Question

HowRu, a private card business and its subsidiary, have a 14% share of the greeting card market. The card business is subject to seasonal cycles, with sales being highest during the holiday season. For this assignment, please complete the following:

Discuss at least 5 steps to diversify the card business.

Please give at least 6 suggestions of how and where funds can be allocated for new investments.

Answer 1

Ques 1:Discuss At Least 5 Steps To Diversify The Card Business.
There are five steps a business can diversify the business card.
a)The first is Assets. The organization should get the right asset allocation to ensure a healthy return. The value of assets can move independently and for different reasons. Shares have a tendency to to move in line with the fortunes of the company while bonds are subjective to interest rates. Property values are connected with the performance of the domestic economy .
b)The second is the Sectors .Once an organization has decided on the assets they need, they need to diversify further by investing in various sectors more so those that are highly correlated to each other. This helps make sure that the portfolio is protected from dips in certain industries for example when a certain sector suffers a downturn.
c)The third step is Geography. The organization needs to invest in different regions and countries. This will help reduce the impact of stock market movements as different markets are not always correlated to each other. For example, when the stock market in a certain country performs poorly, it doesn’t mean that the market of another country is negatively affected. A well-diversified portfolio in any market condition is important as an investor can never be sure of the market condition at any moment.
d)The fourth step is investing across a range of companies to ensure it doesn’t go bust when hit by bad times. It may invest in shares, bonds, currencies or properties to spread risks around. The other step is the organization being aware of over diversification. Over-diversifying may hold back the capacity of an organization to grow and thus, should not invest in more than 30 investments.
e)Finally, professional advice is a must for investors especially those without the knowledge and confidence to make investment decisions.

(1) diminishing a business' dependence on one or few pay sources,
(2) wipes out recurrent and occasional item variances by making products and ventures in view of an alternate request cycle,
(3) getting a higher development rate,
(4) entering a contender's center business.
(5)Acquisiton of competitors business to increase market share

Suggestions of how and where funds can be allocated for new investments
The organization will get financing by one of the 6 choices recommended underneath.
The organization will employ programming designers to make the custom programming in house. Likewise, the organization will have in house client benefit delegates to offer help to welcome card programming clients. The organization will create welcoming card programming. The product will be sold in stores, which will incorporate the welcome card supplies to make 50 welcoming cards. Keeping in mind the end goal to build edges, the product will be sold on the organization's site also. The organization will promote the welcome card programming on print, TV and magazines that are adapted towards ladies, which are the greatest client base.
The organization can offer stock by means of an Initial Public Offering on the essential securities advertise. The Initial Public Offering of stocks that are sold out of the blue. The cash produced from the offer of the stock will be utilized by the organization to fund and develop the business. The Initial Public Offerings stocks are offered in like manner and favored stock. The endorsing firm will decide the sort of stock offered and the stock cost and the fitting time to offer the stock.
Also the organization can pitch securities to people in general by means of the essential securities advertise. The organization will offer securities specifically to the financial specialists to create reserves for the business. The assets will originate from institutional, high total assets speculators and individual financial specialists.
A convertible security is a bond or a preferred stock that is converted into a share of a company's common stock. Typically, the holder of the convertible security decides if and when to convert the security. The convertible security converts to common stock at a fixed price. The purpose of issuing a convertible security is to raise money. The convertible securities are sold for a specific reason. Another way is that the company can sell stock directly to individual investors. Once the shares are sold, the investors can be allowed to trade stock on the open market. This will work best for established companies.
The organization can back the assets through a bank credit. The advance will convey a settled financing cost, month to month or quarterly reimbursements and built up a reimbursement date. The bank will offer middle of the road and long haul credits. The middle advance is normally under 3 years and reimbursed on a month to month premise. The long haul credit is ordinarily in the vicinity of 3 and 10 years, however the term can be the length of 20 years. The credits regularly required quarterly or regularly scheduled installments and supported by insurance.
The organization can acquire reserves through a Small Business Administration (SBA) ensured credit. The SBA commonly ensures 80 percent of the credit chief. Likewise, the bank or business loaning foundation will give the client a 10 year term. The SBA ensures generally $12 billion every year in credits. By acquiring a SBA supported credit, the installments will be lower and enable the organization to get an advance with lacking insurance.