Monday and Wednesday April 17 & 19, 2017 - Classes #22 & #23 - Diversification

April 17, 2017 - Class #22


Diversification: How do companies diversify their businesses?

1. New Product
2. Old Product in New Market
3. Acquire Business

Reason Why:

1. Growth
2. Risk

Four Strategies:

1. Concentric - Expand into new markets with same product
2. Conglomerate - Operate new business that are not related
3. Veritical - Buy businesses along the production line - Control  
4. Horizontal: Buy competition

:

Why Diversify

McDonald's Diversification Strategy.

What is a conglomerate?

Group on should have sold

Agriculture
Farms diversify by expanding product lines and using items both to sell and to use in production of other goods. Dairy farms produce milk as their core product, but from this root, a farm can branch into making related products such as cheese or ice cream. A farm with enough space can grow different crops, thus having multiple product lines. Some farms raise cattle for sale and use the cattle’s organic matter to fertilize and support the growth of crops; similarly, wheat or corn can go to market or into the mouths of livestock.


Restaurants
A restauranteur can tap revenue streams beyond serving meals in the restaurant. Grocery stores can carry the restaurant's line of salad dressings, marinades, or sauces, for example. A restaurant might have a gift shop to sell gifts tailored to the restaurant, its menu, or community, such as cookbooks, travel books and videos, souvenirs, and postcards.

Sporting Goods
The sporting goods market encompasses a customer base with diverse sports and recreational interests. Many retailers will have an assortment of choices to meet these needs. For example, a store may carry shoes for runners, basketball players, golfers, soccer players, and baseball players. Sports and outdoor equipment includes balls, bats, gloves, shin guards, golf clubs, camping gear and fishing poles. Diversification has led outdoor stores to include outdoor apparel, GPS devices, and cameras along with the more traditional fishing poles, rifles, and tents.

Construction Equipment
Construction equipment dealers diversify by branching out their goods, services and locations. Geographic diversity can help a dealer hedge against a slowdown in construction or industrial activity in one region. Other dealers have added safety consultation, training, and construction materials such as pipes to their staples of maintenance and rentals. Dealers may choose farm equipment to counterbalance significant drops in construction equipment sales and rentals. For example, by one estimate, construction machinery sales in 2009 dropped 40 percent against only a 5-percent decline in farm equipment sales.

Conglomerate Diversification
Some businesses merge with or acquire other businesses. Congolmerate diversification can involve related or often unrelated enterprises. For example, an entrepenuer might operate a restaurant, a car dealership, and a land development business under one umbrella. Financial considerations, rather than similarities among lines of business or other strategic concerns, predominate mergers and acquisitions.

---

April 19, 2017 - Class #23


The Process

1) When to consider Diversification
     a) Building Stockholders Wealth
     b) Risk Adverse

Mistake - Myspace

2) Approach to Diversification
    a) Acquisition
    b)  New Internal Business
    c) Joint Venture


3) Diversification Path
     a) Related
          - Transfer competitive Advantage
          - Cost Sharing - Economies of Scale
          - Brand
    b) Unrelated
         - Growth Industry
         - Undervalued Stocks
         - Struggling Companies

4) Evaluation
    a) Attractiveness
    b) Position Strength in new market
    c) Strategic Fit
    d) Resource Fit
    e) Rank Options and allocate resources
    f) Update new corporate Strategy with addition(s)

Wednesday April 12, 2017 - Classes #21 Foreign Business Strategy - Part #2

Part 2 of International Business.

Why International Business

Monday and Wednesday April 10, 2017 - Classes #20 Bill Swift - Part II

Mr. William Swift will discuss entrepreneurship. Its part 2 of his talk about what made him a multi-millionaire.

Positive Attitudes In Real Estate Investing

BY: Patrick Teague Jr.

The class discussion/blog on March 22 2017, dealt with the benefits of investing in real estate and in order to be successful in this endeavor is is extremely important to carry a positive attitude. 

