Introduction
Investment practices are generally defined by the market situation and the financial abilities of the company. The brand, which may be invested into, requires a thorough analysis of the funds, which will be invested, the fund management principles of the organization or brand, which requires investment. This paper aims to explain the necessity to invest in a selected brand, ground the possible benefits of investment, and give recommendations on capitalizing on the selected brand. The selection of the investment strategy, in general, will be defined based on the principles of portfolio and fund management.
Trend Importance
The trend, which is recommended for further investment is Virgin Blue Airlines. The key reason, why this company should be invested in the managed investment fund principle, which is applied for all investment resources. The general characteristic of this investment portfolio is closely associated with the importance of lower financial risks, and the necessity to improve the financial and marketing performance, which the company faces at the moment.
Virgin Blue Airlines is a steadily developing company, which acts on the market of low-cost airline transportation. The investment fund of the company is fully managed, which makes the invested resources controllable. The fund manager will be helpful for risk minimization, and the investment funds may be spread across several asset classes (Hopkins, Kontnik, and Turnage 2009). On the other hand, if the returns should be increased, a more volatile investment strategy may be selected. The managed fund principle presupposes the investment strategy changing, however, this change depends on the generally accepted management principle, which fund manager should match with the general investment policy of the company. As for Virgin Blue, the fund management strategy presupposes low risks. The key features of the fund management strategy, which will help to benefit are as follows:
- Professional fund management of the debt-based capital structure is aimed at minimizing the risks for the stakeholders
- A regular savings plan is issued for better control of the invested funds
- Investment choice is available to any stakeholder. Virgin Blue operates several sub-brands, and each may be invested separately
- The investment management principles of Virgin Blue presuppose access to international shares and property developments of the entire Virgin Corporation
- The applied management strategy ensures fund diversification across a range of asset classes (Murphy, 2008)
To measure the invested resources and the performance of the managed fund, the stakeholder will only need to measure the return and consider the growth of the assets.
Market Realization
The importance of investment in the selected brand has numerous benefits, nevertheless, few stakeholders agreed to invest in it. It may be explained by the fact that some experts (Baker, 2009) consider the applied strategy non-beneficial, as the minimization of risk following the strategy, applied by Virgin Blue Company minimizes the benefits, thus, the returns of the investment fund are low, and do not grant access to direct shares, while per Tollington (2002, p. 54): “Direct shares generate higher returns than all other asset classes. Over time, international shares have performed better than Australian shares, but Australian shares generally provide steadier income and may offer tax benefits.” In the light of this statement, it should be emphasized that Virgin Corporation, in general, does not fit the Australian economy, where Virgin Blue operates, consequently, the company may experience risks and difficulties even in the circumstances of a stable economic position. On the other hand, access to direct shares is regarded as the non-grounded risk for withdrawing returns from investment funds.
Additionally, the company is subjected to valuation risks, and it should be stated that the actual benefits of the managed fund are seriously violated, while valuation risks are not minimized (Yen, Coats, and Dalton, 2006), consequently, the actual necessity of investment becomes less significant.
Capitalizing the Trend
The capitalization process will be closely associated with the aspects of fund management, and minimization and avoiding of the potential risks. The capitalization process will require a thorough analysis of the potential return rates, depending on the currency which will be invested, and the valuation rates, associated with the marketing position of the company. Thus, the sum, which is intended for investment should be properly allocated within several sub-spheres of the company, to minimize the valuation risks, and the management strategy, which should be applied for this fund requires a depth analysis of the return rates maximization in the circumstances of the unstable low-cost airline transportation market.
Conclusion
Virgin Blue Airlines may be regarded as a reliable brand for investing. The benefits of the managed investment funds are obvious, however, considering the opinion of some investment researchers, the investment in low-cost airline transportation, in general, can not be regarded as a reliable and low-risk affair. However, the talented management of the company is aimed at minimizing the possible risks, and brand capitalization may be reliable enough even in the circumstances of an unstable market.
Reference List
Baker, J. C. 2009. Foreign Direct Investment in Less Developed Countries: The Role of ICSID and MIGA. Westport, CT: Quorum Books.
Hopkins, D. M., Kontnik, L. T., & Turnage, M. T. 2009. Counterfeiting Exposed: Protecting Your Brand and Customers. Hoboken, NJ: Wiley.
Murphy, A. 2008. Scientific Investment Analysis (2nd ed.). Westport, CT: Quorum Books.
Tollington, T. 2002. Brand Assets. New York: John Wiley & Sons.
Yen, S. T., Coats, R. M., & Dalton, T. R. 2006. Brand-Name Investment of Candidates and District Homogeneity: An Ordinal Response Model. Southern Economic Journal, 58(4), 988