Is Coca Cola the Perfect Business? Essay

A. One of the most important skills to learn in managerial economics is the ability to identify a good commerce. Discuss at least iv characteristics of a good business.Based on the clause about Coca-Cola, there argon five essential characteristics of a business for it to be considered as a Good Business. First, it should be harmonic to both young and old alike. Second, it moldiness obligate a unambiguous characteristic which cannot be easily imitated by others. Third, it moldiness already do an impact to the commercialize because it has already earned a large pot of market shargon. Fourth, profit margin and casts of return should be high. And Lastly, it moldiness have a competitive favour or economic moat. appeal to both young and old alike. The merchandise that the company sells / offers can be used or consumed by people of all ages. It must be enjoyed not only by selected markets rather it should be enjoyed by all. evident characteristic which cannot be easily imitated b y others. The product that the company sells / offers must be unique and exceptional. It must safeguard its secret ingredients. So that it cannot be easily imitated by others.Large theatrical role of market share. The product that the company sells / offers is used or consumed by a large deal of the market and must be preferred above other companies who are in the same line of business.A good business must able to deploy a lot of incremental capital at an above average rate of return for a long time. If a business is able to do that, it will in effect be helping its shareholders compound their money at a good rate of return and saving them the trouble of having to invest the extra dividends they would have authorized if the company didnt reinvest in its operations.A durable competitive advantage or economic moat is what sets apart the good and great companies from the average and downright lousy companies. A significant competitive advantage allows a company to earn better than average profits or perhaps even excellent profits, and protects the companys profits from competitors that want to desexualise a piece of the action. A strong brand, being the low-cost producer, pa tennerts, and having a near monopoly over a certain market are whatever sources of competitive advantage.B. Identify and talk about at least four companies that you regard as having the characteristics listed here.Apple Company This popular company is the forefront behind gadgets like iPod, iPad, iPhone, and MacBooks. Their products are user-friendly and can easily be used by people both young and old. Also, Apple ever sees to it that their products offer unique features which suit the peoples wants and needs enabling the people to patronize their products thus in return, earning a large portion of market share compared to other competitors.SM Investments Corporation This is composed conference of companies Retail, Mall Operations, Property, and Banking & Finance.RETAIL SM is th e Philippines most dominant player in retail with 193 stores nationwide. Of these, 46 are SM Department Stores 37 are SM Supermarkets, 76 are SaveMore branches and 34 are SM Hypermarkets.center OPERATIONS SM is the Philippines largest shopping mall developer and operator with 46 malls nationwide. SM Prime also owns 4 malls in chinawares plump for and third-tier cities, namely Xiamen, Jinjiang, Chengdu, and Suzhou. By the end of 2012, SM Prime will have a total of 46 malls in the Philippines and five in China with a combined GFA of 6.3 mn sqm.PROPERTY SMs post group is a fast emerging business with engagements in residential, commercial, unoccupied and hotel development.SMDC is rapidly growing with 15 residential projects under its SM Residences and twain projects under its M Place brand.BANKING & FINANCE SMs believe network is the largest in the Philippines with its 41% interest in BDO Unibank and 20% interest in China Banking Corp. In 2Q 2012, BDO became the countrys lar gest bank in terms of assets with 744 branches nationwide. Chinabank is the 8th largest with 307 branches nationwide.ABS-CBN is a major Filipino commercial television network owned and operated by the Filipino media conglomerate ABS-CBN Corporation, a publically traded company. It is the countrys leading television network with an advertising gross amounted to 17.5 billion pesos for the fiscal year 2011San Miguel Corporation is Southeast Asias largest in public listed food, beverage and packaging company with over 17,000 employees in over degree Celsius major facilities throughout the Asia-Pacific region. San Miguel carries many brand names in the Philippine food and beverage industry, including San Miguel Pale Pilsen, Ginebra San Miguel, Monterey, Magnolia, and Purefoods. San Miguel Beer is one of the largest selling beers and among the top ten selling beer brands in the world. SMC manufacturing operations extend beyond its home market to Hong Kong, China, Indonesia, Vietnam, Thailand, Malaysia and Australia and its products are exported to 60 markets around the world.C. Suppose you bought common stock in each of the four companies identifies here. Three years from now, how would you come if your analysis was crystalize? What would convince you that your analysis was wrong?Supposing I bought common stock in each of the four companies indentified above three years from now, I would know that my analyses were correct by simply looking back and evaluating if the company silence suffice the list of characteristics of a good business. I will be convinced that my analyses were wrong if it will not suffice even unspoiled one of the characteristics listed for it to be considered as a good business.