Customer satisfaction and swot analysis - Free Essay Example

Sample details Pages: 18 Words: 5285 Downloads: 6 Date added: 2017/06/26 Category Statistics Essay Did you like this example? ABSTRACT As the project is about Customer Satisfaction and Swot analysis of Thesis Binding, It is a marketing research project, for that I have collected the data by using various techniques like questionnaire and by telephone as well. The questionnaire made in different formats for in-house and out-house separately. Out-house survey is being done in the various university of Kolkata like Calcutta university, Jadavpur and so on. Don’t waste time! Our writers will create an original "Customer satisfaction and swot analysis" essay for you Create order And for in-house survey, we are surveying those customers who have already done their thesis binding from Dhar brother. Various parameters in the questionnaire have been used to measure the satisfaction level of the customer and also to find out what are their needs or what they exactly want from the company and to determine the swot of company. After that analysis of collected data will be done to get out conclusion and recommendation The objective of project is to get idea of what kind of promotion strategies is required by company to increase sales and to attract more customers and apart from that what new services are required company to increase customer satisfaction level and what is the strength, weakness , opportunities and threat for company so company can take action to use opportunities, and to mitigate threats and weakness to get competitive advantage and increase business revenue and profits. INTRODUCTION ABOUT THE COMPANY Dhar Brothers is a family owned business base in Kolkata, West Bengal and it was founded by Late Rash Mohan Dhar in the year 1930. Dhar Brothers started with only book binding in a very juvenile stage and then by the help of supportive community and companies hard work, Dhar brothers is known as a reputed Thesis paper maker in Kolkata . The Dhar Brothers have a huge client base of student or professionals who need binding of their thesis or project work. The companies target customers who are doing research work as well as those students doing their P.H.D. from all the universities of Kolkata and its nearby cities or areas. Over the years, Dhar Brothers have broadened our job profile, which now includesDATA PROCESSING, PRINTING, BINDING, PICK UP DELIVERY. It is possible because of Mr. Kishore Dhar who did Herculean task with heart and soul together. Driven by technology, Dhar brothers is able to serve many outstation and foreign clients as well with whom we get in touch through mail orders. Dhar Brothers have experience of more than 75 years in this trade. Dhar brothers provide customized services to scholars to all the universities according to their specifications. Companys vision is customers delight. And Dhar Brothers hope is Dhar brother achieved it, and with their blessings, Dhar Brothers are now a most recognized thesis company in Kolkata. Dhar brothers is a largest thesis binding company in kolkata and is known for its superior quality, customization and betterservices to its customer or picking up online delivery.Company have skilled labour or other resources to serve the customer better . Kinds of services provide by the company Hard Binding: Hard bound books are very rigid and finished to a high standard with edges covered throughout encasing up to approximately 500 pages. These books are cloth covered in a wide variety of colours and lettering on the spine can also take front board lettering. Soft Binding: Soft bound books are cut flush on the edge and are rigid enough to stand on a bookshelf encasing up to approximately 500 pages. This bookish cloth covered in a wide variety of colours and lettering on the spine. We dont advice front board lettering. Simple Binding: Card back and clear plastic front can be used as a temporary binding, but is strong and attractive enough for permanent use. Up to 300 pages 90 g/m2 . Thesis-CD-pockets: A transparent PVC pocket for holding CDs that you might want to submit with your thesis. These are inserted onto the inside of your thesis rear cover. THESIS CRAFT POCKET: An elegant handmade pocket built into the rear board of your thesis. This is suitable for holding loose sheets, photos, maps, and other documents. It can hold up to 20 A4 sheets of paper. Introduction of project Title of project is Customer Satisfaction and SWOT analysis. In this first to understand the business of company and what kind of services are provided by the company to fulfil the need s and wants of customers regarding their thesis binding, the issues which we have to solve in this project is to understand that, customers are satisfied with the current services provided by the company or not and what kind of services customer are expecting from company. So that company can provide those services to customer, to give them value of money and increase customer satisfaction. To understand all that discussed above, different techniques have been used to collect the data, these techniques are survey of customers by questionnaire, telephonic strategy, personal interviewing. After collecting the data sample size will be taken for the analysis so that we can come to some conclusion regarding the customer satisfaction and some recommendation can be provided to solve the issues. As discussed above sample size will be used for the analysis of data by using various techniques .Considering all the points, SWOT analysis will be done as per the present situation. As DHAR brothers is a only big thesis binding company in the Kolkata region so it is the greatest strength the company has and to find out the new opportunities, and how to tapped these opportunities and find out weakness and threats of company, and find out the ways to solve those. NEED OF THE STUDY The study has been done to know the different type of services provided by Dhar Brothers and what is the customer satisfaction level regarding different type of services of Dhar Brothers and to know the customer response about what kind of improvement they want from company, so Dhar Brothers can take action to fulfil their needs. This study also covers the promotion strategies required by Dhar Brothers where company is lacking. Through this study I came to know the customer satisfaction and SWOT of Dhar Brothers. OBJECTIVE OF the PROJECT The main objective of the project is to understand Customer satisfaction and Swot analysis of thesis binding in Kolkata are as This project would help Dhar Brothers in understanding the customer needs and get feedback on their product and services. Understand the customer satisfaction and Swot analysis for their thesis binding. Understanding what kind of services and customization customer expects from company regarding their thesis binding work. After understanding customer needs, efforts to fulfil their needs. In devising new methods of approaching their customers and in the process making them aware of various products and services on the basis of above needs of customers. To increase the services after understanding the customer requirements to serve them better. To make good relation with customers so that they will recommend other customers to company in future for their thesis binding, that helps in increasing sales of company. TO check present services quality is matching with the customer requirements or not, and what kind of up gradation is required. Different methodology will be used for the data collection and data analysis. Collected data will be analyzed properly to find out what are the requirements of the customer. To understand SWOT of Dhar Brothers. TO understand how to mitigate threats and remove weakness and what is the new opportunities. INFORMATION REQUIRED Various services being offered by Dhar Brothers. To understand the working procedure of company. The kind of responses received from the customers during survey to get information about customer needs and wants and apart from that to measure their satisfaction level. Various tools of promotions are required by company to increase awareness and to build brand image and understanding the level of impact it has on the customers. The form of activity which is effective from the point of view of customer satisfaction and Swot of company. Details regarding the customer satisfaction level regarding various services of Dhar brothers. Information regarding what is the strength, weakness, opportunities and threat of Dhar Brothers. Finally innovative methods of targeting the customers and building a brand image and increasing the customer satisfaction level by providing them value for their money. REASERCH METHODOLOGY Method of data collection:- Primary sources:- It is a marketing research project so to collect the data two type of questioner is used for survey. I. In-house questioner is used to collect the data of existing customers of company at the time of delivery of their thesis. II. Outhouse questioner is used to collect the data from different universities of Kolkata. Secondary sources:- It is the data which has already been collected by someone or an organization for some other purpose or research study .The data for study has Been collected from various sources: Companies website Other Internet sources Past Data of organisation Time: 3 months Statistical Tools Used: Simple tools like bar graphs, tabulation, line diagrams have been used for analysis of data. LIMITATIONS OF THE STUDY Very small Sample Size as compared to the target customers. Therefore a possibility of making error. Limited amount of times as the survey is time consuming. Geographic limitations. Project is only to understand customer satisfaction and swot analysis for thesis binding not for other type of bookbinding. Collection of data is only from existing customers required services not from customers who have already taken services in past.. MainTEXT Description of project in brief As I explained above in introduction the project is to measure the customer satisfaction level and to find out Swot analysis of thesis binding, So that company can come to know about satisfaction level of customers by its presently available services and came to know about what kind of up gradation is possible to upgrade our services and to serve the customer in better way and to measure that if any step company have taken is it feasible or not. Companies main focus is services oriented because the company is looking for expanding the business and to attract more customers, and to get the idea of new trends of thesis binding what customer expect from the company so that company can fulfil their wish of customers that helps the company to retain its present customers and to attract new customers . Recently Dhar Brothers start new services like online delivery services to the customers , that works as more beneficial for both the companies and customers point of view , most of the time what happened if customer have not time to come at company or away from Kolkata like from different state or cities than customer can submit their orders on companies website, where everything is mentioned about services of companies and by filling the demand form according to their requirement and made payment online , from where company take the customers order and provide them service and finished the work of customer within 48 hours after that if you are from Kolkata, you can take delivery from company and if you are from outside the Kolkata and if you cant come , your thesis would be courier on your address. TO understand the SWOT of company to get advantage from competitors and minimize the risks of business, as I discussed after clear understanding of strength, weakness, opportunities and threat, company can take necessary steps to maintain their strength as a tool of success, and take the advantage of new opportunities and work on remove the weakness, who are coming in path of success of company and mitigate the threats. The strategy used to proceed the work, first after clearly understanding the work of company and what to do, I first prepare two questioner, one is for in-house survey to collect the data from customers at the time of their delivery, to get their valuable feedback and to measure their customer satisfaction level and to get the idea what kind of new improvement is required according to them, and what company should do to serve them better in future , so that companies sales will increase in future second is outhouse questioner to collect data by surveying PHD or those people who are doing research work across different universities of Kolkata and then after collecting the data and proper analysis of that data will be done by using different technology to find the conclusions of problems and recommendation and what steps should be taken to improve services and to expand business or to attract new customers. Market growth rate of company Market rate has been found out by using the data of the customers who already have done their thesis work in 2009 and 2010. The data has been shown below Number of copies in 2009 and 2010 Month 2009 2010 January 750 740 February 582 414 March 529 878 April 691 940 May 1132 1435 June 931 959 July 797 1020 August 934 1103 September 523 739 October November December 1198 785 1092 1267 713 1089 Total 9944 11297 Source: this data is based on the no of copies for the thesis binding month wise of Dhar Brothers. The data which have been shown in the given table is the number of copies which has been completed in the year 2009 and 2010. From the collected data which have been shown above shows that there is an increment in the growth rate of 13.6% in the year 2010 compared to 2009. This shows that customer base of Dhar brothers is increasing every year so to meet with the demands of these customer and serve them better company have to increase their present resources, like skilled human resource , Machinery, better infrastructure etc. to meet with this challenge in future. Market Size Market size plays an important role to find out the areas where we can target the customers or it shows which area we should focus for the thesis binding. The market size can help the company to come to know about the untapped areas or the areas from where less business is coming, so can company can make strategy and can take right decision to cover these untapped areas and areas from where less business is coming. Number of customers coming in Dhar Brothers from different universities can be understand by the help of below graph, here In this graph I have not showed customers of all the universities I just try to show where we have to focus more to increase business and sales of company. Source: This data is taken from Dhar Brothers. Horizontal Axis: Months Vertical Axis: Number of copies The data shown in the graph is the number of copies that have been taken on the vertical axis and month has been taken in the horizontal axis. As we can see from the above graph that in all the Four months from January to April, the number of students coming in company from Calcutta university is more than any other university. And from the other university like Rabindra Bharthi is comparatively less than the Calcutta university, So our market Size is Rabindra bharathi and Vidyasagar University as well as B.Ecollege, Jadhvpur university . The message which I want to clear with the help of this above graph is that, here in our company customers from Calcutta university is coming more than all other universities of Kolkata, so these universities are like the areas from where less business is coming except C.U., So company should take steps to increase business from these universities, by doing promotion ,make better relationship with guides of students. Demand of services Which services provided by Dhar Brothers is more in demand is easily understand by below graph- Source: This data is taken from survey of customers and from Dhar Brothers past data. The data collected is of the year 2011 from January to March. From the above graph we can find out which product of the company is in more demand. As we can see in the graph hard binding is in more demand as compared to the other demand, so company should more focus on hard binding service to satisfied the needs and expectation of customers from Dhar Brothers Because this service is more in demand and as well as company should also focus on superiority of other