Advanced Financial Management Essay Example | Topics and Well Written Essays - 1000 words

Advanced Financial Management - Essay Example Implementation in the efficiency in a market proves that it is unable for any investor to beat the market consistently by using a common investment strategy. â€Å"The efficient market hypothesis is associated with the idea of a â€Å"random walk,† which is a term loosely used in the finance literature to characterize a price series where all subsequent price changes represent random departures from previous prices.† 3 But even very rarely efficient markets carry a negative implication for the investment strategy. An efficient market does not imply that the stock price cannot move away from the true value. Some times in the efficient market the expected return from investment will be consistent with the risk factor. Errors in valuation creates problems in efficient market. An efficient market is described as â€Å"Informationally Efficient†, because the investors can get all the necessary information that reflects within the market like political, economical and social. â€Å"The paradox of efficient markets is that if every investor believed a market was efficient, then the market would not be efficient because no one would analyze securities.† 4 As per behavioral decision theory of Kehneman and Tversky investors decisions are subject to the change of optimism and pessimism. These behavioral changes are reflecting their investment decision. Some investors are over confident they are able to forecast future stock price. 5 Share prices are reflected all information about the market so the investors are able to expect their returns and they can easily take decision about their investments. Market may needs to exist where the investors are unable to earn excess return over a long period. In order to maintain the market in a steadily manner it is essential to undertake the legal barriers about the publication of privatized information. In a weak form of market the prevailing share prices are

Next Plc of UK Case Study Example | Topics and Well Written Essays - 3500 words

Next Plc of UK - Case Study Example "A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices." (Strategy - Competitive Advantage: Competitive Advantage - Definition. 2008). This has high relevance in the context of the increased competition the company is facing from newly industrialized nations like India, China, Taiwan and Vietnam. The report is also intended to provide required recommendations for Next to solve the issues faced by it in the present market. Next Plc is a retail cloth major that is headquartered in England. The company belongs to the clothing market of UK, which is the second biggest textile and clothing market in European Union. The major share of clothing market in UK accounts for the apparels for women, girls and children. "Womenswear is the largest sector within the market in general, clothing for women and children is worth double the market for men and boyswear." (Clothing Retailers Market Assessment: Largest Sector. 2000). Considering the higher boom in the industry the clothing retailers are at a higher growth pace in the market. The clothing market of UK can be split into everyday wear, high street fashion and top end ready to wear. The market players include right mix of departmental stores and fashion retailers. The major player in the industry is Marks and Spencer whose market share is 15% of the overall market. The most influencing governmental regulation for the industry has been the minimum wage. Due to t his regulation that added more on the costing structure, many companies had moved out of UK. The company that is been mentioned in the assignment is Next Plc which is one of the leading cloth retailer in UK. The company was formed in the year 1982 as a new meaning for the fashion industry. "Next plc designs, manufactures, and distributes clothing and home furnishing and accessory items to nearly 330 Next retail stores and through the company's Next Directory mail order sales catalog." (Next Plc: Company Perspectives: Company History. 2008). The company was able to capture a good share of market in a short period of time with their good branding and marketing strategies. The products of Next are characterized by style, quality and value for money. Currently Next has 460 stores in UK and over 100 franchisees outside the country. The company gives higher priority for customer service as a strategy to capture more and more market. Based on the analysis of Next on the basis of Porter's Five Force model, three areas of concern can be identified for the company. The three areas of concern for the company are market penetration, consolidation and product and market development. Market penetration is a cause of concern for the company especially in the present situation of increased competition. The threat of new entrants is higher in the case of cloth industry. And also the increased bargaining power of buyers will contribute to the competition. The strategy to be adopted by the company is increased product promotion. The product range of the company can also be improved on the