Today we will talk about robo advisors, those novel advisors that help you make money by investing in an almost automated way. Many investors wonder what robo advisors are. In this article, we will answer the main questions that may arise when getting started in automated management. As the main advantage, we will explain the security that automated rebalancing provides by eliminating the investor’s psychological bias, as well as being a great cost savings compared to actively managed funds with lower fees.
What is a robo advisor
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Robo advisors, or automated asset managers, are digital platforms that offer automated wealth management that uses mathematical algorithms to invest clients’ money in a way that doesn’t require substantial financial knowledge.
Robo advisors, or automated asset managers, are digital platforms that offer automated wealth management that uses mathematical algorithms to invest clients’ money in a way that doesn’t require substantial financial knowledge.
A human may or may not be present during this process. When there is, we speak of a hybrid robo-advisor, as is the case with Finanbest or Openbank’s Robo Advisor, and when there is not, we speak of a pure robo-advisor, such as Finizens, inbestMe, Indexa and most banking robo-advisors.
Robo-advisors are a passive investment alternative and most use index funds or ETFs.
Robo-advisors are a passive investment alternative and most use index funds or ETFs.
What is a robo-advisor for?
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It allows you to manage your investments automatically, online and according to your preferences. All at a lower cost and without having to keep an eye on your finances. In this sense, they are aimed at investors who have little time to invest. Automated management is done with the help of algorithms to maximize the return on investments and get rid of emotional biases.
How do robo advisors work?
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When trading with a robo advisor, there are typically three steps:
You complete a suitability test, a questionnaire that assesses your investment objectives, your financial situation and your financial knowledge.
Depending on the results of the test, Robo Advisor will allocate an investment portfolio tailored to the investor’s risk profile.
Finally, the investor opens an account and makes a capital transfer to invest.
Depending on your profile, it is advisable to analyze which Robo Advisor best meets your expectations. The whole process of defining the profile and the investment is done online. Once the investor has transferred the money and chosen the asset allocation, Robo Advisor takes care of the rest, i.e. rebalancing and dividend reinvestment.
What are the advantages of a robo-advisor?
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The main advantages of a robo-adviser are:
Low costs and competitive fees in a regulated and controlled market: thanks to automation and economies of scale, robo-advisors are on average one-third cheaper than traditional investment vehicles. In addition, Robo Advisors are regulated and supervised by the CNMV and the Bank of Spain.
Robo Advisors are regulated by the CNMV and the Bank of Spain.
Simplicity. You only have to complete the risk profile test and you will be assigned the portfolio that best suits your profile.
Automated process: thanks to its algorithmic nature, it allows tailoring a standardized product for each customer. In addition, this process considerably reduces operational risk.
More availability and accessibility of information thanks to its online distribution: our portfolio can be accessed at any time. Generally, 100% of administration can be done online.
Delegated portfolio management: capital management instead of advice. It would be like sitting in a nice restaurant and enjoying a meal rather than buying the ingredients, cooking them, preparing the recipe, serving them, and then washing the dishes.
Diversified and efficient portfolios: in this case, we use ETFs to achieve very high diversification, create very efficient portfolios and optimize the risk-return ratio for each risk profile.
An opportunity to avoid emotional biases.
Many researchers argue that human emotions are very present in investment decisions, which can lead us to overreact in certain scenarios instead of following rationality. In some cases, emotions can explain price bubbles and market behavior.
Researchers have discovered a number of biases over the years:
The disposition effect. Investors tend to sell «winners» (stocks that have risen) too early and hold «losers» for too long.
Overconfidence.
Familiarity, risk and return bias. Investors tend to favor assets they know and are familiar with. In some cases, this can lead to poorly diversified portfolios.
Anchoring effect. This results in an excessively positive or negative outcome relative to our expectations, which can lead to overconfidence or distrust when investing in a product with similar characteristics.
These are just a few examples of how behavioral finance can affect investing. However, in the case of automated management, the human factor disappears from the equation.
There are many other elements that define Robo Advisors very well, such as transparency and independence. If we take into account the characteristics described above, the simplest definition of a robo advisor would be: an efficient, automated, low-cost portfolio manager.
What are the disadvantages of a robo-advisor
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Investor perception of automated management: many people still have doubts and fears about this type of technology and feel safer if their assets are managed by a real person to guide them in their investment decisions. Therefore, one of the great challenges of automated management is the ability to communicate and convince investors of the positive balance between the advantages and disadvantages of this new service.
The lack of depth in the management of assets and the lack of depth in the investment process is one of the main challenges of automated management.
The lack of depth in identifying the risk profile of investors through simple questionnaires, which can even be misunderstood by investors if they do not have a minimum of financial knowledge.
We cannot change the asset allocation of the allocated portfolio, only change the portfolio with more or less risk, but not change the assets invested.
Not all robo-advisors offer lower commissions.
How many types of robo-advisors are there in Spain?
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Below you will find the main independent and banking robo-advisors.
The main difference between these types of robo-advisors is that independent advisors specialize in using robo-advisors for indexed portfolios, while bank robo-advisors use robo-advisors in addition to the normal services they provide as a bank.
We hope that these readings will be of great use to you and that you can discover how they work perfectly, both books are written by some of the greatest professionals in this sector and with great professional and academic prestige.
More and more investors are using exchange-traded funds (ETFs) to create diversified portfolios. Perhaps you should consider it too, if you understand the advantages and disadvantages of risk.
More and more investors are using exchange-traded funds (ETFs) to create diversified portfolios. You might also consider it, if you understand the trade-offs between risk and return.
An ETF is a basket of securities whose shares are sold on an exchange. They combine the characteristics and potential benefits of stocks, mutual funds or bonds. Like individual stocks, ETF shares trade throughout the day at prices that change based on supply and demand. Like mutual fund shares, ETF shares represent partial ownership of a portfolio that has been created by managers
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What are exchange-traded funds or ETFs
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In short, an ETF is a basket of securities that you can buy or sell through a securities brokerage firm on a stock exchange. ETFs are offered for virtually all possible asset classes, from traditional investments to so-called alternative assets, such as commodities or currencies. In addition, the innovative structures of ETFs allow investors to short the markets, gain leverage and avoid taxation on short-term capital gains.
Main types of ETFs
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There are many types of ETFs, each with a different investment approach. The following are some of the most common ETFs.
Diversified passive equity ETFs: are designed to replicate the performance of widely followed stock market benchmark indexes, such as the S&P 500, Dow Jones Industrial Average and MSCI Europe Australasia Far East (EAFE) indexes. note 1 Major index ETFs tend to track their benchmarks closely.
Passive equity ETFs: specialized ETFs, such as those that mirror sector subsets of the S&P 500 Index or the Russell 2000 Small Company Index, can offer investors specific exposure to help fine-tune their portfolio strategy. Like diversified passive funds, these niche portfolio funds are typically composed of the same stocks used to calculate their benchmark indexes.
Securities that are used to calculate their benchmark indexes.
Active equity ETFs: allow their managers to use their own judgment in selecting investments, rather than being rigidly tied to a benchmark index. Active ETFs may offer the potential to outperform a market benchmark, but they can also carry higher risk and higher costs.
Equity ETFs are a great way to outperform a market benchmark, but they can also carry higher risk and higher costs.
Fixed-income ETFs: focus on fixed income rather than equities. Core fixed-income ETFs tend to be actively managed but have relatively low turnover and generally stable portfolios.
Other types of ETFs
Market ETF: Designed to track a specific index, such as the S&P 500 or the NASDAQ.
Equity ETF: Designed to track a specific index, such as the S&P 500 or the NASDAQ.
Bond ETFs: U.S. Treasury bonds, corporate bonds, municipal bonds, international bonds, high-yield bonds and more.
Sectoral and industrial ETFs: oil, pharma or technology: designed for exposure to a specific sector, such as oil, pharma or technology.
Commodity ETFs: designed to track the price of a specific commodity, such as gold, oil, or corn.