services. METHODOLOGY REASERCH METHODOLOGY Various products/services being offered by Dhar Brothers. The kind of responses received during survey of customers. The form of activities which is effective from the point of view of Customer satisfaction and Swot analysis. To understand what kind of services and customization customers want. To understand the customer needs and expectation from company. Developing innovative methods of approaching the target group . The survey conducted, would help in identifying the perception of a customer about services of company, which would further help in identifying the customer need and expectation and what kind of customization customer wants from company that in other words can say to provide value of money to customers . The survey conducted would give insight regarding whether Dhar Brothers should increase the services for their customers and if yes then in what type of services. Design of Questioner: Two types of questioner is used for survey in house and outhouse. Design of inhouse questioner: In-house questioner is designed for survey of in-house customers at the time of delivery of their thesis binding, the parameter have been taken in this questioner by keeping in the mind that the facts these customer have already taken the service of company, the following parameters have taken, to measure the satisfaction level of customer and analysis of swot areas. Details of customers include name, university, area of thesis, contact number, email-id. From where customer came to know about company? How much customer satisfied with printing, paper binding and price with respect to quality, delivery service within 48hours? How much customer satisfied with service like, waiting time, Employee Behavior, Working environment? What is the strength of company, measurement is done on the basis of some point, for that I attached the questioner at end of project? What is the requirement of customer? At the end an open ended question to get the customers view to serve them better. Design of outhouse questioner: Out house questioner is used for survey of PHD or research students in different universities of Kolkata, in this questioner points have taken by keeping in mind that these customer will use the service of company in future because the Dhar Brother has monopoly in the market regarding business of thesis binding, so by getting earlier the idea of expectation of customers and what type of service they are looking for , so the company will provide that service to customers in future, the point have taken in this questioner are as follows. Details of customers include name, university, area of thesis, contact number, email-id. University name from which the students belong to so that company can find out from which university maximum students will apply for the thesis binding. One question has been put in the questionnaire regarding the month for the thesis binding so that company can get to know their completion of project in advance and will try to capture by using the phone number to increase the sales of company. Selection of sample size: For measuring customer satisfaction and Swot analyisis I have collected the data of 170 customers by using both in-house and outhouse customers. In this project we have considered only those people who are doing their research work either from PhD or their own research work like thesis on literature. (note: because of time constraint could not gather much ). Data collection methods: Data will be collected by survey and interviewing of both in-house and out house customers. For in-house data collection surveying and interviewing of customers will do at the time of delivery of their thesis binding, so customer after checking their delivery can have the idea of quality of their binding and give us the proper response regarding their satisfaction level and other methods I m following to collect the data from our past customers by calling them on their contact no. or by the help of e-mail id and in survey of in-house customers I havent faced any problem. I have collected the data of 170 customers. And for the outhouse survey, my target was PHD students or students who are doing research in different universities of Kolkata , So by visiting in different Kolkata universities and interviewing these people , I have collected the data I had approached in following universities of Kolkata like Calcutta university . Rabindra Bharti , Jadhvpur univer sity, Shibpur B.E college, WBUT etc. Challenges faced in Out house Survey: Initially after visiting in Kolkata universities following problems have come in my path are as To enter inside universities and do the survey work. How to meet PHD students because there are no regular daily classes of PHD students. Sometimes Communication problem because here people mostly communicates in Bengali. To take permission from authorities to do survey work and to find out at what time I can meet with PHD students. Strategies used to overcome these challenges: By using the Reference of college identity card and doing research for academic requirement , till know I have got success to meet with PHD department authorities in universities like Rabindra Bharti universities and Jadhvpur university. I m trying to get the record of students PHD departments o like contact number or email-id , so that I can contact them to collect data . From project guides and PHD authorities get the time when I can meet with these peoples. FINDINGS AND ANALYSIS INITIAL findings The various findings of from the information collected are Dhar Brothers only do binding of thesis of research work. By a comparative analysis of customers of different universities of Kolkata as well as from other states and cities, it can be understood that company has reasonable price with respect to overall quality and Dhar Brothers has monopoly in this thesis binding business no other such big player available in Kolkata for thesis biding. Company imports material for thesis binding like paper, cover page material from Netherland, so the focus of company is to provide best quality and service to our customers. Customers here comes from other states and cities also apart from Kolkata, like Darjeeling, Jharkhand, Bihar, Assam etc., this shows that company has good Brand image , and known for superior quality and fast services. Company has efficient resources, adequate infrastructure and skilled labour and working environment to do the work. Customer appreciate the online order service of company and Home delivery to customers who are away from Kolkata or have some problems to come, this service will help customers to finish their work at time and cost effective also. Customers also appreciate the fast delivery service of company within 48 hours. Hard Binding service provided by company is more in demand. Dhar Brothers has good brand image in this business of thesis binding. ANALYSIS Data which have been collected through questionnaire from in-house and out house will be used for the analysis of data. As the data in the questionnaire contains various different parameters like quality price, delivery system, waiting time, location and others. These parameters will be used for the data analysis and found out the relation between the different parameters. The target group for the survey is PHD students and those who do research work of age group normally more than 25 years of age. Sample Size: 170 (Note : due to time constraint, sufficient amount of response from customers was not gathered) Customers response how they come to know about Dhar Bothers: Friends (Who have used service in past)-62% Guide- 16% Others-2% Family members-12% Internet-8% Graph of customers response how they come to know about Dhar brothers. (Source: This graph is drawn on the basis data collected by customers during survey jan.-april) Above graph shows clear representation from which source number of customer comes here. As we clearly understand from above data and graph Dhar Brothers required more methods of promotion to increase sales of their company because 62% customer come here are recommended by their friends, so company should do promotion in News papers, and Internet On major Research sites so during research of their work, Customer come to know about Dhar brothers, that will help company to boost their sales and by giving demonstration in education fares and in universities. Customer Satisfaction Analysis The parameters which I have taken to measure the customer satisfaction level are , printing quality, paper quality, binding quality , service within 48 hours, waiting time, adequate infrastructure, working environment price with respect to quality . It can be better understand by below graph. Customer satisfaction on the basis of quality of material used for Thesis binding work. (Source: This graph is drawn on the basis data collected by customers during survey ,jan-april) As by analysis of above graph it is clearly visible that customer satisfaction level is very high, customers are highly satisfied by the material quality used for thesis purpose like paper, printing quality, Binding quality, so this is good sign for company. Paper quality 85% are highly satisfied and 15% are average satisfied there is not even one customer who is not satisfied Same is the case with printing and binding quality, from binding quality 80% are highly satisfied and 20% are average and from printing quality 77% are highly satisfied and 23% are average satisfied. Customer satisfaction on the basis of services of company and proximity to location (Source: This graph is drawn on the basis data collected by customers during survey, jan.-april) From the above graph it is clearly visible the customer satisfaction level of services provided by company, customer satisfaction level is very high except some parameter like waiting time, Proximity of location. So company have to work on reduce the waiting time by increase human resource and more systems to provide fast service and other one proximity to location the company can do improve it by taking online demand and home delivery to customer because to open other branches in different location is not feasible for company it requires lot of resources and wealth. And overall if we focus customers are highly satisfied. This shows that feasible steps which companies should take to improve services and customer satisfaction level. Customers satisfaction level regarding overall quality with respect to price Customers satisfaction level regarding overall quality with respect to price is given below with the help of graph. (Source: This graph is drawn on the basis data collected by customers during survey from January to april) From the above graph it is clearly understandable that only 10% customer is very low satisfied with price of Dhar Brothers and 90% are satisfied with price of company with respect to quality out of which 62% customers are highly satisfied and 28 % are average satisfied, so overall customers are satisfied with price, company should not bothered much about those 10% low satisfied customers. Companys main focus should on 90% of customers. From the above three graph used on the basis different parameters it is cleared that customers are satisfied except some parameters like waiting time and proximity to location. The data have taken in all the graphs are of four months January to April. Analysis of what was the requirement of customers The parameters we used for analysis of requirements of customers are services provided by company like Formatting, Printing, Binding Printing, Binding Copier and Binding Only Binding (Source: This graph is drawn on the basis data collected by customers during survey from January to april) It would be understand from the above graph, what percentage of customers taken which category of service, company focus is that every customer should take our first category of services formatting, printing, binding it would give more profit to company but after collection of data and survey of customers it have been found that those customers who have not good knowledge of formatting only those customers taken this service and those who can do formatting done by self to save cost. SWOT ANALYSIS Strengths: Company has monopoly in market in the business of thesis binding. Company has adequate infrastructure and machinery. Company has skilled labour to provide superior quality services. Working environment of Dhar brothers is favourable for customers. Dhar Brothers is very cost effective for thesis binding with respect to quality. Online Delivery system and on time delivery. Delivery service within 48 hours. Imported material from Netherland used for the purpose of to provide good quality to customers. Strength of Dhar Brothers according to response of customer during survey and collection of data can be understood with the help of below graph. (Source: This graph is drawn on the basis data collected by customers during survey from January to april) From the above graph strengths of of Dhar Brothers easily understood on the basis of different parameters like delivery service 91% customer responds, it is a high strength of company and 9% responds it is average strength of company same with other parameters cost effective, infrastructure, employee behaviour and quality can be easily analysed by the help of above graph. Weakness: Waiting time is high according to customers. On Companies website doesnt have information regarding prices of different categories of binding. On companies website there is no information of delivery time. Home delivery Proximity to location according to some customers According to some customers company should have Hindi communicator as well for those who cant understand Bengali or English. Limited Man power Requires more machines, space, and human resources. Opportunities: Company should do more promotion in nearby cities or states and in Kolkata to increase awareness about Dhar brothers because mainly customers come to know about Dhar brothers from friends and family, and to cover the untapped are and increase sales. Company should do promotion on internet to increase sales. Company should start home delivery service. Company should expand business because market rate is increasing every year as I mentioned above, so you Dhar Brothers should expand their working space. Company should target that universities from where less students are coming by help of promotions as I discussed above it can be understand by below graph of number of students from different universities that shows number of customers from different universities in 2011 from January to April. (Source: This graph is drawn on the basis data collected by customers during survey jan.-april) Vertical axis: No. of copies Horizontal axis: Months From the above graph point which I want to clear that here in Dhar Brothers more customers are coming from CU, Then followed by Jadhvpur University but less students are coming from other universities of Kolkata. Some are mentioned in graph so company opportunity is to target these universities from where less students are coming, by doing promotion to increase awareness about Dhar Brothers and by demonstration Quality work in these universities to increase sells and by making relationship with guides of students. Threats: During my entire project and also by discussing with faculty guide I havent found any threats. Conclusions Customers are highly satisfied by quality of material used for thesis and services provided by company Growth rate of Dhar Brothers is increasing every year. Dhar Brother has monopoly in this thesis binding business. Dhar brother is known for their services. Charges of company are reasonable. Company has adequate infrastructure but as market is increasing so Dhar Brothers should update their infrastructure required more space in future. Dhar Brothers has skilled labour. Dhar Brothers should increase manpower to reduce waiting time. Dhar Brothers delivery service within 48 hours and online order and courier facility to customers, those are away is appreciated by every customer. Dhar Brothers should Update their companies website and provide every information regarding price, Deliver etc. Dhar brothers should do promotion to captured untapped universities of Kolkata or nearby states. Working environment of Dhar Brothers is appreciated by customers. Dhar Brother has good brand image in thesis binding business. Dhar brother is known for its on time delivery services

