May 24, 2010

Leant how to sift through credit quotes

19Compassion is the ability to understand and communicate that we recognize each other as fallible human beings. It means that we understand that people make mistakes, sometimes fail, and do not always live up to their potential or to our expectations. Dealing with our strengths and weaknesses as people and doing so with dignity and respect for others are all part of compassion. When we do not judge others and are sensitive to their situations, we build trust with them, opening the door for them to be honest and straightforward with us.

While candor refers to the accuracy of communication, credibility refers to the intent of the person offering it. A person’s motive for sharing information with you speaks to his credibility.Are his motives self-serving? Is he giving you information to make others look bad? Partners that are not credible limit trust because people must sift through the message to understand the intent. Once partners weaken their credibility, their effectiveness and that of the partnership are severely damaged.

Whenever you move from “I” to “we” in a partnership, trust issues emerge. Unless partners can reach a consensus, they’ll find that power plays, egos, conflicting agendas, and other disruptive dynamics can take over even well-intentioned partnerships and spin them into chaos and dysfunction. Trust is absolutely essential for working through these complex human dynamics.

January 2, 2010

What information about a credit you should gather

7The majority of price movements that is caused by a rating action is explained by new information which is revealed at the time of the rating action. Typically companies reserve the right to hold back certain information from investors, clients, business partners and competitors. This can be long-term projections, business plans or internal analyses. Usually rating agencies have access to internal documents during their rating process. Therefore, the rating of a company reflects more information than available to the public and to institutional investors such as mutual funds or  insurance companies. A rating change itself is therefore an information about a change of a company’s credit quality because it incorporates nonpublic information.

October 25, 2009

Deciding where to position a credit

Positioning depends first on finding a niche or part of the market where there is space to establish a profitable position. To discover whether one exists requires an understanding of the trends and factors influencing the market.

How best to focus on the customer is another important decision. How will potential customers react to the message or offer? Or, to put it another way, what message will have the greatest impact on the customer? With positioning decisions, timing is important. First movers have a head start and can get to know the market in detail and build a strong customer-base, ideally establishing a rapport with customers. Brands that are not the first mover should endeavour to launch when the market leader is weak or quiet, or both.

October 23, 2009

Avoiding blood on the carpet: credit repositioning

When Dupont, an industrial conglomerate, realised that it was not selling enough fibres for use in the carpeting industry, it decided to look at the whole value chain: carpet manufacturers, wholesalers, distributors (retailers) and customers. It found that many customers preferred tiles or wooden floors for ease of maintenance and durability, but also because of unsatisfactory experiences with carpet retailers.

Reasons for their dissatisfaction included inconvenient locations, unimpressive ranges, lack of samples, unreliable delivery and poor fitting. Dupont changed its division from carpet fibre to flooring systems and started to think more of the decorative and fashion features of carpets, rather than just the functional ones (robustness, stain resistance, durability, noise and heat insulation). Consequently, it developed information for the whole value chain, including new information and advertising for customers on how to buy and maintain carpeting, and the Dupont hotline for retailers, providing answers for consumer questions.

Dupont’s expertise on products, selling and understanding consumers was also available to retailers on video, and the company provided information on market trends for carpet manufacturers, wholesalers and retailers.