Style ETFs: ETFs: designed to track an investment style or focus on market capitalization, such as large-cap value or small-cap growth.
Foreign Market ETFs: ETFs: designed to track markets outside the United States, such as Japan’s Nikkei index or Hong Kong’s Hang Seng index.
Inverse ETFs: ETFs that are designed to benefit from a decline in the underlying market or index.
Inverse ETFs: ETFs that are designed to profit from a decline in the underlying market or index.
Active management ETFs: Unlike most ETFs, which are designed to track an index, these are designed to outperform an index.
Listed notes (ETNs): essentially are debt securities backed by the creditworthiness of the issuing bank and designed to provide access to illiquid markets; they have the added advantage of generating virtually no tax on short-term capital gains.
Alternative Investment Funds ETFs: Innovative structures, such as ETFs, that allow investors to trade volatility or gain exposure to a particular investment strategy, such as a currency carry or hedged call.
Different structures
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Originally, ETFs were organized as unit investment trusts (UITs). In a UIT, an investment company buys a fixed portfolio of securities and then sells shares of that portfolio to investors. This type of structure results in dividends being held in an interest-bearing account, from which they are deposited into the ETF, usually on a quarterly basis. Delaying the investment of dividends can have a slightly negative effect on the total return of the ETF, as dividends are held in cash rather than invested.
Other ETFs are structured as open-end funds. This arrangement follows the typical mutual fund structure, as the investment company constantly offers and redeems new shares. The open-ended structure allows immediate reinvestment of dividends.
Advantages of ETFs .
Disadvantages of ETFs
Advantages of ETFs
Potential tax efficiency
Low expense ratios
Trades all day long on the exchange
No minimum dollar amount to invest (no fractional shares can be purchased)
No minimum dollar amount to invest (no fractional shares can be purchased)
You can sell short and buy on margin
Disadvantages of ETFs
Brokerage commissions incurred
Disadvantages of ETFs
Capital gains distributed from time to time
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Flexibility may encourage frequent trading, which could lead to the loss of tax advantage
EFT classifications
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Tax efficiency: ETFs can be more tax efficient than some traditional mutual funds. A mutual fund manager can trade shares to satisfy investor redemptions or to pursue fund objectives. The sale of shares can generate taxable gains for the fund’s shareholders.
Since ETFs are like stocks, redemptions are not an issue. In addition, managers of index-based ETFs only make trades to match changes in their index, which can be more tax efficient.
Low costs: passively managed ETFs (managers typically trade stocks only to replicate the underlying benchmark indexes) can have lower annual costs than actively managed funds.
Passively managed ETFs can have lower annual costs than actively managed funds.
Passively managed funds can have lower annual costs.
Flexible trading – Like stocks, ETFs trade in real time and trade throughout the day. Mutual funds, on the other hand, do not have this flexibility: Their prices are based on the end-of-day trading prices.
Equities – Like stocks, ETFs trade in real time and are traded throughout the day.
They can be sold short and bought on margin – Because ETFs trade like stocks, investors can use them in certain investment strategies, such as selling short and buying on margin.
They can be sold short and bought on margin.
No minimum investment – Most mutual funds require a minimum investment, whereas with most ETFs, an investor can typically buy any number of shares.
Most ETFs require a minimum investment, whereas with most ETFs, an investor can typically buy any number of shares.
Most ETFs require a minimum investment.
Diversification – ETFs can be a good way to increase the diversification of your portfolio. For example, buying shares of a technology sector ETF can potentially be less risky than buying shares of a single technology stock: an ETF can own shares of many different technology companies.
Education, pricing, research and other tools specific to theETFs
Are ETF dividends taxed
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No, they don’t. You can hold the ETF as long as you want. What is the tax regime for ETFs in Spain? Unlike mutual funds, capital gains derived from the redemption or transfer of ETFs are subject to withholding tax.
How are ETF dividends paid?
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Exchange-traded funds (ETFs) pay a full dividend, which is linked to the shares held in the funds. To that end, most ETFs pay dividends quarterly by withholding all dividends paid on the underlying shares during the quarter and then paying them pro rata to shareholders.
Of course, like all investments, ETFs can carry risks and other potential drawbacks. Consider these factors before you invest:
The flexibility of ETF trading can encourage frequent trading. This could lead to the possibility of poor timing with the market (getting in and out of stocks at inopportune times).
Brokerage costs are incurred. For this reason, ETFs may be more appropriate for an investor who buys and holds a large number of stocks at a time than for an investor who uses a systematic investment program.
There may be capital gains distributions. On occasion, some ETFs have distributed taxable capital gains, usually because the managers needed to buy or sell stocks to match their underlying benchmarks. In addition, government debt ETFs are subject to federal income tax.
You should carefully consider the risks of different ETFs. For example, many sector ETFs tend to be more volatile than ETFs that track the broader market. Consult a financial professional before investing in an ETF to make sure you understand the risks and have the most up-to-date information.
From canal empresas we hope we have helped you to improve your knowledge about etfs or exchange traded funds, if you want to continue increasing your knowledge about stock market and investment do not hesitate to check the rest of sections and articles about it.
The definition of Business Management: everything you need to know .
The definition of business management is themanagement, coordination and organization of business activities. It usually involves the production of materials, money and machines and includes innovation and marketing.
Business management is themanagement, coordination and organization of business activities.
1. What does management do 2. What is a business management system 3. Business management tactics 4. Management styles
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It usually involves the production of materials, money and machines and includes innovation and marketing. Management is responsible for planning, organizing, directing and controlling the resources of the enterprise so that they can meet the policy objectives.
What does the management do?
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Managers and directors have the responsibility and authority to oversee the company and make decisions. The size of managers can range from one person in one organization to thousands of managers in companies that are in different countries. In larger organizations, policy is defined by the board of directors and then enforced by the chief executive officer, or CEO.
Some believe that the best way to assess the future value and timeliness of a company depends on the experience and quality of management. The goal of management is to get people to work together to achieve the same goals and desired objectives by making efficient and effective use of available resources.
The goal of management is to get people to work together to achieve the same goals and desired objectives by making efficient and effective use of available resources.
The functions of management are as follows:
Organize
Directing or leading
Planning
Staffing
Staffing
Organizational management
Organization management
They also include the management and use of financial resources, natural resources, human resources and technological resources. Management is necessary to facilitate a unified effort to achieve the company’s objectives.
A business management system or BMS is a set of tools used to tactically implement and strategically plan procedures, processes, policies, guidelines and procedures that are used in the implementation, execution and development of corporate strategies and plans, as well as all related management activities.
Business management systems are a set of tools that are used to tactically implement and strategically plan the procedures, processes, policies, guidelines and procedures that are used in the implementation, execution and development of corporate strategies and plans, as well as all related management activities.
They provide the basis for tactical and strategic business decisions regarding actual processes, tasks, activities and procedures in order to meet all organizational objectives and customer expectations and needs.
They provide the basis for tactical and strategic business decisions regarding actual processes, tasks, activities and procedures in order to meet all organizational objectives and customer expectations and needs.
The main idea of a business management system is to provide management with the tools to monitor, plan and control their activities and measure the performance of the company. They also aim to establish continuous improvement processes in the company. This system finds the principles of the organization’s existence and is closely linked to the company’s success criteria.
It is a hierarchical hierarchy of management systems.
It is a multi-level hierarchy of different business solutions that show how a profit-oriented organization will carry out different functions such as marketing, sales, HR and purchasing to successfully accomplish the task.
Business management tactics
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The BMS functional group identifies which techniques and tactical approaches to implement business plans related to its business strategies. Tactical solutions should be raised only during the decision making part. They should be implemented according to the timelines contained in the business management strategy document. Contingency business plans can also be created and assigned to this tactical implementation practice.
Tactical implementation practice.
Business management tactics are defined as activities that follow business rules that have been identified in corporate policies. They bring business tasks and plans to life so that they can accomplish the objectives that have been prioritized.