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I’ve learned One of the first things that I have learned since Eve been In this class was how to be better at communication. Often at times we as people seem to only think about ourselves, It’s not a good thing but we are human. In the world of business I am my own brand but I’m not the most important piece in the puzzle. We will write a custom essay sample on Things I’ve learned or any similar topic only for you Order Now Teamwork is the key because the same people that I see going up the ladder will most likely be he same people I see coming down. With that being said, I will try my best not to burn any bridges because you never know who or what that you might need In life. The second thing that I have learned since being in this class is emotional Intelligence. A lot of people claim to have emotional intelligence but lack the confidence within themselves to properly express it and in this line of business find It crucial. With limited knowledge of self and emotional intelligence one can ender their success. With emotional intelligence a person can communicate effectively because without communication you can’t be an effective player in this game of life. The third thing I’ve learned was the Dry. Phil test. It was important because it was Like looking In the mirror and being critical of myself to put things In 1 OFF learned since being in this class is trust and how to effectively complete proposals. How to cite Things I’ve learned, Papers

How Can Advertising Campaigns Appeal To a Sense of Australianness

Question: How can advertising campaigns appeal to a sense of australianness? Answer: Introduction Australianness is a term that is used to display the Australian culture. Australian culture is very unique and is not at all similar to any other culture. This is because Australian culture is a unique blend of already established old traditions and fresh influences (Prideaux, 2009). The mass media and the advertisements of Australia gives a sense of belongingness to that community by rendering images that precisely belong to Australia. As a result no other nations who are not the part of the Australian community will able to understand it. The advertisers use the different symbols such as humor, masculinity and animals as a part of advertisements in order to remind the Australians about the daily happenings (Kavanagh, 2010). According to the advertisers this helps in giving a sense of patriotism to the viewers. This assignment will be dealing with the advertising factors that includes humor, masculinity and animals and are used by the advertising agencies of Australia for appealing to the sense of Australianness among people. In addition to this, the most important factor among the three factors that appeals the most to the Australians is also discussed. Examples will be cited from the television ads for better understanding of the topic. Thesis Statement 1) Humor One of the most important factors that advertisers use in their advertisement campaigns for appealing the Australians is the Australian unique sense of humor. The humorous images clearly identifies the humor used in the advertisement is simple or complex (Wagler, 2013). The humorous advertisements are so made that it is easily despicable by the Australians and not by other communities. The humor used in Australian advertisements are somewhat complex and unique so that the Australians have a feeling that they are related to the advertisements and no other outsider of the community will be able to relate that to their lives. For example- In the advertisement of Drop Bear for Bundaberg Rum, the Australians will easily depict the humor within the advertisement but the other tourists will fail to do so. According to liburyt and Klimavi ius (2012) the humor used inside the advertisements helps in linking the Australians to the advertisers by arousing the sense of Australianness. In addi tion to this, the traditional humor of Australia is strongly aligned with the national myths and that helps in attracting the Australian viewers towards the advertisements. On the other hand Lang (2010) had a view that Australian humor contains irony and is quick witted with an intension of mocking and making fun of the class system and thereby challenge the British supremacy. Moreover, the advertisements reveal a part of racism and exclusiveness. By using sarcastic comments, the advertisers always give a feeling to Australian consumers that they are inclusive of the joke where no other nation can understand it or take part of it. The Australian humor mainly believes that they are an exclusive nation to understand the humor and no other nation will understand it (Moran, 2010). Another example can be cited from the campaign of I Believe where the announcer jokingly said that he doesnt possess a kangaroo or doesnt wrestle with the crocodiles. The advertiser here makes a fun of the unawareness of the other nations by commenting that no one realized that the stereotypes are false except the Australians. So, by using sarcastic comments and exclusiveness, the advertisers gives a feeling to the Australian consumers that they are unique and are the part of the joke which is not understandable to the rest (Prideaux, 2009). According to Kavanagh (2010), the Australian advertisers are always trying to indulge unique flavor of Australianness through humor and jokes into the advertisements for attracting the people of Australia. This is because; humor can be termed as an important emotional appeal that is generally used in the field of advertisement. The more the advertisers use the humor that arouses Australianness within the advertisements, the Australian feel happy and have a feeling of superiority over the other nations of the world. So, for the companies who are willing to establish a strong foothold on the Australian market have to understand the importance of usage of humor in advertising and use it as a powerful strategy to attract the customers (Wagler, 2013). 2) Masculinity Another major factor that the advertisers use to show the tinge of Australianness in the advertisements is by showing masculinity. In Australia, it is a stereotype belief that males are the carriers of Australianness as compared to the women. For this reason, the men are likely the national identity and are shown in Australian televisions for the advertisements (Lang, 2010). While discussing this context, the idea of Ocker image is evolved. This image defines an ocker as an Australian who is a self satisfied barbarian, has beer, is ignorant and opposes anybody who is unlike him as well as love spending both money and time in pubs. This image gives an impression of masculinity and thereby celebrates the masculinity by drinking excess beer. According to Moran (2010) the Australians have a nostalgic relationship with the masculinity, drinking beer and Australian nationalism. Though it is said that the above mentioned trinity has faded to an extent still the beer advertisements have hold the nostalgia and the feel of traditional Australianness among the people. So, the advertisers of beer companies try to include more masculinity in the advertisements for promoting their advertisements among the Australians. It is said that more the masculinity will be involved in the advertisements, the more the Australian will tend to have that product in their daily life (Kavanagh, 2010). This ultimately gives a feeling of Australianness to the Australians for holding their tradition of drinking beer that helps the companies in gaining a huge customer database and profits. Moreover, this also helps the companies in achieving a positive promotional continuity for their products. Wagler (2013) commented on the fact that the Ockers have a traditional language that is only understandable by the Australians and nobody else. The beer advertising companies make a good use of this language in the advertisements to give a feeling to the viewers that they are the part of the advertisements and no other nations are its part. This gives the Australians a feeling of uniqueness among the world. Moreover, according to Walter J. Thomson, the CEO of one of the biggest advertising company, Burt Manning, commented that the Australians do not drink beer; they only drink the advertisement showing it. Apart from this, Lang (2010) had a view that the advertisements of Australia and masculinity are closely knitted to one another that are well apprehended by the Australian community and not a single one exterior to that community. In addition to this, the masculinity of the Australians is also depicted by showing advertisements where they fight with the dangerous animals. This also gives an essence of masculinity that makes the Australians feel Australianness in the advertisements. 