still remained the same. The basic skill that investors have used well over the years is Fundamental Analysis. Fundamental Analysis basically involves an in depth study of the business, industry, ancillary industries and any other factor that could impact the business of the company we plan to invest in. The fundamentals of any business or an industry have not changed and hence, a person who has used Fundamental Analysis in the past can use it anytime in his life.

Thus, this is one key piece of information that cannot be ignored by any investor. No investment analysis can begin without actually carrying out a fundamental analysis of a company/ stock. Another advantage of Fundamental Analysis is that it prepares investors for all investing in all possible industries. An investor is able to efficiently analyse other industries after thoroughly understanding one industry. He understands the key touch points that need to be addressed with each industry and thus, can easily advance from being a novice to an expert investor.

Fundamental Analysis teaches one the art of reading an annual report. This is a key skill required for investing as this document outlines the activities of a company throughout the year. This lets one compare the competence of a company with its competitors and the industry as a whole. Mastering this skill lets people pick the diamonds in a large mine full of coal.

Majority of investors keep refreshing their knowledge by attending short term courses that keep them updated. BSE Institute Ltd (BIL) is an institute that offers multiple courses all over the country for this purpose. Visit their website and check the multiple short term courses that can help an individual become a better investor.

The legendary investor Warren Buffet is believed to have started investing while he was just 14 and he feels sad that he did not begin any sooner. Investing, Financial Analysis, Fundamental Analysis, etc. are subjects that can be learnt by anyone who understands Maths and has common sense. Many people also feel that this should be taught in school along with other main subjects. However, the beauty of investing is one who may not begin early, can still learn and earn a lot, if he plays his cards right.

Why do MNCs hire economists? What impact do they have on their business?

Posted on October 4, 2017Categories Advanced Marketing   Leave a comment on Why do MNCs hire economists? What impact do they have on their business?

Economists are usually understood to be people who are working with Governments and International bodies like the United Nations to churn out huge quantities of data that talks about the conditions of human life. These reports, which are largely ignored , contain a large quantity of data that is usually difficult to interpret and understand. In reality, the work done by economists defines the strategies that are decided by companies.

The information that an economist has is truly priceless. For a corporate that is strong in a certain geography (in a state or a country or a continent) and aims to expand to another major geography, it is the economist who does the first survey about which market is most suited for them. An economist assesses the reasons for a product’s success in a market. He maps the per capita income, the state of the economy, the demand & supply situation of basic goods in the country/ market. An economy with similar market conditions is what an economist suggests for the company’s expansion.

On identifying the conditions in which our product has been successful, an economist tries to locate other markets with the same market conditions, thus, setting up the brand for success in that market.

A certain product/ service may be successful in a market for various reasons, but it primarily depends on the income of the citizens and the health of the economy. People who have a lot of disposable income are the only ones who can spend. Economies which are in good health are the only ones, which will allow luxury items to be sold in their markets. Similarly, our products have to be focused only on those markets which can satisfy the above conditions.

A great example for this is FMCG majors like P&G, HUL. Consumer products like soaps, shampoos, detergents, toothpastes are used by consumers across the World. However, most people choose the brand according to their budget. A well off person chooses a premium brand, while a person from a lower SEC chooses a mass market brand. For an FMCG company, it is important to assess if the market has a lot of people who can afford their premium brands and thus allow them to launch these new brands. This assessment is done by economists – who highlight the right markets for a brand to be launched in. For large countries like India, China & Brazil identifying the exact state/ market for launching the product is important as even the largest state is equal to a small nation.

Hence, an economist allows corporates to target the exact market and consumers who will be willing to pay a premium for their brands and earn more.

A lot of market studies are conducted by corporates to help economist gather this data and identify the next markets where these products can be successful. The senior management of most organizations is full of people who have worked their way up from sales & marketing. They may not always be conversant in the data being shared by economists. However, it has become necessary for all to understand the data &know how of this industry.

BSE Institute Ltd (BIL) offers a 12 month Advance Management Program (AMP) that is focused on helping senior managers transition to the board room. It teaches subjects related to consumer behaviour, market economics, blue ocean intelligence, etc. that are necessary to be a CEO. You can learn more by clicking here.

Business economics, market economics may all sound technical and difficult, but from a business perspective, it is useful to first understand a market in detail and then invest in it. It is much cheaper to go through data and then take a decision about launching our product than to launch the product and then wait for results. The latter can be a very expensive strategy and could result in heavy losses.

It is always better to look before you leap, but with economists – you look & measure before you leap!