Business Plan

Management Consulting Services Business Plan

Management Consulting Services Business Plan

Ninja Capital Investments Co. Ltd

 

Executive Summary

Introduction

After the financial crisis, many risk takers are criticized by public opinion. Now, our market and companies are required to be safe and stable. However, we cannot stop earn our money because economy should not stop due to stagflation. Financial company need to try to optimize our economy and flow money. Our concept is following this situation.

The Company and Service

Our company has been advising many companies since 1950. We can provide various types of supports and we have experiences of mergers and acquisitions of large companies a lot. These cases make us famous so we need to take responsible behaviors and keep customer’s reliability.

The Market

There so many competitors such as other advisory companies. Lately, our financial market is expanding rapidly and more complicated than before. The demand of our kind of job is more required. We will help the complicated problems and provide many solutions and strategies for customers. However, some financial companies such as hedge funds are also providing advice for customers. Sometimes, they don’t take money because they want to buy out the customer’s company.

Objectives and Key to success

We would like to provide solutions and strategies for your company. It will be helpful for your decision of making portfolio. We can support your company in long term and if your company couldn’t earn some profits, we will assure some warranty. Our key of success is reliability and long term relationship. We will try to meet you face to face and make a good relationship.

 

Strategy and Implementation Summary

Risk preference theory for decision making

I would like to compare below types of investments and show why rational decision making is important.

The below graphs has three financial instruments each. (a) is safety chooser and (b) is risk chooser. There are some tendencies between each graph.

Tendencies

  1. Difference of marginal rate of substitution

Graph (a) describes an investor who has a high marginal rate of substitution between return and safety and (b) is vice versa.

 

  1. Different probability

The three indifferent curves (individuals) can be three different financial instruments such as equity, bond, options, mortgage, and so on. The important point is that if you see graph (b) and vertical line of “low”, you could see three crossing intersections on the line. However, each individual such as financial instruments has each probability to make a profit or default. For example, when all of them are on the “low” vertical line, one indifferent curve could get 6.00 returns but other two might be defaulted by financial crisis such as bankruptcy.

 

 

  1. The importance of gathering and focusing each portfolio

Each investor has different optimization and preference. This can be showed by the different shapes of each portfolio. Safety chooser’s curves are steep and gathering to safety side. Risk chooser’s curves are slightly and gathering to return side.

 

(I made new graph for understanding easily)

The most important point is that gathering and focusing them is to satisfy and optimize their preference. For example, if you compare above new graph’s vertical line of “medium” including red point and graph (b)’s vertical line of “low”, both of lines could be crossing three intersections. However, the ranges of intersections are different. The red point is actually safe and profitable than any other else, but risk chooser never care about safety and never select this one. The points on new graph’s vertical line of “medium” are separated such as 6.00, 4.49, and 2.94. The total return is 14 or something. On other hand, the points on graph (b)’s vertical line of “low” is not separated. They are between 4.49 and 6.00. The total return is going to be near 20. This is why gathering is important for their preferences and profit or safety maximization. Safety chooser’s case can say the same thing on the safety side.

 

From the point of view of investors

There are some critical and common key points to analyze and optimize our decision from the point of view of investors.

  1. Choice one of them from (a) or (b) decision.
  2. Read market situation
  3. Consider our company such as reputation and history
  4. Arrange the three financial instruments

Apply this theory for your company case by case

.

Now, if I move a dotted line to upward, we can get almost the same return as risk chooser’s one and much less risky. This method is still risker than safety one. However this method is really flexible and we can change this graph case by case. Financial instruments are always moving. Our knowledge and these techniques will be helpful for your company.

 

Reference

Managerial Economics and Business Strategy           seventh edition               Michael R. Baye