3) Animals The advertisers use another essential factor in the advertisements that appeal the sense of Australianness among the people is the usage of animals. The animals that are showcased in the advertisements are the kangaroos, crocodiles and koalas that are the national animals of Australia. Showing these animals in the advertisements gives a feeling of belongingness and nationalism to the Australians (liburyt and Klimavi ius, 2012). The advertisers take an advantage of this feeling and thereby include animals in the advertisements to give a solid impression of Australianness among the people. An example can be cited from a film named Crocodile Dundee where it shows a good connection between animals and Australianness. Moran (2010) commented on this fact that the image shown in that film where a man wrestles hard with a crocodile became a symbol of Australian males. In addition to this, Steve Irwin who became world famous for finding and dealing the deadliest and the most dangerous animals in Australia also gave a feeling of courage to Australians in dealing with the dangerous animals. The advertisers use this association of Australians with animals in the most effective and tricky way for advertising their products (Wagler, 2013). Apart from this, the advertisers also use animals in order to reveal and trace on masculinity of Australians. Another example can be cited from advertisement of Bundaberg Rum where a bear is portrayed and is seen by the other Australians as one of them. This connects the masculinity of the Australians with the dangerous animals. The animals are thereby used in order to make the Australians remember the product which by consumption or usage give them a feeling of nationalism and Australianness (liburyt and Klimavi ius, 2012). The advertisers thereby these tactics in the most innovational way that help them in contin uing their promotional activities. According to Moran (2010) the advertisements of the companies in order to attract the customers appeal to the sense of Australianness by giving a sense of familiarity. This is because; the Australians will be feeling nostalgic to see the animals that they saw during their childhood in the movies are still used today for the advertisement campaigns. This will give a tendency to the Australians to lean towards that products rather than choosing any other external brands. So, the companies try to use more and more animals in their advertisements to attract the Australians for having their products which ultimately helps the companies in increasing their profits and customers (Kavanagh, 2010). Conclusion Throughout the assignment it is seen that 3 essential factors that are used within the advertisements and appeal the Australianness among the people of Australia are the sense of humor, masculinity and usage of animals. These 3 factors constantly remind the Australians their uniqueness and the sense of nationalism. This is because; these factors are the traditions of Australia that helps them to get differentiated from rest of the world. The advertisers put traces on these 3 factors in order to capture the market and extend their business. However, humor is considered as the best of the 3 factors since the humor and joke that is used within the advertisements is only understandable by the Australians and not by other communities. This results in giving a feeling of snobbery and dominance over other nations. But, if it deeply elaborated and discussed, it is seen that these above mentioned 3 factors have a huge contribution in appealing the Australianness among the people. For a compan y to make the campaigning more appealing and unique, the advertisers have to combine all the three factors that include masculinity, animals and humor in their campaigns to get a better result. Reference List Journals Lang, A. (2010) Troping the masculine: Australian animals, the nation, and the popular imagination, Antipodes, 24(1), pp. 5-10 Prideaux, J. (2009) Consuming icons: Nationalism and advertising in Australia, Nations and Nationalism, 15 (4), pp. 616-635 Moran, C. (2010) Regional Identity and Humor, Rural Society, 20, pp. 101-114 Kavanagh, N. (2010) What better advertisement could Australia have? Encyclopedias and nation-building,National Identities, 12(3), pp.237-252 liburyt, L. and Klimavi ius, M. (2012) Humor appeal in advertising: how to use it effectively, ecoman, 17(3), pp. 24-36 Wagler, A. (2013) Embracing Change: Exploring How Creative Professionals Use Interactive Media in Advertising Campaigns,Journal of Interactive Advertising, 13(2), pp.118-127

The Mysterious Flame of Queen Loana Review Essay Example

The Mysterious Flame of Queen Loana Review Paper Essay on The Mysterious Flame of Queen Loana Postmodernism clean water. So pure that even bacteria do not have))) To take though required direction roll with other authors there are not only woven into the fabric of the text, they are here the text itself! This is justified by the plot the hero reads a book of his childhood and gradually starts to recover lost memories As for nadsyuzhetnyh associations with authors, here I will mention only those who are particularly struck me: Fowles ( mantissa the beginning of a very similar the same awakening in the hospital, the same memory loss, only Fowles this topic did not disclose), Proust (apparently by the flow of thoughts, while some little thing awakens mysterious flame memories ) and Kundera (strange hero :)) We will write a custom essay sample on The Mysterious Flame of Queen Loana Review specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Mysterious Flame of Queen Loana Review specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Mysterious Flame of Queen Loana Review specifically for you FOR ONLY $16.38 $13.9/page Hire Writer it is a pity that it was not Eko ohozhe. Of course, the rejection of their own style, too, is in the spirit of postmodernism, but I wished that from eco have only the richness of vocabulary so book subjects ( Name of the Rose remembered) In general, post-modernism in the Mysterious Flame of Queen Loana blooms so that drowns out all the charm and subtlety of the novel. The plot is like there, but it has no content. The composition is built, but not completed. Style rovnehonko so that does not catch the eye and reveal the authors traits. What we have as a result? So that whether the novel was signed in the name of not Umberato Eco, he would have become the object of a caustic criticism: the idea is not worked out, talent, strength is not enough, the plot is stilted, the heroes of cardboard, and the author zauchka, zaznayka and upstart trying to swim to the other peoples quotes. but the time is Umberto Eco, then we say, the Apotheosis of postmodernism I can well believe that the views of other readers can be very different, but personally I would have made this novel a little more alive and natural, would both storylines (and childhood and adulthood), would reduce the attic part and asked for b s author to deliver elegant, but a clear point at the end, which in the novel is not there. Yes, it would be a completely different affair, and postmodern sequined he would not have shone. Instead, he would become one of my favorites! 🙂

Encana Report Essay

Encana Report Essay Encana Report Essay Objective To find the Weighted Average Cost of Capital for the energy firm EnCana. Finding the firms market value capital structure Value of debt: Short Term Debt: We assume that Encana’s short-term debt is NOT a part of its permanent capital structure because Encana’s business activities are project based (mining, oil and gas) and hence assumedly require different frequencies and magnitudes of short-term debt that vary with each project. Long-term Debt: We do not have the resources to calculate the market value of debt (as we don’t know how many of which bonds there are), therefore we will use the book value which is $6,629m. Value of equity: Barb asks if we can use book value of equity. Considering book value of equity is rarely close to its market value(intuition – book value is just assets less liabilities, whereas market value is value of all expected future cash flows), this is not a viable option. EnCana has 854.9 mil shares outstanding, trading at $56.75. Therefore market value of equity = 854.9 x 56.75 = 48,515.575 (Means 3:1 market to book ratio – can see clearly why you cannot use the book value of equity) Therefore: Debt = 12%, Equity = 88% of capital structure (Apx.1). Find cost for individual capital structure components Historical interest rates are irrelevant in calculating cost of capital, what matters is current yield which reflects the return currently required by investors. Cost of debt Publicly Traded Debt: Yield is 5.81%. We use this yield assuming that since long-term interest rates are the average of short-term rates - amidst 30 years 1-2 years difference should not particularly skew the average, therefore all four long-term bonds should be trading at a similar yield. Other long-term debt: Yield (assuming EnCana qualifies for the prime rate) is 5.25% Therefore weighted average cost of debt is 5.81 x 0.81 + 5.25 x 0.19 = 5.7% (Apx.2) Cost of common equity CAPM approach (SML equation): We know: rf = long term bond yield = 4.20%, ÃŽ ² =1.27 (assuming historical beta is good representation of current beta – problem – only based on 3 years of data) We do not know the risk premium on the market Historical risk premium: Find the average historical risk premium by subtracting average historical risk free rate from average historical return on market: Arithmetic average: 13.9 – 6.5 = 7.4%, Geometric average: 12.9 -5.6 = 7.3% Problems: Bond average is only 1 year bonds rather than long term rates Increase in risk premium can actually contribute to decline in stock market returns Forward looking risk premium Use discount cash flow model to estimate rpM: (Apx.3). We find the growth rate with (assuming historical growth rates are accurate representation of the future): 25yr growth rate = 5.54 %( Apx. 4) Problems: No reason to believe future growth will be like past growth Growth rates sensitive to period over which growth is measured (Apx.5) We use the 25 year growth rate (due to long-term nature) to obtain a rpM of 3.3 %( Apx.6), which seems unusually low considering risk premium generally is within 3.5-6.5%. Which risk premium to use? If we consider that the historical risk premium tends to overstate the risk premium (we are less risk adverse due to various other forms of financial stability), and the five year growth rate of the market (i.e. the current trend) is much higher (if assumed to continue would result in a much higher risk premium, approx. 8%), it is reasonable to take the average of the two: (7.4% +3.3%)/2 = 5.35%. This value for rpM seems more reasonably within the typical range. Using this rpM we calculate the cost of equity: re = 4.2 + 1.27(5.35) = 11% Constant growth dividend discount model , r = + 0.1187 =12.42% Problems: Not a lot of historical data to work off Which model do we use? Considering the extra step of calculating the risk premium in

