Global Sector and
Industry Classification (SIC) Statistics consist of data collected and analysed
on and about each countries’ Economic Drivers. Pointing to the best Business
Models operating under a particular SIC Economic Driver, establishes and sets
Global Standards. This Global Standard is the base by which all SIC Economic
Driver’s operators are measured and compared to be judged as viable. Compared
by quality, age, method, function, process, type, etc. Measured by input, size,
quantity, output, etc. And ranked by historical performance of Free Cash Flow.
Hence, any operation, comparing and measuring like to like, can be graded
against the Global Standard.
Each Individual Operator, working within
the SIC Economic Driver, should at Board level constantly separate success from
failing profit centres and make decisions to continue or transform, preserve or
abandon. Closely and Constantly Monitoring each operator’s profit centre will
identify waste, corruption and other losses and implement early mitigating
actions. Hence, as a SIC Economic Driver with individual operators monitoring
and reporting annually to an independent Office Of Budgets (OOB), a nation can
measure its Economic Drivers. Such an OOB would pronounce on and incorporate
each SIC Economic Driver’s contribution to the National Budget; Taxation Income
Revenues and to National Statistics; Gross Domestic Product (GDP).
Business Models should be designed to
produce a range (Quantity & Quality) of product to supply its market
demands, to preserve and expand a SIC Economic Driver, its direct and indirect
operations, its direct and indirect jobs, and sustain its taxation revenue via
Mergers and Acquisitions. Merging numerous small entities, cranking up
production or combining Operations to maximize Economies-of-Scale (School of
Fish moving in unison) will service an expanding market. Acquiring large
entities, slowing down production or shutting down Operations to minimize
Economies-of-Scale (Big Fish-eating Smaller Fish) will control price margins.
Hence, growing the market share under control, whilst, protecting the margins
via costing and pricing formulas.
A Business Model would also transform or
create a new SIC Economic Driver via Synergies. Combining and transforming to
facilitate Consumers’ expectations and Shareholders’ returns, is for the very
survival of this SIC Economic Driver, Operations, Jobs and Taxes. Vertical or
horizontal integration are well-known methods of combining sectors and
industries. Bettering the product range, creating new revenue streams and
reducing administration expenses will add efficiencies and effectiveness throughout
operations. Mobile processing or locating production plants in close proximity
to the major raw material or to a central access or distribution point allows
for transportation and communication savings. Further Synergies, are constantly
being researched, developed and market tested. As an example, consider
Renewable Energy or Battery Technology. What is to become the Global Standard?
Discussions and Decisions to Continue,
Transform, Preserve or Abandon Business Models are judged by the Free Cash Flow
which is projected to be generated, per profit centre, in the short to medium
term. Free Cash Flow is calculated as Earnings before Interest, Taxation,
Depreciation and Amortisation (EBITDA), used to measure an operation’s
historical performance, which is compared to and ranked against Global Industry
Statistics. Hence, such Free Cash Flow must be positive and able to pay these
omitted but committed obligations to attain Breakeven, assign Fair Value and be
judged Viable. Hence, able to contribute to bettering GDP, Taxes, Jobs, and
Lifestyles.
Rationale
T.A.J
& Associates Company Limited
uses this occasion to comment on topics that have been covered, both academically
and by the mainstream media, to add its opinion and point out investment
opportunity, not to invoke any social action.