Within this functional group there are also processes and guidelines for developing business management plans. The directives have practical guidance and instructions that show how managers can manage all tactical solutions. They include operations and procedures that show how executives should perform daily tasks and activities.
They include operations and procedures that show how executives should perform daily tasks and activities.
This group also directs personnel to complete the business solutions and recognizes execution plans that are consistent with management tactics.
Management styles .
There are several types of management that are common, including democratic, autocratic, paternalistic and laissez-faire.
Democratic management style is used when employees are able to provide input or input into business decisions.
An autocratic management style allows the owner of the company to be the person responsible for making all decisions and running the business in an entrepreneurial environment. When the best possible work environment is created for each employee, it is said to be a paternalistic management style.
Laissez-faire has the greatest employee autonomy and leaves decision making with little or no oversight by the business owner.
Traditional management is a hierarchy of employees with lower, middle and upper levels of management. The manager creates expectations of goals that employees must meet.
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Business management software is a computer program that collects and processes data from the main departments of a company.
That is, it is software that intends to simplify and facilitate the tasks of departments such as accounting, finance, HR, logistics and even marketing. Its use is almost a must in an increasingly digital economy, as it creates high added value in terms of efficiency and economic effectiveness.
However, although it is possible to systematize a multitude of tasks and activities, the corresponding personnel for each department are still necessary to interpret and control the data correctly.
Objectives of business management software
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The principal objectives of business software are:
Data collection on the company’s activities.
Gathering of data on the company’s activities.
Processing this data and interpreting it.
Identification.
Identify the opportunities and threats according to the interpreted data.
Control these data and interpret them.
Monitoring the evolution of the company in real time.
Monitoring the evolution of the company in real time.
Achieve efficiency in terms of time and profitability of the company.
Maintain the efficiency in terms of time and profitability of the company.
To facilitate the activities of the department and to be able to consult the data remotely.
These are some of the objectives of enterprise software, whose main goal, in addition to the objectives already mentioned, is to digitalize the enterprise ecosystem for greater efficiency in processes and in management decision-making.
Types of enterprise software
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According to the area on which the enterprise software focuses and the objective it pursues, it is mainly divided into the following:
Enterprise Resource Planning (ERP): this software allows its users to manage and analyze the company’s global operations and its resources centrally in a single computer application.
Enterprise Resource Planning (ERP): this software allows its users to manage and analyze the company’s global operations and its resources centrally in a single computer application.
Customer Relationship Management (CRM): In this case, the software is in charge of managing segmentation, sales and customers.
Supply Chain Management (CSM): The supply chain and its variations or areas of influence are the factors that the software is designed to manage and control.
Warehouse Management System (WMS).As for other programs or applications, there are a number of software groups that can be used in a corporate environment.
Some examples are office packages and, in particular, the well-known spreadsheet processors (MSO Excel, Google Spreadsheets, etc.).
A few examples.
Advantages and disadvantages of enterprise software
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Although the process of digital transformation or digitization of the company is synonymous with progress, each tool has its advantages and disadvantages, with the final balance being important.
Some advantages may be aspects such as the speed in data consultation, the systematization of tasks and its consequent time saving, or even the creation of reports through the appropriate use of big data. It is also possible to explore synergies or correlations between departments and look for improvement opportunities or problems not yet identified.
On the other hand, the disadvantage of using this type of software is that it can be too dependent on the digital environment, which is the biggest obstacle in a profession that requires certain digital skills in addition to specialization. In addition, the centralization of data can also lead to remote data theft (hacking).
Examples of business management software
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Although there is a wide range of business management software and applications, some of the best known ones are:
Although there are multiple accounting programs, these three are among the best known. It should be noted that, depending on the country or the needs of the company, you can choose one or another option among the dozens of such software on the market.
Now you know the basics about management software, remember that it is necessary to be trained in these to perfect their use and get the most out of it, if you are already considering implementing a business management software to your business you have come a long way, do not hesitate to review our article on business management to ensure that you apply all its features.
The aim of this social work is to unite local artisans from marginalized regions and distribute their work to more developed countries. Not only to increase sales, but also to meet quality standards.
What does Sourcing Indonesia do?
Sourcing Indonesia provides professional sourcing services to clients such as Argos, Signature Hardware, Grand Hyatt, Movenpick, Robert Manse, Benihana, Style Craft and Marche. They serve the needs of wholesale, retail and hospitality buyers from around the world, providing sourcing, sample development, order management, quality control, shipping and custom order fulfillment services.
Founded in 2000, Sourcing Indonesia is a US-registered company with offices in Bali and Java. Whether visiting suppliers with our team, from our extensive catalog of over 20,000 products or from your own suggestions, we strive to offer the highest quality products at the lowest prices in the market. We deal with retail and wholesale customers, restaurants, resorts and hotel companies, interior designers and project managers, as well as contracting companies that require custom-made products and services.
Sourcing Indonesia strives to provide the highest quality products at the lowest market prices.
Sourcing Indonesia strives to provide its clients with the most professional procurement and contract management services in Indonesia. Our customers realize the added value and added services we offer, and that is why we have so many long-standing and repeat customers.
Identity and Mission
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Sourcing Indonesia serves the needs of wholesale, retail and hospitality buyers worldwide by providing them with sourcing, sample development, order management, quality control, shipping and custom order fulfillment services. Founded in 2000, Sourcing Indonesia is registered in the United States and has offices in Bali and Java. Whether visiting suppliers with their team, from their extensive catalog of over 16,000 products or from their own suggestions, they strive to offer the highest quality products at the lowest prices in the market. They deal with retail and wholesale customers, restaurants, resorts and hotel companies, interior designers and project managers, as well as contracting companies that require custom products and services.
They deal with retail and wholesale customers, restaurants, resorts and hotel companies, interior designers and project managers, as well as contracting companies that require custom products and services.
We are an innovative and ethical company and work closely with local communities throughout Indonesia, promoting the Indonesian home furnishings and accessories industry and its heritage. We work with the World Bank Group and other non-profit organizations on export promotion programs. They have extensive knowledge of the Indonesian export market and are proud of our Indonesian business roots.
Why work with them?
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They recognize that they are not the only sourcing and purchasing agent and that you, have a number of options when choosing a partner. Refer to their resource of questions you should ask your purchasing agent as a standard minimum guide when choosing a purchasing agent. Do click here to find out why we think you’ll make a smart decision working with them.
Experience
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Since 2000, Sourcing Indonesia has been helping companies of all sizes with their sourcing and procurement needs. If you have worked with other intermediaries before and found yourself guiding the entire process, you will understand the difference a professional and experienced team makes. Let our experience in the sourcing process in Indonesia guide you.
We have a lot of experience in the sourcing process in Indonesia.
The greatest testament to experience and professionalism are the clients the company has worked with and, more importantly, retains.
The company has worked with and, more importantly, retains.
Professionalism
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Sourcing Indonesia raises the bar for purchasing and sourcing agents in that they are a professional organization with world-class facilities, products and services. Unlike many companies in Indonesia that may have a part-time interest, they are there 24 hours a day to respond to their clients’ needs. First time customers are often impressed by our attention to detail and level of communication.
Customers who come to us for the first time are often impressed by our attention to detail and level of communication.
Quality and value
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At Sourcing Indonesia, they do not believe that quality and price are mutually exclusive. Their extensive network of suppliers and manufacturer groups throughout Indonesia allows them to source and manufacture any product according to your price requirements. Their experienced team rigorously checks the quality of every order to ensure that their investment meets their long-term value objectives. Their customers regularly comment that the quality of the products they receive from us far exceeds their expectations.
The quality of the products they receive from us far exceeds their expectations.
Transparency and flexibility
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At Sourcing Indonesia, they always objectively pursue the interests of their customers. They are not affiliated with any manufacturer or business group in Indonesia, so their recommendations are not based on any special relationship. All their fees and costs are clearly established before they start working with our clients, so no unexpected charges will ever be introduced in their final invoices.