Discussion topic Assignment Example | Topics and Well Written Essays - 250 words - 11

Discussion topic - Assignment Example On the other hand, quantitative research method has a major merit in that it can be administered and evaluated very quickly and the responses tabulated very quickly. In addition, the numerical data obtained in this method facilitates quick comparisons between groups as well as the extent of congruence between respondents. This advantage is majorly used in nursing research when a comparison is needed after a new nursing intervention is initiated for example nursing rounding (Carr, 2014). Quantitative and qualitative research study methods have some of their limitation in nursing research. A study done by Carson (2011) on the strengths and weakness of research designs involving quantitative measures, found out that experimental research has several methodological limitations. These limitations were seen to jeopardize the internal and external validity of the research results thus limiting their applicability for practice. Some of the threats noted were sampling and recruitment. Sampling technique may have a problem in randomised control trials when the potential participants are not prepared to opt for treatment in randomised basis. Similarly, recruiting subjects to participate in clinical trials may be difficult. On the other hand, qualitative research has been noted to be time consuming and important issues may be overlooked during the study. in essence both methods are appropriate to conduct a research, and can contribute greatly to the scientific body of knowledg e (Carr,

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THE ACTIONS OF DRUGS ON THE GUINEA-PIG ISOLATED ILEUM - Lab Report Example Q2 (ii): When testing the agonist action of the morphine-like drugs, it is observable that, through the depressant action of the morphine-like drugs, it was difficult to assess the potencies because the tachyphylaxis developed rapidly. In this case, it is important to use small doses of the drug while exposing the gut to the drugs at the intervals that do not go below 30 minutes. The inhibitory effect of morphine on the twitch of longitudinal muscle was induced by the coaxial stimulation, hence leading to the dose-response curve of order ââ€" . Upon sing nalorphine-like drugs, the depressant action of the N-allyl analogue of the morphine was having the similar order to that of morphine. However, tachyphylaxis development was much more rapid with nalorphine than with morphine. When testing the antagonist action of the morphine-like drugs, tachyphylaxis was able to develop with all compounds tested, which was a strong indication on the possibility of exhibiting antagonist action under suitable conditions. In this experiment, techyphylaxix was able to develop more rapidly than compared to using the agonist. Basing on the agonist activity of the antagonists, the conventional method used for testing antagonism did not yield the decisive results. The antagonism through low concentrations of morphine of the inhibitory effect of morphine upon twitch of the longitudinal muscle was able to induce coaxial stimulation. Q3: Through using the experimental protocol or two log curves, there is a possibility of an error occurring. To avoid such errors, the formula can be modified into that of the critical ratio approach (CR). The CR is the concentration of agonist at the presence of the antagonist required for producing a fixed response to the linear part of the concentration. It is thus advisable to use the equation that relates CR to KB, which is expressed

How do you think magic makes itself felt in contemporary life Essay

How do you think magic makes itself felt in contemporary life - Essay Example But how can we truly say that a certain situation or feeling is truly magic Like in the movies, one seems to be cast on a spell as we hold our breaths and take in every scene and make it our own. We can see the story unfold before our eyes as how the director sees it in his mind. We are transported into another world, another dimension with each character that somehow looks surreal. We find traces of personality that is distinct and personal, as if our own. And with these movies we can escape even for a few hours, a few minutes the commonplace tragedies that beset our everyday lives. It is also the question of a supernatural being that has created characters such as vampires. These creatures have long been associated as evil and ungodly from the creative minds of writers. Man's fascination with the unknown has spawned various characters, but in today's fiction these characters are given a more human touch than the stories written centuries ago. Creatures long depicted as human predators are given a human side and can experience the same pains and anguish as that of a common man. The idea of vampires living amongst us is another magical transformation.