Possesing an uplifting state of mind is critical to getting to be noticeably effective in land contributing, as it is in any fruitful attempt in life. Pessimistic discourse and considerations can weaken and shield a man from fulfilling their objectives. Figure out how to change the way you converse with yourself as well as other people and you will change the result of your life's adventure. For instance, how about we take a gander at the subject of endeavoring to show signs of improvement and more advantageous physical shape. Instead of the lines of, "I can never get thinner,"or "Regardless of how much a work out, I never get more solid", it is critical to begin have the correct self-talk with lines such as "I know I can get more fit on the off chance that I eat solid sustenances and exercise routinely,". This same strategy works with regards to putting resources into land. In the event that you hush up about making explanations and others, for example, "I can't ever discover an opportunity to do this business," "There are not a single arrangements in sight around there," "There are an excessive number of different financial specialists in my general vicinity to contend with," or "Individuals will know I'm not extremely educated in contributing when I converse with them" then stop. Change your self-converse with, "In the event that I utilize legitimate time administration I will observe an opportunity to be effective at this business," "The more offers I make, the more arrangements I will make for myself," "By being tireless, I will be the one to discover the arrangements in my general vicinity," and "The more circumstances I chat with individuals, the more certain and proficient I will progress toward becoming." Each attempt and business enterprise is a learning background. With confidence and trust in yourself, you can be fruitful at the things you buckle down for. Talking in a positive way can help manufacture certainty and confidence with which you can succeed, particularly as your experience demonstrates your announcements genuine. Whatever you say and think will turn into your world. Change the way you converse with yourself as well as other people and you will alter the course of your life.The Importance of Having A Positive Mindset in Real Estate Investing with Sam Sadat

Apple Outsourcing

By: Shermon Jones

As we discussed in class Outsourcing is a practice used by different companies to reduce cost by transferring portions of work to outside suppliers. This has been proven to be an effective cost-saving strategy that most major companies in the United States use. Companies such as Nike, Apple, Microsoft etc. all use outsourcing for the advancement of their company.

Apple for example prides itself on creating and innovating their products while keeping their current consumers at their fingertips and attracting new customers. In the United States, design is as far as Apple is willing to go. They outsource thousands of manufacturing jobs to countries such as China, Korea, Taiwan and Mongolia to not only save money, but to save time as well.

Although outsourcing may be beneficial to the company, there are lots of risks that could negatively affect their products, sales and consumers. Some risks that companies that use the outsourcing techniques needs to be aware of are product quality problems, threat to security and confidentiality, bad publicity and ill-will etc.   

Foxconn is the factory in China that produces the Apple products that we know and love. These products are hand made by over 265,000 employees daily. Employees spend at least 12 hours' day, where they only earn a little over $2 an hour. They put a lot of effort into these products and they feel that they deserve higher pay. Most employees of Foxconn have never seen a finished Apple product. This goes to show that although Apple may be saving money by outsourcing, the employees that are completing jobs that would pay over $20 in the US are not being compensated as they should. 

--

Shermon A Jones Jr.

Clark Atlanta Unversity' 17

C: (678)-358-1842

Monday and Wednesday April 3 & 5, 2017 - Classes #18 & #19 Foreign Business Strategy - Professor Teloca J. Murdock Sistrunk

This week, Today and Wednesday:

Professor Teloca J. Murdock Sistrunk will lecture on International Business Strategy.

Professor T. Sistrunk asks that you take notes.

The Billion Dollar Building in Our Backyard

BY: Jordan Frank

In several class discussions we've mentioned the impact that the new Mercedes Benz Stadium will have on not only the AUC community but the entire West End/Vine City area. The real estate effect that the 1.2 billion dollar stadium will have will not be instant but the transformation of the entire community is prevalant in ways other than money. 

The Falcons have hired the technology company Daktronics to build a 360-degree, 63,000-square-foot HD video board that will be positioned at the center of the stadium giving every fan a perfect view of the action.  Also, Mercedes-Benz Stadium have partnered with IBM to be the official systems integrator for the venue which will feature a Passive Optical Network (PON). The PON will be the first of its kind to ever be used in an NFL stadium as it will drastically reduce the amount of power and cooling required for technology throughout the stadium and will help contribute of the overall sustainability aspect of the building. 

The stadium is scheduled to open July 30, 2017 and with each countdown day there is more of a presence of the Atlanta Falcons (and Atlanta United soccer) in a community that they have no roots in. Gentrification, overpriced real estate, and misused infrastructure are on the way in the West End and while there may be citywide excitement there are issues that need to be addressed. The AUC and the leaders of these institutions have a social responsibility to protect the residents and withhold the history of this area.

Daktronics to build halo board in new Falcons stadium - Atlanta Business Chronicle

The Atlanta Falcons hired Brookings, S.D.-based Daktronics (NASDAQ: DAKT) to build a first-of-its-kind circular LED video display for the team's new $1.4 billion stadium. The 63,800-square-foot,non-traditional LED video display will be more than five stories high and three times as large as the current largest single display board in the NFL.