They also understand that they will never be charged for any of their services.
They also understand that buyers may be wary when first working with a purchasing agent, especially one based in a foreign country such as Indonesia. They will be happy to provide you with any information and/or assurances you need, including customer references.
Ease of mind
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Not only do they manage your orders from start to finish, but they also ensure that you do not have to worry about any ethical issues regarding the provenance of your products. For more than 5 years, its parent company has been working with the Ground-Based Business Initiative (GBI) of the World Bank Group to develop ethical business standards and improve working conditions for producer groups in Indonesia. Sourcing Indonesia’s customers can be assured that these ethical business standards are integrated into all the products they buy.
Sourcing Indonesia is a clear example of social entrepreneurship, not only is it a company that generates profits and feeds the families of its workers, but they are also focused on generating a sustainable economy, helping local producers by giving them solutions for their project and improving the business fabric of that region.
Guaranteed investment funds, as the name implies, guarantee that some or all of the capital invested will be preserved at a future date. In some cases, a guaranteed return is also offered.
Key concepts
Guaranteed Maturity Date: date in the future on which the fund’s units are guaranteed to reach a certain net asset value (guaranteed NAV). Only unitholders who hold their investment until the maturity date are entitled to the guarantee. If it is redeemed before that date, losses may occur.
Guarantor: an entity that undertakes to contribute the amount necessary for the unitholder to retain his initial investment if the guaranteed NAV is not reached as a result of the performance of the guaranteed mutual fund’s portfolio. If this amount is paid directly to the fund, it is an internal guarantee; if the unitholder receives this amount, it is an external guarantee.
Marketing period: period during which units of a guaranteed fund can be purchased without paying subscription fees.
Liquidity windows: some guaranteed funds provide for predetermined dates on which the unitholder can redeem all or part of the fund without paying redemption fees. This requires compliance with the notice periods set out in the prospectus. As these redemptions are made at the net asset value on that date, the guarantee does not apply and may result in losses.
Types of guaranteed investment funds
Depending on the scope of the guarantee, two types can be distinguished:
Fixed-income guarantees: at maturity, the guarantees ensure not only the preservation of the initial capital, but also a fixed and predetermined return (indicated in the prospectus in the form of annual interest, APY).
Guaranteed variable return: they only guarantee the initial investment, on the maturity date of the guarantee. They also offer the possibility of receiving a return linked to the evolution of various financial assets or indexes (according to more or less complex calculation formulas). Investors should note that if the underlying instruments do not perform as expected, they may not receive any return.
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What to do if the warranty expires
The unitholder should pay attention to the expiration date of the guarantee (which appears in the fund’s prospectus and in the periodic information sent to the unitholder), because at that time he must assess the situation and decide what to do.
In some cases, a new guarantee period will be established or will begin after the expiration of the guarantee for these products, which implies significant changes in their nature and characteristics. In other cases, the fund may cease to be a guaranteed fund and continue to operate normally with a different investment policy.
Finally, it is also possible that a fund may be absorbed by another fund as part of a merger process when the guarantee expires.
Investors have the following options:
Do not accept the new conditions: in this case, the participant must exercise the withdrawal right, which allows him to recover his investment or transfer it to another fund without incurring redemption fees for a limited period of time (at least one month). This period is specified in the letter sent by the institution.
Remaining a fund participant: this option does not require any action, since if the investor does not submit a redemption order during the period available for decoupling, he is deemed to have accepted the new features (or, as the case may be, the features of the acquiring fund) and wishes to maintain his investment. Thereafter, the new terms and conditions (which may include, for example, the application of a redemption fee) will apply to the participant.
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What should be taken into account for this type of fund?
In general, guaranteed funds do not always guarantee the investment, but only on a certain date: the maturity date of the guarantee.
Not all guarantee the return. Before investing, check whether the guaranteed investment fund offers a fixed and secure return or whether it only guarantees the initial investment.
If you decide to invest in a guaranteed fund,we recommend that you invest during the marketing period, and if you wish to redeem, do so during the expected period after the guarantee expires, or take advantage of the moments without redemption fees (liquidity windows) throughout the life of the product.
Guaranteed funds typically charge high subscription and redemption fees during the guarantee period to limit inflows and outflows (except during liquidity windows).
Redemptions made during the liquidity window are not covered by the guarantee. Although they are exempt from redemption fees, they may result in losses.
Be sure to read the product prospectus for information on the marketing period, guarantee expiration date, performance objective, fees, liquidity period, notice period, etc. It is important to read it both before investing and after becoming a participant.
It is important to carefully study the communications sent by the institution regarding the maturity and renewal dates of the guarantee.
How is the profitability of the investment fund guaranteed?
Guaranteed structured investment funds are the only ones that guarantee a predetermined return (fixed or variable). Defined in the internal regulations. Other funds cannot guarantee performance.
Is it possible to guarantee the profitability of an investment fund?
It is not possible to guarantee the performance of an investment in units of investment funds, except in the case of «guaranteed structured investment funds», which guarantee a return at the end of a period defined in their internal regulations. This purpose must be explicitly stated in the «objective» defined by the fund. These funds must describe in detail in the investment policy contained in their internal regulations the investment strategy they will follow, the funds’ investment approach and the risk hedging strategy they intend to use to support the relevant performance objective.
What are the advantages and disadvantages of investing in a mutual fund?
Advantages:
– Allows participants to access a variety of global markets, economic sectors and currencies that would not be possible with individual investment due to the high transaction costs and/or volumes required to generate funds. – Transaction costs and/or volumes required to create a diversified portfolio. – Diversification helps reduce the potential negative impact of a given investment through a variety of instruments. – Diversification helps reduce the potential negative impact of an investment due to the variety of financial instruments that mutual funds have access to. – Liquidity for quick access to money. Funds will be redeemed on the dates established for each fund. – Flexibility thanks to the broad categories of debt, equity, balanced and guaranteed funds. In addition, participants can choose between different funds with different investment strategies. – Affordability, as mutual funds can be invested starting at $5,000. – Convenience by entrusting investment management to a third party specialist who is dedicated exclusively to investment management.
– Convenience by entrusting investment management to a third party specialist who is dedicated exclusively to investment management.
– Affordability by entrusting investment management to a third party specialist who is dedicated exclusively to investment management.
Disadvantages:
– The profitability of investments in mutual funds is not guaranteed. Even in the case of debt (fixed income) funds, the result obtained upon redemption of the investment will not be known at the time of its effectiveness. – There are a large number of funds and categories of mutual funds, which can lead to confusion. – There are costs associated with the funds, which vary depending on the type of fund and the holding period of the investment.
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Can I know the return I will get from investing in a mutual fund?
No investment fund can predict or guarantee future returns, as they depend on the market values or prices of the financial instruments in which the fund’s assets are invested, except for so-called structured guaranteed funds.
No investment fund can predict or guarantee future returns, as they depend on the market values or prices of the financial instruments in which the fund’s assets are invested, except for so-called structured guaranteed funds.
Here is everything you need to know about a guaranteed mutual fund, if this type of fund does not convince you, since despite its name, it does not guarantee profitability, the commissions are very high and the yield very low, do not hesitate to review all about mutual funds here.
If you are looking to invest safely, chances are that you are looking for guaranteed mutual funds, currently it is very difficult to find these funds, since guaranteeing a return on investment in a 100% safe way is impossible, but it is true that many funds have an upward trend and constant for a long time.
With this book you will be able to find almost guaranteed mutual funds, you will learn how these work, what you have to take into account when joining one and what dangers may exist. Thanks to this book by Charlie Evans, you may be able to reduce your risk as much as possible.
I hope this article has been able to help you and that you get the most out of it!
At this time, for many entrepreneur, the idea of entrepreneurship becomes more sensible; which may be a good decision if you consider the prospects for entrepreneurs in the world, as according to the pandemic situation, different forms of entrepreneurship have emerged, with their different business ideas and with it different types of entrepreneurs.