Analysis Of Hedge Fund Performances

Analysis Of Hedge Fund Performances 1. INTRODUTION: Hedge funds are actively managed portfolios that hold positions in publicly traded securities. Gaurav S. Amin and Harry M. Kat (2000) stated on their report that A hedge fund is typically defined as a pooled investment vehicle that is privately organized, administrated by professional investment managers, and not widely available to the public? It charges both a performance fee and a management fee. It allows a flexible investment for a small number of large investors (usually the minimum investment is $1 million) can use high risk techniques. Nowadays it is very clear that in the matter of alternative investment mutual fund is not performing well. As a high absolute returns and typically have features such as hurdle rates and incentive fees with high watermark provision hedge fund gives a better align to the interests of managers and investors. Moreover mutual funds typically use a long-only buy-and-hold type strategy on standard asset classes, which help to capture risk premia asso ciate with equity risk, interest rate risk, default risk etc. However, they are not very helpful in capturing risk premia associate with dynamic trading strategies. That is why hedge fund comes into the picture. This is the year of 2009, which takes the greatest history of the world in the following century. In the year of 2008 the world saw the greatest fall down of the world economy. Lots of people missing their jobs, lots of company were stopped. The world economy faced the highest losses in the history. These all factors are showing only one way to makeover from that greatest downfall that is hedging. 3The last couple of decades have witnessed a rapidly growing in the hedge funds. Relative to traditional investment portfolios hedge funds exhibit some unique characteristics; they are flexible with respect to the types of securities they hold and the type of the position they take. 1 Agarwal, V. and Naik, N. (2000). Multi-period performance persistence analysis of hedge fund s?. The journal of financial and quantitative analysis. Vol. 35, No,3. PP-327. 2 Agarwal, V. and Naik, N. (2004). Risks and portfolio decisions involving hedge funds?. The review of financial studies, Vol. 17, No.1. PP-64. 3 Journal of banking and finance 32(2008) 741-753- Hedge Fund Pricing and Model Uncertainty? by Spyridan D. Vrontos, Ioannis D. Vrontos, Daniel Giomouridies. 4The number of FOHFs increase by 40% between 2001 and 2003, and now comprised almost two third of the $650 billion invested in the USAs hedge fund market. Due to its nature it is difficult to estimate the current size of hedge fund industry. 5Van Hedge Fund Advisors estimates that by the end of 1998 there were 5380 hedge fund managing $311 in capital, with between $800 billion and $1 trillion in total assets, which indicates the higher number of recent new entries. So far, hedge fund is based on American phenomena. About 90% hedge fund managers are based in the US, 9% in Europe and 1% in Asia and elsewhere. Now a days around 5883 hedge funds are trading around the world. (*Barclay Hedge database) 4 Financial times, 29th October, 2003. www.vanhedge.com http://www.barclayhedge.com/products/hedge-fund-directory.html 1.1 Categories of Hedge fund investment objectives: Event Driven: Distressed securities- manager focuses on securities of companies in reorganization and bankruptcy, ranging from senior secured debt to the common stock of the company. Risk arbitrage- manager simultaneously buys stock in a company being acquired and sells stock in its acquirers. Global: International- manager pays attention to economic change around the world (except the United States) but more bottom-up oriented in that managers tend to be stock-pickers in markets they like. Uses index derivatives to a much lesser extent than macro managers. Emerging- Manager invests in less mature financial markets of the world, e.g. Hong Kong, Singapore, Pakistan, India. Because shorting is not permitted in many emerging markets, managers must go to cash or other markets when valuations make being long unattractive. Regional- Manager focuses on specific regions of the world, example- Latin America, Asia, and Europe. Global macro: Opportunistic trading manager that profits from changes in global economies typically based in major interest rate shifts. Uses leverage and derivatives. Market neutral: Long/short stocks- half long/half short. Manager attempts to lock-out or neutralize market risk. Convertible arbitrage- Manager goes long convertible securities and shorts the underlying equities. Stock index arbitrage- Manager buys a basket of stocks and sells short stock index futures, or the reverse. Fixed income arbitrage- Manager buys T-bonds and sells short index futures or the reverse. Short sales: Manager takes a position that stock prices will go down. Used as a hedge for long only portfolios and by those who feel market is approaching a bearish trend. U.S Opportunistic: Value â€Å" Manager focuses on assets, cash flow, book value, out-of-favor stocks. Growth â€Å" Manager invests in growth stocks, revenues, earnings, and growth potential are keys. Short term â€Å" Manager holds positions for a short time frame. Fund of fund: Capital is allocated among a number of hedge funds, providing investors with access to managers they might not be able to discover or evaluate in their own. Usually has a lower minimum than a hedge fund. Source: Carl Ackermann, Richard McEnally, and David Ravenscraft, The performance of hedge funds: Risk, Return and Incentives,? Journal of finance 54, no.3 (June 1999) figure 1, page-843. Reproduced from a hedge fund database firm named Managed Account Report (MAR) Inc, and distributed through LaPorte Asset Allocation System. 2. Literature review: Despite the increasing interest and recent development, few studies have been carried out on hedge funds comparing to other investment tools like mutual funds. An analysis of Hedge Fund performance 1984-2000? by Capocci Daniel using one of the greatest hedge fund database ever used on his working paper (2796 individual funds including 801 dissolved), to investigate hedge funds performance using various asset-pricing models, including an extension from of Carharts (1997) model combined with Fama and French (1998), Agarwal and Naik (2000) models that take into account the fact that some hedge funds invest in emerging market bond. At the end they found that their model does a better job describing hedge funds behaviour. That appears particularly good for the Event Driven, Global Macro, US Opportunistic, Equity non-Hedge and Sector funds. Since the early 1990s, when around 2000 hedge funds were managing assets totalling capital of $60 billion, the subsequent growth in the number and asset base of hedge funds has never really been refuted. The industry only suffered from a relative slowdown in 1998, but since then has enjoyed a renewed vitality with an estimated total of 10,000funds managing more than a trillion US dollars by the end of 2006. The growing trend of the sector remained remarkably sustained during the stock market collapse that started in March 2000, when the NASDAQ composite Index reached an all-time high of 5,132 and finished three years later with a floor level of 1,253. In the meantime, the global met asset value (NAV) of hedge funds continued to grow at a steady rate of 10.6% (Van Hedge Funds Advisors International, 2002), contrasting with a decrease of 2.7% in the worldwide mutual fund industry ( Investment Company Institute, 2003). In 2001, Capocci and Hubner(2004) estimated that there were 6,000 he dge fund managing around $400 billion. In 2007, Capocci, Duquenne and Hubner (2007) estimated that there were 10,000 hedge funds managing around $1 trillion. This is a growth of 11% in the number of funds and 26% in assets over six years (6PhD thesis paper by Daniel P.J. Capocci). Other studies from practitioners Hennessee (1994), and Oberuc (1994) also showed an evidence of superior performance in the case of hedge funds. Ackernann and Al. (1999) and Liang (1999) who compared the performance of hedge funds to mutual funds and several indices, found that hedge funds constantly obtained better performance than mutual funds. Their performance was not better than the performance of the market indices considered. They also indicated that the returns in hedge funds were more unstable than both the returns of mutual funds and those of market indices. According to Brown and Al. (1997) hedge funds showing good performance in the first part of the year reduce the volatility of their portfolio in the second half of the year (Capocci Daniel- An analysis of hedge fund performance 1984-2000). Taking all these results into account hedge funds seems a good investment tool. 6 PhD thesis paper by Daniel P.J. Capocci. Electronic copy available at: http//ssrn.com/abstract=1008319. 3. Research design and Methodology: In this section I would like to describe the empirical methodology to be used to measure the performance of hedge fund as well as the performance of FTSE 100 and SP 500. My aim is to identify which will give the better return for an investor. To investigate hedge funds performance and performance of FTSE 100 and SP 500 my study will follow some models like 4-factor model from of Carharts (1997) model, the 3-factor model from Fama and French (1993) models, the Sharpe ratio (1966) and Jensens alpha (1968) and CAPM. I divide my research into three sections. First section will analyse the performance of hedge funds, FTSE 100 and SP 500. This section sets out the models of performance measurement I will use. Second section will made correlation between Hedge fund vs. FTSE 100 and Hedge fund vs. SP 500 to find out the better portfolio. Third section will exposes a discussion as well as a description of my database and finally concludes the paper. 3.1. Performance measure models: The 4-factor model from Carhart (1997) Carharts (1997) 4-factor model is an extension of the Fama and French (1993) factor model. It not only takes into account the size of the firms, the book to market ratio, but there is an additional factor for the momentum effect. Grinblatt, Titman and Wermers (1995) define this effect as buying stocks that were past winners and selling past losers. This model is estimated with the following regressions: Rpt-Rft=ÃŽÂ ±p+ÃŽÂ ²pi (Rmt â€Å"Rft) + ÃŽÂ ²p2 SMBt +ÃŽÂ ²p3 HMLt + ÃŽÂ ²p4 PR1YRt + ept t= 1,2,,T Where SMBt= the factor mimicking portfolios for size; HMLt= the factor mimicking portfolio for book to market equity; PR1YRt= the factor mimicking portfolio for the momentum effect7 7 for a description of the construction of PR1YR see Carhart (1997). As stressed by Daniel et al. (1997), this model, which is effectively a four factor Jensen measure, assumes that betas with respect to the returns of four zero investment factor mimicking portfolios, are appropriate measures of multidimensional systematic risk. According to this model, in the absence of stock selection or timing abilities, the expected return for a fund is the sum of the risk free return and the products of the betas with the factor risk premium, which are simply the expected returns of each of these zero investment portfolios. The Carhart (1997) approach identifies a matching passive portfolio return for each fund return. This passive return, which is subtracted from the fund return to generate ÃŽÂ ±p, is a weighted average of the returns of the Carhart factor portfolios and the return of a one month T-bill (Capocci Daniel 2001, Journal- European Private Bankers, Nov, 2001). The 3-factor model from Fama and French (1993): Fama and French (1993) 3 factor model is estimated from an expected form of the CAPM regression. It takes the size and the book to market ratio of the firm into account. It uses the time series approach from Black, Jensen, and Scholles (1972) in the sense that the monthly returns on stocks are regressed on the returns to a market portfolio of stocks and mimicking portfolios for size and book to market. It is estimated from the following extension of the CAPM regression: Rpt-Rft=ÃŽÂ ±p+ÃŽÂ ²pi (Rmt â€Å"Rft) + ÃŽÂ ²p2 SMBt +ÃŽÂ ²p3 HMLt + ept t= 1,2,,T Where, SMBt= the factor mimicking portfolios for size, and HMLt= the factor mimicking portfolio for book to market equity. SMLt which comes from small minus big meant to mimic the risk factor in returns related to size, and HMLt which comes from high minus low meant to mimic the risk factor in returns related to book to market equity8. HML (respectively SMB) is neutral relative to the size effect (respectively to the book to market). This means that these factors do a good job isolating the firm-specific components of returns (Fama and French 1993, 1995, 1996 and 2000). 