open market operations

Examples of open market operations in the following topics:

• Open Market Operations

  • Open market operations (OMO) refer to a central bank's selling or buying of government bonds on the open market.
  • An open market operation (also known as OMO) is an activity by a central bank (in the U.S. it is the Fed) to buy or sell government bonds on the open market.
  • In theory, the Federal Reserve could conduct open market operations by purchasing or selling any type of asset.
  • In practice, however, most assets cannot be traded readily enough to accommodate open market operations.
  • Define the role and function of an open market operation (OMO)

• Control of the Money Supply

  • These actions are known as open market operations and allow central banks to achieve a desired level of reserves.
  • The central bank retains tight control over its nation's money supply through the use of open market operations, the discount rate, and reserve requirements.
  • Open market operations, the most dominant instrument of monetary policy, are the behavior of a nation's central bank to trade or purchase government securities for cash in attempts to expand or contract the total money supply.
  • In recent years, some academic economists renowned for their work on the implications of rational expectations have argued that open market operations are irrelevant.
  • Summarize the argument against the role of open market operations in determining the nation's money supply

• Growth Through Monetary Policy

  • In general, these institutions are called "central banks" and often have other responsibilities, such as supervising the smooth operation of the financial system.
  • The primary tool of monetary policy is open market operations.
  • All of these purchases or sales result in more or less base currency entering or leaving market circulation.
  • Usually, the short-term goal of open market operations is to achieve a specific short-term interest rate target.

• Global finance: initial considerations

  • They may also want to obtain financing in the local markets they choose to serve.
  • As a result, with constant economic changes, and fluctuations in the marketplace, along with trade barriers being lowered around the world, the entrepreneurs of tomorrow cannot limit their finance knowledge to just their home country, but can be open to looking at alternative sources to fund their business operations.
  • The market operates continuously, 24 hours a day, because a financial center is always open somewhere in the world.
  • The interconnection of the markets makes continuous trading possible (Carrada-Bravo, 2003).
  • In addition, the foreign exchange market is one of the most traded and liquid instruments in the financial world, and serves as a barometer of broader financial market conditions and risk appetite.

• Modern Trends in Marketing

  • Modern trends in marketing include relationship marketing, business or industrial marketing, and societal marketing.
  • Modern trends in marketing include relationship marketing, business or industrial marketing, and societal marketing .
  • With the growth of the Internet and mobile platforms, relationship marketing has continued to evolve as technology opens more collaborative and social communication channels.
  • Business marketing is the practice of selling products and services to other companies or organizations that either resell them, use them as components in products or services they offer, or use them to support their operations.
  • Modern trends in marketing include relationship marketing, industrial marketing, and societal marketing.

• Consumer marketing models

  • The formal use of marketing concepts is a fairly recent activity in developing economies.
  • Given the emergence of a global economy, however, which brought the opening of markets and increased competition, the traditional approach has changed dramatically.
  • The latter was operating on a product model rather than a marketing model.
  • In summary, market orientation is essentially a customer orientation.
  • Understanding customer needs lies at the core of the marketing concept.

• Licensing

  • Licensing gives a licensee certain rights or resources to manufacture and/or market a certain product in a host country.
  • Suppose Company A, a manufacturer and seller of Baubles, was based in the US and wanted to expand to the Chinese market with an international business license.
  • To summarize, in this foreign market entry mode, a licensor in the home country makes limited rights or resources available to the licensee in the host country.
  • The rights or resources may include patents, trademarks, managerial skills, technology, and others that can make it possible for the licensee to manufacture and sell in the host country a similar product to the one the licensor has already been producing and selling in the home country without requiring the licensor to open a new operation overseas.
  • Loss of control of the licensee manufacture and marketing operations and practices leading to loss of quality

• General and Administrative Expenses (G&A)

  • General: General operating expenses and taxes that are directly related to the general operation of the company but don't relate to the other two categories.
  • General operating expenses include the costs necessary to keep businesses running, without easily allocating them to any specific project, or operation.
  • In contrast to job-specific or project overhead, general overhead is the cost necessary to keep the doors of your business open that cannot easily be allocated to any one project.
  • General overhead is commonly called "general and administrative expense," or "G&A," or simply "overhead. " G&A includes office rent, heat and air conditioning, electricity, phones/broadband, computer equipment, software, office supplies, furniture, executive and administrative salaries and expenses, outside accounting fees, legal expenses, subscriptions, advertising, non-job insurance, and similar items associated with operating your business (i.e., just about every expense that would continue even if you had no jobs under construction).
  • Examples of the latter include payroll expenses, marketing, legal expenses, repairs, etc.

• Trends in Franchises: International Adoptions

  • The concept of franchising enables organizations to expand their business through empowering locals in a given area to open a business location representing the parent company's brand, operational strategy, and products.
  • When considering the current trends in franchising from an international perspective, it's important to understand why organizations do this, why individuals are interested in opening a franchise, and why governments are open to allowing this approach.
  • For the franchisee, much of the initial business plan, sourcing, quality control, marketing, and other core functions are already prepared, tried, and tested.
  • Convenience stores that franchise, such as 7-Eleven, operate quite similarly.
  • As of 2014, KFC carried out operations in all of the countries highlighted in green.

• Cultural Barriers

  • Poor knowledge of emerging markets or lack of information on potentially profitable markets
  • Two of these items, market entry and transaction complexity, remained problematic in ongoing operations and in new product market expansion.
  • Import restrictions and export competition became more problematic in later phases, while financial problems were pervasive at all phases of the export operation.
  • This means that a resident of Country A operating in Country B must understand that lines of authority are more rigid in Country B and act accordingly.
  • Source: Hofstede's dimensions, as utilized in this figure, are derived from Wikipedia's open source content.