However, an important point for entrepreneurship is the ability to determine which of the different types of entrepreneurs one most identifies with or would like to identify with. Knowing them can be critical to understanding the opportunities and advantages you have to avoid the failure statistics facing the industry. With this in mind, let’s highlight the different profiles that exist this time around.
Social entrepreneur
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The first type of entrepreneur is characterized by their tendency to perceive the local, national and global environment. Many social entrepreneurs are activists or environmentalists who want to solve social problems and change the world.
Their main goal is to improve the world by creating businesses that have a positive impact on the world. These entrepreneurs don’t measure their success by profits, but by impact.
They are not just about profit, but impact.
More likely, they create nonprofit organizations or companies that engage in socially beneficial activities.
Innovative entrepreneur
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This type of entrepreneur is one who constantly generates new ideas and inventions. Like social entrepreneurs, they try to change the way people live for the better. As their name suggests, innovation is more important to them than owning a business, but many of them turn their ideas into thriving businesses.
They are also the type of entrepreneurs who are not only innovative, but also have a strong sense of purpose.
This type of entrepreneur is usually an engineer who enjoys the technical rather than the operational aspects of the business. Their motivation is not money, but the mission and the impact of their ideas on society.
Hustler entrepreneur
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These entrepreneurs can be considered businessmen who work hard and put a lot of effort into their activities. They are not afraid to research trends. They think risk can be scary, but also exciting, to the point of believing that if you don’t take risks, you won’t reap rewards.
They believe that if you don’t take risks, you won’t reap rewards.
These entrepreneurs start small and work to grow their business to large proportions, relying on hard work rather than money. Scammers are willing to do anything to achieve their goals.
They are often willing to do anything to achieve their goals.
They usually start their own companies because they don’t want to work for someone else. They also tend to do it all and manage others.
Mimic entrepreneur
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An imitator is an entrepreneur who sees the success of others and tries to emulate it. They are inspired by what others have done and try to improve on what others have developed. Copycats can be considered a combination of innovators and impostors. They are willing to come up with new ideas and work hard, but they start by «cloning» businesses and copying what others have done.
Imitators are confident and determined and can learn from the mistakes of others. They like to play it safe and measure success by failure, so they copy successful business models to avoid making mistakes. However, copycats often catch up and compare themselves to the original creators.
They are not the only copycats.
Investigative entrepreneur
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Imitating entrepreneurs are the type of people who like to learn. They spend time researching all possible scenarios and strategy outcomes before starting or growing a business. In some cases, research becomes an excuse for inaction. They realize this through great preparation and information, so they have a better chance of a successful business.
These entrepreneurs rely on data, facts and logic rather than using intuition. They develop detailed business plans to minimize the likelihood of failure.
Determined entrepreneur
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Entrepreneurs of this type are also known as wantrepreneurs. Although they haven’t made it yet, they believe they will. They are rich in ideas, but are not consistently provided with the basics needed to run a successful business.
They understand the value of entrepreneurship and see that success is possible; this is their driving force. They want to enjoy the benefits of a successful entrepreneurial lifestyle and see themselves as people with ideas, but need more motivation to put all the pieces together or devote enough time to create a successful business.
They also understand that starting and growing a business is challenging and takes time.
They also understand that starting and growing a business is challenging and takes time, but they tend to jump from one idea to another and become serial entrepreneurs.
These entrepreneurs rarely achieve their ambitions of having a successful business.
Buyer entrepreneur
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This type of entrepreneur is one who uses his resources or assets to fuel his entrepreneurial spirit. These are entrepreneurs with full business experience. They know that buying a well-established business is less risky than starting a business from scratch, so they use their wealth to buy businesses they believe are underperforming. After taking over a business, they make the structural changes and adjustments they deem necessary to grow the business quickly and increase profits.
They are also the ones who have a strong sense of the business environment, and they are the ones who have a strong sense of the business environment.
These entrepreneurs measure success by the additional profitability that they are able to generate for the company.
Builder entrepreneur
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Builder entrepreneurs are flexible types who are always looking to the future for the next big idea. It is common for these entrepreneurs to run several businesses over the course of their lives, even in different sectors.
Builders measure success based on infrastructures such as the number of employees, the property they own and the amount of office space they occupy, among other things.
Builders are also seasoned entrepreneurs who have been through all phases of starting a business and have been successful. They are focused on expanding their business and leaving a legacy that extends beyond their lifetime. For all that, they consider their time their most valuable resource and try to use it wisely.
Opportunistic entrepreneur
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This type is characterized by great optimism and a mastery of promotion. They like marketing and sales. They are adept at recognizing opportunities to make money.
These entrepreneurs measure success by the amount of money they make and the amount of external recognition and approval they receive.
They have a strong sense of humor.
The hallmark is that, rather than building businesses from scratch or buying them, they look for business opportunities where they can use their skills and networks to generate residual and renewable income.
Specialized entrepreneur
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Finally, specialized entrepreneurs are those who tend to be in fields such as accounting, medicine or law. Specialists know what they are good at and have dedicated their entire careers to one field.
Specialists know what they are good at and have dedicated their entire careers to one field.
They measure success by their personal income and, because of their aversion to sales, their main weakness is traffic. They also refuse to take risks. They analyze every business decision first and use proven networking methods to find new sources.
They are not averse to taking risks.
These are the different types of entrepreneurs that we have been able to find in this year 2021, remember that to be a successful entrepreneur and achieve your goals within the business world, you have to have a good ability to adapt, know how to organize resources and have the ability to transform the products or services you have available into profits.
We recommend these books so that whatever your entrepreneurial profile is, you can find the way to do it and not stop growing.
Although a process flow diagram gives us a lot of information about the production process, it does not clearly show the process flow. If a process analysis is performed, this information is useful for improving the production process.
We record operations, inspections, shipments, delays and storage in the same order in which they occur in the flow chart. The movement path is indicated by lines, each activity is identified and placed on the diagram with its corresponding symbol, and operations and controls are numbered according to the process diagram.
The path diagram can be of two types:
De tipo humano: analiza los movimientos y actividades de la persona que realiza la operación. Tipo de material: donde se analizan los movimientos y transformaciones que le ocurren al material y, como en el caso anterior, se «sigue o persigue» al material paso a paso. Si es necesario visualizar o analizar el movimiento de más de un material o persona que interviene en un proceso, cada uno de ellos puede identificarse con líneas de distintos colores o trazos diferentes.
The route diagram complements the information contained in the process diagrams; it consists of a plan (which may or may not be to scale) of the plant or section where the investigated process takes place. This diagram records all the different material movements, identifying by means of symbols and numbering the different activities and the place where they are carried out.
The route diagram allows to visualize the transport, the advance and withdrawal of the units, the bottlenecks, the points of the highest concentration, etc., in order to analyze the work and see what can be improved (eliminate, combine, reorder, simplify).
PROCESS DIAGRAM TYPES.
According to its form:
Vertical format: In this format, the flow or sequence of operations goes from top to bottom. It is an ordered list of the operations of a process with all the information considered necessary according to its purpose.
Horizontal format: In this format, the flow or sequence of operations goes from left to right.
Panoramic format: the entire process is shown in a single graphic and can be seen at a glance much faster than reading the text, which facilitates understanding even for the ignorant. It records not only vertically, but also horizontally, several simultaneous actions and the participation of more than one position or department that the vertical format does not record.
Architectural format: describes the path of a shape or person in the architectural plan of a work area. The first diagram is very descriptive, while the second is mainly representative.
By purpose:
From the form: deals mainly with the form with little or no description of the operations. It indicates the sequence of operations or steps through which the form passes in different copies, through different locations and departments, from its origin to its submission. It shows the distribution of multiple copies of forms to several different people or units in the organization.