8 See Fama and French (1993) for a precise description of the construction of SMBt and HMLt. The Sharp Ratio (1966): The Sharp ratios (1966) calculate the ratio of the average excess return and the return standard deviation of the fund that is being evaluated. As such it measures the excess return per unit of risk. Assuming all asset returns to be normally distributed, the CAPM tells us that in equilibrium the highest attainable Sharpe ratio is that of the market index. In more general terms, the market indexs sharp ratio represents the set of return distributions that is obtained when statically combining the market index with cash. With the market index being highly diversified, these distributions offer the highest achievable expected return for every possible standard deviation (Gaurav S. Amin and Harry M.Kat (2002), Hedge fund performance 1990-2000). Jensens Alpha (1968): Jensens alpha was introduced in Jensen (1968) and equals the intercept of the regression: (Rh-Rf)= ÃŽÂ ± + ÃŽÂ ² (Ri- Rf) + eh, Where Rh is the fund return, Rf is the risk free rate and Ri is the total return on the market index. Like the Sharpe ratio, Jensens alpha is rooted in the CAPM. According to the CAPM, in equilibrium all (portfolios of) assets with the same beta will offer the same expected return, any positive deviation therefore indicates superior performance (Gaurav S. Amin and Harry M.Kat (2002), Hedge fund performance 1990-2000). Capital Asset Pricing Model: The first performance model that will be used is a capital asset pricing based single index model (CAPM). This model developed by Sharpe (1964) and Linter (1965) is the oldest performance evaluation model. Its formula is the following: Rpt â€Å" Rft = ÃŽÂ ±p + ÃŽÂ ²p (Rmt-Rft) + ept t= 1,2,, T Where, Rpt= return of fund p in month t, Rft= risk free return on month t, Rmt= return of the market portfolio on month t, ept= the error term, ÃŽÂ ±p and ÃŽÂ ²p= the intercept and the slope of the regression estimated. The intercept of this equation, ÃŽÂ ±p commonly called Jensens alpha (1968) is usually interpreted as a measure of out or under performance relative to the market proxy used. There are several extension of this model have been developed like- the Breeden (1979) intertemporal CAPM or the Ferson and Schadt (1996) CAPM that allows time variation in the expected returns and the risk (Capocci Daniel 2001, An analysis of hedge fund performance 1984- 2000). 4. Data Preparation: For data preparation my first step will be to collect the monthly data of the hedge fund index, FTSE 100 and SP 500. For my data collection I will use some sources like- Credit Suisse/ Tremont Hedge Fund Index (CSTHFI hereafter) which is an appropriate representative of the entire hedge fund industry, there are three biggest database of hedge fund in the world these are Managed Account Reports (MAR), Hedge Fund Research, Inc (HFR) and TASS Management (TASS). These databases were the most used in academic and commercial hedge fund studies. For the FTSE 100 and SP 500 I will use yahoo finance. 4.1. Bias in Hedge fund data: According to Ackermann et al. (1999) and to Fung and Hsieh (2000), two upward biases exist in the case of hedge funds. They do not exist in the case of mutual funds, and they both have an opposite impact to the survivorship bias. Survivorship bias is an important issue in mutual funds performance studies (see Carhart and al. 2000). This bias is present when a database contains only funds that have data for the whole period studies. In this case, there is a risk of overestimating the mean performance because the funds that would have ceased to exist because of their bad performance would not be taken into account. The two upward biases exist because, since hedge funds are not allowed to advertise, they consider inclusion in a database primarily as a marketing tool. The first phenomenon stressed by Ackermann and al. (1999) and called the self-selection bias is present because funds that realize good performance have less incentive to report their performance to data providers in order to attract new investors. The second point called instant history bias or backfilled bias (Fung and Hsieh 2000) occurs because after inclusion a funds performance history is backfilled. This may cause an upward bias because funds with less satisfactory performance history are less likely to apply for inclusion than funds with good performance history (Capocci Daniel 2001, An analysis of hedge fund performance 1984- 2000). To avoid these biases I will try to take all funds both living and dissolved into account. Once I have collected all the data that I need I will use SPSS to test the correlation between my two benchmarks FTSE 100 and SP 500. 5. Contingency Plan: To make my research effective I made a well constructed plan. I have drafted a project plan (Appendix A) with scheduled dates for when I intend to complete sections for submission. After completing my final exam I will jump in to this field. Advises from previous students who completed their dissertation, I made my project plan flexible to keep some things in mind like supervisors holiday and any unforeseen events such as my illness. I will try to keep a good communication with my supervisor for checking that I am in right track. I plan to make some formal meetings with my supervisor to discuss my progress and I will try to inform him about the state of my work. It is hard to spending too much time over one task and going off track, I hope I will manage this if there is no rush at the very last minute. Another worry is the collecting and analysing the data, that is why I plan to collect the data early June once I have finished my research design. If I face any kind of difficulties I will inform him and make a cut-off point where I should stop searching the board data and start my own primary data. As I do all SPSS classes and briefly touched about this, I think it will be easy to analyze the data but I need to increase a bit of use of control on it by practicing more. So I will set aside time for collecting data and practice more SPSS for regression analysis. I hope if all these go well, I will make my dissertation very effectively. Analysis Of Hedge Fund Performances Analysis Of Hedge Fund Performances 1. INTRODUTION: Hedge funds are actively managed portfolios that hold positions in publicly traded securities. Gaurav S. Amin and Harry M. Kat (2000) stated on their report that A hedge fund is typically defined as a pooled investment vehicle that is privately organized, administrated by professional investment managers, and not widely available to the public? It charges both a performance fee and a management fee. It allows a flexible investment for a small number of large investors (usually the minimum investment is $1 million) can use high risk techniques. Nowadays it is very clear that in the matter of alternative investment mutual fund is not performing well. As a high absolute returns and typically have features such as hurdle rates and incentive fees with high watermark provision hedge fund gives a better align to the interests of managers and investors. Moreover mutual funds typically use a long-only buy-and-hold type strategy on standard asset classes, which help to capture risk premia asso ciate with equity risk, interest rate risk, default risk etc. However, they are not very helpful in capturing risk premia associate with dynamic trading strategies. That is why hedge fund comes into the picture. This is the year of 2009, which takes the greatest history of the world in the following century. In the year of 2008 the world saw the greatest fall down of the world economy. Lots of people missing their jobs, lots of company were stopped. The world economy faced the highest losses in the history. These all factors are showing only one way to makeover from that greatest downfall that is hedging. 3The last couple of decades have witnessed a rapidly growing in the hedge funds. Relative to traditional investment portfolios hedge funds exhibit some unique characteristics; they are flexible with respect to the types of securities they hold and the type of the position they take. 1 Agarwal, V. and Naik, N. (2000). Multi-period performance persistence analysis of hedge fund s?. The journal of financial and quantitative analysis. Vol. 35, No,3. PP-327. 2 Agarwal, V. and Naik, N. (2004). Risks and portfolio decisions involving hedge funds?. The review of financial studies, Vol. 17, No.1. PP-64. 3 Journal of banking and finance 32(2008) 741-753- Hedge Fund Pricing and Model Uncertainty? by Spyridan D. Vrontos, Ioannis D. Vrontos, Daniel Giomouridies. 4The number of FOHFs increase by 40% between 2001 and 2003, and now comprised almost two third of the $650 billion invested in the USAs hedge fund market. Due to its nature it is difficult to estimate the current size of hedge fund industry. 5Van Hedge Fund Advisors estimates that by the end of 1998 there were 5380 hedge fund managing $311 in capital, with between $800 billion and $1 trillion in total assets, which indicates the higher number of recent new entries. So far, hedge fund is based on American phenomena. About 90% hedge fund managers are based in the US, 9% in Europe and 1% in Asia and elsewhere. Now a days around 5883 hedge funds are trading around the world. (*Barclay Hedge database) 4 Financial times, 29th October, 2003. www.vanhedge.com http://www.barclayhedge.com/products/hedge-fund-directory.html 1.1 Categories of Hedge fund investment objectives: Event Driven: Distressed securities- manager focuses on securities of companies in reorganization and bankruptcy, ranging from senior secured debt to the common stock of the company. Risk arbitrage- manager simultaneously buys stock in a company being acquired and sells stock in its acquirers. Global: International- manager pays attention to economic change around the world (except the United States) but more bottom-up oriented in that managers tend to be stock-pickers in markets they like. Uses index derivatives to a much lesser extent than macro managers. Emerging- Manager invests in less mature financial markets of the world, e.g. Hong Kong, Singapore, Pakistan, India. Because shorting is not permitted in many emerging markets, managers must go to cash or other markets when valuations make being long unattractive. Regional- Manager focuses on specific regions of the world, example- Latin America, Asia, and Europe. Global macro: Opportunistic trading manager that profits from changes in global economies typically based in major interest rate shifts. Uses leverage and derivatives. Market neutral: Long/short stocks- half long/half short. Manager attempts to lock-out or neutralize market risk. Convertible arbitrage- Manager goes long convertible securities and shorts the underlying equities. Stock index arbitrage- Manager buys a basket of stocks and sells short stock index futures, or the reverse. Fixed income arbitrage- Manager buys T-bonds and sells short index futures or the reverse. Short sales: Manager takes a position that stock prices will go down. Used as a hedge for long only portfolios and by those who feel market is approaching a bearish trend. U.S Opportunistic: Value â€Å" Manager focuses on assets, cash flow, book value, out-of-favor stocks. Growth â€Å" Manager invests in growth stocks, revenues, earnings, and growth potential are keys. Short term â€Å" Manager holds positions for a short time frame. Fund of fund: Capital is allocated among a number of hedge funds, providing investors with access to managers they might not be able to discover or evaluate in their own. Usually has a lower minimum than a hedge fund. Source: Carl Ackermann, Richard McEnally, and David Ravenscraft, The performance of hedge funds: Risk, Return and Incentives,? Journal of finance 54, no.3 (June 1999) figure 1, page-843. Reproduced from a hedge fund database firm named Managed Account Report (MAR) Inc, and distributed through LaPorte Asset Allocation System. 2. Literature review: Despite the increasing interest and recent development, few studies have been carried out on hedge funds comparing to other investment tools like mutual funds. An analysis of Hedge Fund performance 1984-2000? by Capocci Daniel using one of the greatest hedge fund database ever used on his working paper (2796 individual funds including 801 dissolved), to investigate hedge funds performance using various asset-pricing models, including an extension from of Carharts (1997) model combined with Fama and French (1998), Agarwal and Naik (2000) models that take into account the fact that some hedge funds invest in emerging market bond. At the end they found that their model does a better job describing hedge funds behaviour. That appears particularly good for the Event Driven, Global Macro, US Opportunistic, Equity non-Hedge and Sector funds. Since the early 1990s, when around 2000 hedge funds were managing assets totalling capital of $60 billion, the subsequent growth in the number and asset base of hedge funds has never really been refuted. The industry only suffered from a relative slowdown in 1998, but since then has enjoyed a renewed vitality with an estimated total of 10,000funds managing more than a trillion US dollars by the end of 2006. The growing trend of the sector remained remarkably sustained during the stock market collapse that started in March 2000, when the NASDAQ composite Index reached an all-time high of 5,132 and finished three years later with a floor level of 1,253. In the meantime, the global met asset value (NAV) of hedge funds continued to grow at a steady rate of 10.6% (Van Hedge Funds Advisors International, 2002), contrasting with a decrease of 2.7% in the worldwide mutual fund industry ( Investment Company Institute, 2003). In 2001, Capocci and Hubner(2004) estimated that there were 6,000 he dge fund managing around $400 billion. In 2007, Capocci, Duquenne and Hubner (2007) estimated that there were 10,000 hedge funds managing around $1 trillion. This is a growth of 11% in the number of funds and 26% in assets over six years (6PhD thesis paper by Daniel P.J. Capocci). Other studies from practitioners Hennessee (1994), and Oberuc (1994) also showed an evidence of superior performance in the case of hedge funds. Ackernann and Al. (1999) and Liang (1999) who compared the performance of hedge funds to mutual funds and several indices, found that hedge funds constantly obtained better performance than mutual funds. Their performance was not better than the performance of the market indices considered. They also indicated that the returns in hedge funds were more unstable than both the returns of mutual funds and those of market indices. According to Brown and Al. (1997) hedge funds showing good performance in the first part of the year reduce the volatility of their portfolio in the second half of the year (Capocci Daniel- An analysis of hedge fund performance 1984-2000). Taking all these results into account hedge funds seems a good investment tool. 6 PhD thesis paper by Daniel P.J. Capocci. Electronic copy available at: http//ssrn.com/abstract=1008319. 3. Research design and Methodology: In this section I would like to describe the empirical methodology to be used to measure the performance of hedge fund as well as the performance of FTSE 100 and SP 500. My aim is to identify which will give the better return for an investor. To investigate hedge funds performance and performance of FTSE 100 and SP 500 my study will follow some models like 4-factor model from of Carharts (1997) model, the 3-factor model from Fama and French (1993) models, the Sharpe ratio (1966) and Jensens alpha (1968) and CAPM. I divide my research into three sections. First section will analyse the performance of hedge funds, FTSE 100 and SP 500. This section sets out the models of performance measurement I will use. Second section will made correlation between Hedge fund vs. FTSE 100 and Hedge fund vs. SP 500 to find out the better portfolio. Third section will exposes a discussion as well as a description of my database and finally concludes the paper. 3.1. Performance measure models: The 4-factor model from Carhart (1997) Carharts (1997) 4-factor model is an extension of the Fama and French (1993) factor model. It not only takes into account the size of the firms, the book to market ratio, but there is an additional factor for the momentum effect. Grinblatt, Titman and Wermers (1995) define this effect as buying stocks that were past winners and selling past losers. This model is estimated with the following regressions: Rpt-Rft=ÃŽÂ ±p+ÃŽÂ ²pi (Rmt â€Å"Rft) + ÃŽÂ ²p2 SMBt +ÃŽÂ ²p3 HMLt + ÃŽÂ ²p4 PR1YRt + ept t= 1,2,,T Where SMBt= the factor mimicking portfolios for size; HMLt= the factor mimicking portfolio for book to market equity; PR1YRt= the factor mimicking portfolio for the momentum effect7 7 for a description of the construction of PR1YR see Carhart (1997). As stressed by Daniel et al. (1997), this model, which is effectively a four factor Jensen measure, assumes that betas with respect to the returns of four zero investment factor mimicking portfolios, are appropriate measures of multidimensional systematic risk. According to this model, in the absence of stock selection or timing abilities, the expected return for a fund is the sum of the risk free return and the products of the betas with the factor risk premium, which are simply the expected returns of each of these zero investment portfolios. The Carhart (1997) approach identifies a matching passive portfolio return for each fund return. This passive return, which is subtracted from the fund return to generate ÃŽÂ ±p, is a weighted average of the returns of the Carhart factor portfolios and the return of a one month T-bill (Capocci Daniel 2001, Journal- European Private Bankers, Nov, 2001). The 3-factor model from Fama and French (1993): Fama and French (1993) 3 factor model is estimated from an expected form of the CAPM regression. It takes the size and the book to market ratio of the firm into account. It uses the time series approach from Black, Jensen, and Scholles (1972) in the sense that the monthly returns on stocks are regressed on the returns to a market portfolio of stocks and mimicking portfolios for size and book to market. It is estimated from the following extension of the CAPM regression: Rpt-Rft=ÃŽÂ ±p+ÃŽÂ ²pi (Rmt â€Å"Rft) + ÃŽÂ ²p2 SMBt +ÃŽÂ ²p3 HMLt + ept t= 1,2,,T Where, SMBt= the factor mimicking portfolios for size, and HMLt= the factor mimicking portfolio for book to market equity. SMLt which comes from small minus big meant to mimic the risk factor in returns related to size, and HMLt which comes from high minus low meant to mimic the risk factor in returns related to book to market equity8. HML (respectively SMB) is neutral relative to the size effect (respectively to the book to market). This means that these factors do a good job isolating the firm-specific components of returns (Fama and French 1993, 1995, 1996 and 2000). 8 See Fama and French (1993) for a precise description of the construction of SMBt and HMLt. The Sharp Ratio (1966): The Sharp ratios (1966) calculate the ratio of the average excess return and the return standard deviation of the fund that is being evaluated. As such it measures the excess return per unit of risk. Assuming all asset returns to be normally distributed, the CAPM tells us that in equilibrium the highest attainable Sharpe ratio is that of the market index. In more general terms, the market indexs sharp ratio represents the set of return distributions that is obtained when statically combining the market index with cash. With the market index being highly diversified, these distributions offer the highest achievable expected return for every possible standard deviation (Gaurav S. Amin and Harry M.Kat (2002), Hedge fund performance 1990-2000). Jensens Alpha (1968): Jensens alpha was introduced in Jensen (1968) and equals the intercept of the regression: (Rh-Rf)= ÃŽÂ ± + ÃŽÂ ² (Ri- Rf) + eh, Where Rh is the fund return, Rf is the risk free rate and Ri is the total return on the market index. Like the Sharpe ratio, Jensens alpha is rooted in the CAPM. According to the CAPM, in equilibrium all (portfolios of) assets with the same beta will offer the same expected return, any positive deviation therefore indicates superior performance (Gaurav S. Amin and Harry M.Kat (2002), Hedge fund performance 1990-2000). Capital Asset Pricing Model: The first performance model that will be used is a capital asset pricing based single index model (CAPM). This model developed by Sharpe (1964) and Linter (1965) is the oldest performance evaluation model. Its formula is the following: Rpt â€Å" Rft = ÃŽÂ ±p + ÃŽÂ ²p (Rmt-Rft) + ept t= 1,2,, T Where, Rpt= return of fund p in month t, Rft= risk free return on month t, Rmt= return of the market portfolio on month t, ept= the error term, ÃŽÂ ±p and ÃŽÂ ²p= the intercept and the slope of the regression estimated. The intercept of this equation, ÃŽÂ ±p commonly called Jensens alpha (1968) is usually interpreted as a measure of out or under performance relative to the market proxy used. There are several extension of this model have been developed like- the Breeden (1979) intertemporal CAPM or the Ferson and Schadt (1996) CAPM that allows time variation in the expected returns and the risk (Capocci Daniel 2001, An analysis of hedge fund performance 1984- 2000). 4. Data Preparation: For data preparation my first step will be to collect the monthly data of the hedge fund index, FTSE 100 and SP 500. For my data collection I will use some sources like- Credit Suisse/ Tremont Hedge Fund Index (CSTHFI hereafter) which is an appropriate representative of the entire hedge fund industry, there are three biggest database of hedge fund in the world these are Managed Account Reports (MAR), Hedge Fund Research, Inc (HFR) and TASS Management (TASS). These databases were the most used in academic and commercial hedge fund studies. For the FTSE 100 and SP 500 I will use yahoo finance. 4.1. Bias in Hedge fund data: According to Ackermann et al. (1999) and to Fung and Hsieh (2000), two upward biases exist in the case of hedge funds. They do not exist in the case of mutual funds, and they both have an opposite impact to the survivorship bias. Survivorship bias is an important issue in mutual funds performance studies (see Carhart and al. 2000). This bias is present when a database contains only funds that have data for the whole period studies. In this case, there is a risk of overestimating the mean performance because the funds that would have ceased to exist because of their bad performance would not be taken into account. The two upward biases exist because, since hedge funds are not allowed to advertise, they consider inclusion in a database primarily as a marketing tool. The first phenomenon stressed by Ackermann and al. (1999) and called the self-selection bias is present because funds that realize good performance have less incentive to report their performance to data providers in order to attract new investors. The second point called instant history bias or backfilled bias (Fung and Hsieh 2000) occurs because after inclusion a funds performance history is backfilled. This may cause an upward bias because funds with less satisfactory performance history are less likely to apply for inclusion than funds with good performance history (Capocci Daniel 2001, An analysis of hedge fund performance 1984- 2000). To avoid these biases I will try to take all funds both living and dissolved into account. Once I have collected all the data that I need I will use SPSS to test the correlation between my two benchmarks FTSE 100 and SP 500. 5. Contingency Plan: To make my research effective I made a well constructed plan. I have drafted a project plan (Appendix A) with scheduled dates for when I intend to complete sections for submission. After completing my final exam I will jump in to this field. Advises from previous students who completed their dissertation, I made my project plan flexible to keep some things in mind like supervisors holiday and any unforeseen events such as my illness. I will try to keep a good communication with my supervisor for checking that I am in right track. I plan to make some formal meetings with my supervisor to discuss my progress and I will try to inform him about the state of my work. It is hard to spending too much time over one task and going off track, I hope I will manage this if there is no rush at the very last minute. Another worry is the collecting and analysing the data, that is why I plan to collect the data early June once I have finished my research design. If I face any kind of difficulties I will inform him and make a cut-off point where I should stop searching the board data and start my own primary data. As I do all SPSS classes and briefly touched about this, I think it will be easy to analyze the data but I need to increase a bit of use of control on it by practicing more. So I will set aside time for collecting data and practice more SPSS for regression analysis. I hope if all these go well, I will make my dissertation very effectively.