Shapes may be represented by symbols, scale drawings or photographs, or descriptive words. A horizontal format is used. The form is illustrated or labeled on the left side of the chart, followed by a horizontal progression, crossing each column assigned to organizational units or individuals.
Work: These abbreviated diagrams represent only the operations involved in the individual activities or tasks into which the procedure is divided and the department or unit performing them. The term work includes all types of physical or mental effort. A vertical format is used.
Methods: are useful for training and also represent how the various operations of a procedure are performed, by the person who is to perform them and in the specified order and by the person who performs them, but also analyze the purpose of the various operations within the procedure. If the data is important, the time used, distance traveled or some additional data is recorded. A vertical format is used.
Analytical: represents not only the individual operations of the procedure in the specified order and the person performing them, but also analyzes the purpose of the individual operations within the procedure. If the data are relevant, the time used, distance traveled or any additional observations are recorded. A vertical format is used.
Space: represents the path and distance traveled by the shape or person during the various operations of the procedure or part of it, and indicates the space through which it moves. If this is important, it represents the time spent on the route. The architectural format will be used.
Combined: represents a combination of two or more diagrams of the previous classes. The vertical diagram format is used to combine tasks, methods and analysis (what is done, how it is done, what it is done for). The panoramic format is used to combine different forms and tasks from different positions or departments.
Regarding presentation:
Block: is presented in general terms to highlight certain aspects. It presents a routine through a sequence of blocks, each with its own meaning and interconnected. It uses a much richer and more varied symbology than the previous diagrams and is not limited to predetermined lines and columns in the chart.
It is widely used by systems analysts to represent systems, i.e., to indicate the inputs, operations, connections, decisions, archiving, etc., that constitute the flow or sequence of activities of a system.
Detailed: Represent activities in their most detailed form.
What is the function of the path diagram?
A route diagram is a diagram or model, more or less to scale, that shows where certain activities are performed and where workers, materials or equipment move as they are carried out.
In organizations that manufacture goods and/or services, there are five critical factors related to the facilities, since it is in them where many of the problems that arise during the process or activity that is developed can be attacked, so it is there where there is a great opportunity to increase productivity.
These five factors are as follows:
Plant expansion
The physical layout of the plant.
Material handling.
Means of transporting materials.
Communication.
Information transmission systems.
Services.
Arrangement of elements such as electricity, gas, etc.
– Buildings.
Buildings in which the facilities are located
It is important to consider that the above factors are closely related, as they all interact and are part of the system in the facility.
In the case of material handling and plant layout, the problem that arises is that if there is no proper plant layout or proper material handling system, no matter how hard we try to increase plant efficiency, we will not achieve optimal results because the material and workers usually make a long and complicated journey during the production process with loss of time and energy and no added value for the product.
In terms of efficient plant layout, the objective is to develop a production system that allows the necessary number of products to be manufactured with the required quality and at the lowest possible cost.
If one wants to analyze the routing of materials in a plant, it is necessary to first recall the systems that are commonly used in the industry for production. The four main plant layout systems are 16:
Fixed arrangement of major components, in which the manufactured product does not move in the factory, but remains in one place and therefore the necessary machinery, labor and other equipment are brought there.
Disposition by processes or functions in which all operations of the same nature are grouped together.
Disposition by product, in series or in batches, in which case the machinery and equipment required to manufacture a given product are grouped in the same area and arranged according to the production process.
Group layout or work cell layout, which allows the use of group production methods, i.e., a team of operators working on the same product and having all the machines and accessories necessary to complete their work within their reach.
In somecompanies it is common to find combinations of two or more systems or parts of the plant with one of these types of layout.
Once these layout systems are known, it is possible to move on to an analysis of the routing of materials in the factory.
Although the analytical flowchart provides most of the relevant information about the manufacturing process, it is not an objective representation of the workflow. Sometimes this information is used to develop a new method. For example, before sizing a conveyor, it is necessary to determine or imagine where equipment or facilities could be added to shorten the distance. It is also useful to consider possible temporary or permanent storage areas, control stations and workstations.
Por ello, la mejor manera de obtener esta información es realizar un plano de la distribución existente de las áreas consideradas en la planta y dibujar líneas de flujo que indiquen el movimiento de material de una actividad a otra. Se denomina diagrama de recorrido de actividades a la representación objetiva o topográfica de la disposición de zonas y edificios, que muestra la ubicación de todas las actividades registradas en el diagrama de recorrido de procesos.
Clearly, the path diagram is a valuable complement to the analytical path diagram, as it can be used to plot the inverse of the path and find areas of potential congestion, facilitating better plant layout.
Kumon was founded by Japanese educator Toru Kumon in July 1958, when he opened the first Kumon Math Center in Moriguchi, Osaka. Its opening hours vary by location. Before founding the Kumon franchises, he was a teacher at Kochi City High School and Tosa Junior/Senior High School. Inspired by his own son Takeshi’s teaching, Kumon developed a curriculum focused on memorization.
At first, Kumon grew slowly, achieving only 63,000 students in its first 16 years. However, in 1974, Kumon published a book entitled Kumon’s Math Secrets, which caused its numbers to double over the next two years. However, Kumon promotes the principle of «no show work.» That is why Kumon is not so popular with parents and educators.» [citation needed] Kumon opened its first U.S. branches in 1983 and reached 1.4 million students in 1985.
Kumon soon added more educational courses, which led to a name change from Kumon Institute of Mathematics to Kumon Institute of Education. The first Kumon logo was created at that time. In 1985, Kumon’s success led to an increase in the number of students.
Tras la introducción del Método Kumon en la Escuela Primaria de Sumiton, Alabama, Kumon atrajo la atención nacional en los Estados Unidos. Se convirtió en el primer colegio de Estados Unidos en incorporar el método matemático Kumon al plan de estudios regular de matemáticas para los niños de 4º a 6º curso. Sumiton continuó utilizando Kumon hasta 2001 e influyó en otros colegios para que también adoptaran el método Kumon en su plan de estudios.
In 2008, Kumon had more than 26,000 centers worldwide with more than 4 million registered students. In 2018, 410,000 students were enrolled in 2,200 centers in the United States.
In 2012, Kumon Japan created Baby Kumon, a tutoring program designed for children aged 1 to 2 years old. Baby Kumon has not been used in most Kumon centers in other countries outside Japan. In North America, Kumon launched «Junior Kumon» in 2001, aimed at children ages 2 to 5.
What is the Kumon Method?
Kumon is an enrichment or remedial program in which instructors and assistants tailor instruction to individual students.
Each student receives an initial assessment of his or her abilities, called the Kumon Diagnostic Test. Each test ranges from 20 to 60 questions. Based on the results and the student’s study skills, the Kumon instructor creates an individualized study plan.
Students often begin Kumon classes as an «easy start» to help them build study habits, concentration and a solid understanding of basic topics. As students progress, Kumon instructors plan for students to study at a level of difficulty that challenges them to stay motivated, but is not so difficult as to discourage them. The study plan is regularly updated by the Kumon instructor to match each student’s ability. Students move to the next level after passing a mastery test based on speed and accuracy. Students do not take or pass the mastery test, but have the opportunity to practice and repeat the material until they demonstrate a good understanding.
Kumon has two main programs: the Kumon Math Program and the Kumon Native Language Program. There are also Kumon Japanese and Kumon Kokugo courses for Japanese-speaking students and a pencil skills program for younger students.
All Kumon programs are based on pencil and worksheets. The difficulty of the worksheets increases in small increments. It is recommended that students study for 15 to 30 minutes for five days a week, with the remaining two days of study time spent visiting a local Kumon center.
How much does Kumón cost?
Currently it is difficult to know how much Kumón costs, as it is a program that adapts to the needs of each family, depending on the attention required, the hours per day or days per week. The price can vary, however, we have found that the base price is around $90 which could vary depending on the country, so we will give you the contacts, so you can talk to them directly.
The contact telephone numbers of its different offices are:
From a lack of qualified «instructors» to less than 44% coverage of the curriculum to a host of other disqualifying factors, Kumon is far less helpful to students than many families realize.
Consider first the Kumon «Reading» program; that is easier to disqualify as a credible educational program. In short, it is not an «English language» program, but is usually taught by people for whom English is not their first language.
The placement tests in the Kumon «Reading» program are convoluted and – like the tests in the «Math» program – are explicitly designed to get the student to the lowest starting point. I have often found it to be a discouraging waste of time (for students) when an 8th or 9th grader starts with 3rd or 4th grade content. Such a student has little hope of getting to grade level in a time frame that is beneficial for them to even seriously consider pursuing Kumon.
The Kumon math program is vastly overrated in terms of its benefits to students; in fact, it is highly inefficient and in many cases downright ineffective, and not worth the investment of time and money for many reasons:
First, there is a difference between «arithmetic» and «mathematics». Using the term «math» to describe an arithmetic program is misleading and misrepresentative…whether unintentionally or not. Most standardized tests offered in the mainstream academic world (such as the SSAT, PSAT, SAT, and ACT) present students with word-based problems that go beyond mere arithmetic (in other words, math), assuming they have basic arithmetic knowledge. Arithmetic worksheets are available on many websites at minimal cost (even free!). Many of them are very viable alternatives to the Kumon «Math» program at a fraction of the cost.
The Kumon «Math» program emphasizes rote learning. However, rote learning is a very superficial form of knowledge accumulation. Of course, students have to memorize the basic operations of addition, subtraction and multiplication. But combining this into a 21-level series of arithmetic worksheets and calling it a «math» program is complicated.
The problem of curriculum coverage is one that undermines the ability of Kumon’s «Math» program to be considered a credible math program. According to Kumon’s publication, Kumon’s «Math» program offers less than 44% of what students should master, on average, in grades 1-8. And for a student to apply that 44% of the curriculum, he or she has to complete literally hundreds (if not more than a thousand) worksheets. Furthermore, after completing the same tired worksheets two, three, four or more times, the net coverage of the curriculum is still
Lack of experience of Kumon «instructors». When I applied to run a Kumon franchise, I was surprised to learn that you only need to have a sixth grade math level (according to the franchisor’s metrics) to open a Kumon center. Kumon franchise instructors are often viewed as «experts» in math; however, this is only true as long as they have the «answer book» for that level of arithmetic in hand. In addition, most Kumon franchisees could not declare English as their first language, and there was at least one Kumon franchisee in the system at the time who had no higher education.
I noticed that less than a handful of Kumon franchisees had any educational background… other than that required by the franchisor (which consisted of filling out thousands of worksheets), yet they had no educational background at all.
Then there is the issue of the supposed «independent learning» often presented by the franchisor. This may have more to do with the franchisor’s need to have dozens of students working at the Kumon Center with a very minimal level of support available to the students if the franchisee’s monthly bills are to be paid (>€3000/month rent, >35% franchisee royalties, utilities, program supplies and staff). The vast majority of elementary school students often do not have the ability – or desire – to learn independently. This is a myth propagated by Kumon.
Kumon franchisees are financially rewarded for having students on the so-called «ASHR» (Advanced Student Honor Roll) list. This precipitates artificially rapid progression of students through the levels (possibly without confirmation of «mastery,» another overused mythical Kumon term). What does the term «advanced» mean? What does «advanced» compare to without being aligned to the curriculum?
Something about the design of an educational resource or pedagogical reflection… that addresses the issue of scope and sequence. The scope of each level of Kumon is completely out of the sequence of how students learn math in conventional schools. And stacking 200 worksheets to cover multiplication or division (for example) is ultimately very inefficient.Why? Because young children often forget how to do it at other levels. Again, this is a very flawed assumption on Kumon’s part about how young minds process and retain information.
While at my Kumon center I have all student worksheets checked off, parents might ask if other Kumon centers follow a similar level of franchise operation or code of conduct. In other words, how do parents ensure how their daughter or son is actually doing or progressing in the Kumon programs?
During my tenure as a Kumon franchisee, it has not escaped my notice that several students have actually strengthened their arithmetic skills in Kumon math classes. However, I also know that students in this category (less than 5%) would have done well in math even without Kumon… especially if they had access to a qualified teacher (or tutor) with credible resources for learning. And the number of kids crying because of punitive worksheets far outnumbered the few who gained anything from the Kumon experience.
Parents need only have their child tested against a known educational standard to determine their child’s developmental level in math or English. Then seek an effective remedial program or procedure, as they would with any other important consideration in a child’s life. Entrusting a child’s educational future to someone who knows nothing about education – and who offers a program that is more than minimally deficient in many respects – may not be the wisest decision.
Bottom line: if your child is not being taught by a qualified educator – and with material that is not relevant to what he or she is doing in school – what good is an educational program?
Kumon es un claro ejemplo de emprendimiento social, es un sistema que pueda ayudar a tus hijos o puede que les haga sentirse más frustrados, este método ha sido creado para intentar ayudar, cientos de personas han terminado muy contentos con su paso por esta institución y les ha ayudado mucho a seguir avanzando, en cambio a otros no, es por ello que al final del día es decisión tuya decidir si decides confiar en ellos o no.
A growth strategy is a set of actions and plans that a company proposes to increase its market share by creating a stable and unique advantage in a competitive environment.
Thus, a growth strategy expects a company to increase its level of growth by increasing its share of sales, its profit margin, its market share or by expanding the company.
Internal and external growth The growth of a company can, of course, be achieved internally and externally.
Internal growth
Internal growth can be achieved by implementing growth strategies within the company. A company can grow by enlarging and expanding its manufacturing plants or representative branches, but it must always maintain control of its expansion.
In practice, internal growth is becoming a normal process in companies and is therefore considered natural.
Characteristics of internal growth
The main characteristics of this form of growth are:
This is achieved through the acquisition and introduction of modern technology.
Growth is gradual, which favors financing and the correct implementation of processes.
Maximises the company’s marketing and localisation process.
Internal growth is one of the company’s growth strategies. It involves increasing its production capacity, which means investing in factors of production (new equipment, new workers, machinery, etc.) that increase this capacity.
Internal growth is also known as «vegetative», «organic» or «natural» growth because the tendency to grow is inherent in the very nature of the company. The main reason for implementing internal growth strategies is to reduce costs. But they can also be progressive to eliminate competition, increase profits, guarantee supply, introduce new distribution channels, optimize management, etc.
In this case, the company grows by investing in its own structure, without the participation of other companies. At present, not many companies opt for this growth model, which tends to be more suitable for markets that are not very saturated.
In terms of internal growth, there are two main avenues: specialisation or expansion and diversification. Let us look at each of these.
Specialisation or expansion
In a specialisation strategy, the company continues to sell the same or similar products, but tries to increase demand. In this case, there is a natural continuity, but efforts are intensified for existing products, with an emphasis on improving sales in already conquered markets, but also on capturing new markets.
There are three types of specialisation strategies: market penetration, market development and product development.
Market penetration
One of the company’s internal growth strategies is market penetration. It consists of increasing the company’s share of the current market. In other words: sell more but without changing the products or services offered. The aim is to reach more customers (diverting them from competitors) or to increase the spending of existing customers.
A businesswoman holding a money sign with a sunset in the background.
Typical ways of achieving this are through increased advertising and promotion, improved quality of products or services, and price reductions. Examples are communication service companies that periodically call their customers to offer new services or benefits, such as faster Internet, etc.
Market development
It is about opening up new markets for a company’s existing products. Sometimes this expansion is geographic and sometimes it targets segments that are not existing customers, but may be.
In this case, the aim is to sell the product or service in areas or to groups of people who have not bought it before. An example would be a food such as vegetable soup, which is traditionally eaten by adults and then marketed to children.
Product development
Occurs when a company develops new products that are related to or complement an existing product. In this case, the development is aimed at the same market that the company already has.
The company usually targets tastes or needs that are not sufficiently satisfied in the current market. Usually, more or less substantial modifications of the product are made to target specific niches. For example, a beverage company will launch a «light» version.
Diversification
The second type of internal growth strategy is diversification. In this case, new products have developed that target existing markets or markets that have not yet been captured. The objective is to grow through new products and/or markets.
Diversification implies a certain departure from the company’s usual line of behavior. This type of strategy is applied when surpluses are available and are invested in supply or market expansion in order to avoid long-term risks and with the expectation of higher profits.
There are three diversification strategies: horizontal or related diversification, vertical diversification, and heterogeneous or unrelated diversification.
Horizontal or related diversification
Silhouettes of businessmen shaking hands with the city in the background.
In this case, the new product or service is related to existing products or services. It is not an addition or modification of traditional products, but a new product that builds on what already exists. Thus, the company does not change the industry.
The aim is to broaden the offer and attract new customers by offering a more complete range of products or services. A classic example is the fashion house Chanel, which launched a range of perfumes that have become as prestigious, if not more so, than the clothes themselves.
Vertical diversification
This occurs when a company incorporates new stages into the production process so as not to be dependent on third parties. In this way, it starts to move on to production steps that occur before or after its original activities.
The objective of eliminating intermediaries is to reduce costs and/or risks and thus strengthen the strategic position of the company. This is a type of business growth strategy that increases the company’s control over the entire process.
There are two types of vertical diversification:
Forward: when the subsequent stages of the production of a product or service are taken over. For example, when a factory decides to take care of the distribution and/or marketing of its products itself.
Retrofitting: When the stages prior to the production of a product or service are taken over. For example, when a company producing canned tuna decides to take over the farming and fishing of this raw material.
Heterogeneous or unrelated diversification
Heterogeneous diversification is diversification in which there is no relationship between traditional and new products and/or markets. It is also known as “cluster diversification” because the company becomes a cluster in which the products are not closely related, except that they sometimes use the same production technology.
There is also no relationship between customers, either in their act of purchase or in their consumption patterns. This is one of the forms of business growth used by companies such as Mitsubishi, which manufactures cars but also air-conditioning equipment.
External
On the other hand, a company can grow externally through mergers, acquisitions, and strategic alliances and enjoy the benefits of these processes. Mainly because by leveraging the advantages of other companies, costs can be reduced, which enhances the company’s performance.
Thus, external growth is achieved through financial participation or the purchase of other companies. With increasing market competition and global competition, this strategy has become very common.
External growth characteristics
The most important characteristics of external growth are:
It may be the only way to compete with very large and strong companies in the market.
External growth is faster than internal growth because the advantages are already developed by other companies with which it partners.
The investment is less risky because estimated results are usually obtained.
Within the methods of company growth, there are also external growth strategies. These are processes by which a company grows by investing in the acquisition, partnership, control, or participation in companies other than the original one.
In this case, the company grows not by investing in its own structure, but by investing in the structure of other companies that become part of its production capacity. In other words, growth is achieved by acquiring existing resources and capabilities.
This is one of the growth strategies for a company that is in a highly saturated market or wants to enter new markets quickly. It is increasingly used in more developed countries because it is cost-effective and facilitates access to strong market positions.
There are two main ways of realizing a company’s external growth: cooperation or specialization and concentration. Each involves specific strategies. This will be discussed below.
Cooperation or specialisation
This includes all the ways in which two companies join forces and act together. Organizations share information and resources to reduce costs and minimize risks.
Collaboration can be mainly technological, manufacturing or commercial. The most common forms of collaboration are a franchise, cartel, joint venture, joint venture, joint venture, EIG, and cluster.
Franchise
Franchising is a widely used business growth strategy in today’s world. It is an agreement whereby one company grants another the right to use a brand or commercial formula in exchange for periodic payments. The company that grants the right is called the franchisor and the company that receives the right is called the franchisee.
The franchisor transfers its brand image and also bears the costs of advertising and promotion. It also provides information and advice. In turn, the franchisor assumes responsibility for the business. This method is widespread and is used practically all over the world.
Cartel
A cartel is an agreement between two or more companies to fix the details of production and prices of products or services. It is an example of a company’s growth strategies that are prohibited in most countries because it is considered an anticompetitive pattern.
When companies agree on production and prices, they end up imposing their terms on consumers. Consumers will have no choice. Moreover, the agreement itself often leads to a lower quality of supply, because neither is better nor worse than the other.
Joint venture
A joint venture is a form of arrangement in which two or more companies team up to develop a new activity involving a certain degree of risk. In this case, all parties involved contribute capital or other resources.
Most often, this type of agreement is entered into between companies from different countries. The foreign company provides the capital and the domestic company provides the market knowledge.
Temporary Joint Venture
A joint venture, or UTE, is, as its name suggests, an agreement whereby two or more companies jointly undertake a project for a limited period of time. It is not a new company as such, but a form of temporary cooperation in which each company is jointly and severally liable for the debts incurred.
Generally, this type of cooperation takes place in the case of large or mega-projects that, due to their size or complexity, require the participation of several companies. However, they also arise between small companies when none of them is capable of taking on a given project alone.
Economic Interest Grouping
An Economic Interest Grouping (EIG) is an agreement between several companies to achieve a common benefit. It is a non-profit company whose objective is to improve the performance of its members or facilitate their development.
In this case, the partners are also jointly and severally liable for the debts, but they only cooperate in ancillary activities such as research, use of trademarks, etc., and not in substitute activities. They may carry out these activities jointly or separately.
Cluster
A cluster is a geographic concentration of companies with a common interest. Although they compete with each other, they also cooperate or provide services to each other.
Their proximity is also advantageous because it facilitates access to common specialized services and the purchase and sale of each other’s products. They can also collaborate on specific projects, have a better opportunity to share accumulated know-how, etc.
Concentration
Concentration is an external growth strategy that consists of the permanent merger of two or more companies. It occurs to expand capacity and market power. There are two basic types of mergers: participation and integration.
Participation
Participation occurs when one company acquires a share in the capital of another company without the latter losing its legal personality. This means that both companies are retained.
If a company acquires 80% or more of the shares, it obtains full control of the other company. If it acquires more than 50%, it acquires majority control. Less than 50% means partial control.
If a parent or parent company acquires a majority interest in several companies, called «subsidiaries», it is called a holding company. A holding company usually allows for tax incentives, i.e. lower tax payments.
Integration
Two sets of chess pawns form a crown.
Integration is a merger of two or more companies in which at least one of them loses its legal personality. In other words, it ceases to exist. There are two basic types of integration: horizontal and vertical. Let us see what each of them consists of.
Horizontal integration
This occurs when there is an integration between competing companies in the same sector.
This integration occurs mainly through two types of integration:
Pure merger: when two or more companies, generally of similar size, merge to form a new company in which they put all their equity. The old companies are dissolved.
Absorption: This occurs when one company absorbs another, whereby the latter ceases to exist and all its assets are absorbed by the acquiring company.
Vertical integration
Vertical integration occurs when several companies merge and control several or all stages of the production process. When control is complete, a «trust» is created. Vertical integration also occurs when companies merge to expand their business into wholesale activities.
There are two basic forms of vertical integration:
Upward or downward: when companies seek to take control of suppliers. Also when a wholesale organization takes over manufacturing activities or when a retail company integrates wholesale activities. Downward or forward: When companies seek to take control of distributors or when a wholesaler takes over retail activities.
This has been our little guide for you to know the type of growth strategies that you can apply to develop your company or your personal project. Remember that you do not need to be the owner of a company or have large amounts of capital to carry them out, remember that you can always find people who can be found in the same situation as you, and you can collaborate to help each other. I leave here a recommended reading, so you can expand your knowledge about this type of strategy, and you can expand your knowledge. During the article we have left you more books, so you can go deeper into any material, but our required reading to understand the concept is “The management of the growth of the company”.
