What is Market Share?

Market share is the portion or percentage of sales of a particular product or service in a given region that are controlled by a company. If, for example, there are 100 widgets sold in a country and company A sells 43 of them, then company A has a 43% market share. You can also calculate market share using revenue instead of units sold. If company A sold widgets for a total cost of $860 and the people in the country spend a total of $2,000 on the same widgets, then the market share is $860/$2,000 or 43%. The two different methods of calculating market share won't always provide the same answer, because different companies may charge slightly different prices for the same type of widget.
Market share is used by businesses to determine their competitive strength in a sector as compared to other companies in the same sector. It also allows you to accurately assess your performance from year to year. If you only use sales to measure your performance, then you don't take into account the market conditions that may have improved or decreased your sales. Your sales may have gone up because of increased popularity of your type of widget, or they may have gone down because of a drought or recession. Since those factors are beyond your control, they don't give you meaningful information about how you are actually doing as a company in terms of improving your business. By measuring market share, you can see if you are doing better or worse compared to other companies that are facing the same challenges and opportunities that you are.
There are four basic ways you can improve your market share. You can improve your product so that it is better than your competitors or you can change the price or offer special incentives for buyers, such as discounts or sales. Alternatively, you can find new methods to distribute your product so people can buy it in more places. Finally, you can advertise and promote your product. Using these techniques in any combination may improve market share.
Related topics
Increased market share is not always the best solution for businesses. It might not be profitable if it is associated with expensive advertising or a big price decrease. A company may not be able to meet the demand of an increased market share without huge investments in new equipment and employees. In some cases it can be to a company's advantage to decrease market share, if the lower costs of lower market share can improve profitability. Managing market share, therefore, is a very important aspect of managing a business.

Banking in Nepal

Banks are institution which collect deposits, provide loans, issue credit and handle various kinds of transaction in money and monetary instrument.


In Nepal bank is started in 1937 by Nepal bank limited which is the oldest bank in Nepal. From this the people of the country are started to save the money in bank and various kinds of payment and received are made through the bank and which help to keep their money safe. Banks are provided interest on the deposit amount. They are providing loan facility which help people to start their business. In our country Nepal all the banks are generated with the Central Bank. There are 298 banks in Nepal other are financial institution. There are different types of bank in Nepal and the some rule of the bank in Nepal is as:

A) Central Bank:
Central banks are the head of the every bank there is one central bank in every country. Central bank is the guardian of the entire banking system. All other banks are required to follow the instruction of central bank. It holds foreign exchange, issue note and control credit creation.
Functions of Central Bank:
-Banker to the Government
-Bankers to banks
-Note issue
-Custedian of foreign exchange and precious metals

B) Commercial Bank:
The institution which collect deposit, issue short term loan provide necessary facilities for trade and payments and various kinds of commercial services are called commercial banks.
Functions of Commercial Bank:
1) The excess of income over consumption is called saving. Such saving amounts are deposited in commercial banks. Payments for goods and services are drawn by cheques. Commercial banks pay interest on such deposits. In context of Nepal there are three kinds of deposits are mainly followed they are:
-Current deposit
Depositers can draw such deposit at any time partly or wholly. Banks are not paid interest for these deposits.
-Saving deposit
Depositers cannot draw saving deposit they need. Only limited amount can be drawn at a time. It earns interest.
-Fixed deposit
Amounts deposited for a fixed time is called fixed deposit. It is not promisible to draw any amount before fixed period expires. It earns higher interest it is because commercial banks can invest such deposits to earn profit.
Commercial banks are providing loans on interest. They are providing education, housing, vehicle, industry, business and other many more loan facility are providing to the Nepalese people which help to promote the life of illiterate people from destroy their assets.

C) Development Bank
Development banks are the specialized financial institutions that are sit up to provide loans for developmental purpose in the various sectors like agriculture, industry, service etc. The development banks also perform almost the same functions as commercial banks but they mainly focus on developmental activities. According to the data of 2007 there are 33 development banks but they are increasing in Nepal.

D) Finance Company
Finance companies are those financial institutions particularly engaged in small and short term consumer financing. The finance companies can accept deposits and extend short-term consumer loans with limited amount specified by central bank directives. The finance companies are small in size of capital and assets so that they can be established in regional (sub-regional level) where other banking institutions are not available.

The banks in Nepal are categorized in the system of Nepal Rastra Bank(NRB) they are mainly in three methods they are KA, KHA, GHA, 'ka' means the bank, 'kha' means the development bank and 'gha' means the finance company which are established with the authorization of Nepal Rastra Bank(NRB).

Important of banking in Nepal
Banking sector is the major institutional system in Nepal which carries out the financial flow within the economy. It can also be understood with the emergence of e-banking in the recent years. Banking sector is the lead economic of country. In the developing country most of people are under the poverty line. The banks should provide good and trustable facility. Now banking sector has been going to internet banking. So it is very important things are security and easiness and everywhere available facility is getting by Nepalese people. Now a day's people are getting easy facility through the internet. Banking system in Nepal are now a days in their competition and they are providing different facility to the customer like SMS banking, online banking and other many more. Due to such facility banking knowledge are forwarding to all the Nepalese people and now a days they are saving their money in bank. People of Nepal can exchange their banking work in any place due to the facility of e-banking. Banking is providing credit cards since 1990. ATM facility also famous in Nepal now a day which help to the customer it works 24 hours daily it was started in 1995. Due to the introduction of technology banking facility are popular to all the Nepalese people and they are keep their money safe for future purpose.

Banking are providing remittances facility where people from one place can send their money to his/her family members through banking safely due to the e-banking. Now a day the insurance are also very famous to Nepali and they are doing insurance. Such policy also invented by the banking of Nepal. Due to establishment of banking many people are getting job in banking sector.

ATM

ATM stands for Automated Teller Machine. It is a latest technology in world providing by the banks to their customer to withdraw cash immediately at any place. Now a day's in Nepal also it is most familiar to all the people. It is electrical use switching technology that organies digital data into 53-byte cell units and transmits them over a physical medium using digital signal technology. Individually, a cell is processed a synchronously relative to other related cells and is queued before being multiplexed over the transmission path.

It is designed to be easily implemented by hardware rather than software, faster processing and switch speeds are possible. The prespecified bit rates are either 155.520Mbps or 622.080Mbps. Speeds on ATM networks can reach 10 Gbps. Along with synchronous optical networks and several other technologies; ATM is a key component of broadband ISDN.
It is also known as a machine that bank customers use to make transactions without a human teller.

There are a growing number of banks that are providing free ATM cards to their customer. The customer who withdraw amount from the customer who have the account in that bank ATM can't cut the amount if customer are taking from other banking at that time bank are take some amount from customer account. From this kind of facility customer feel easy and they don't have to carry many amounts if they are going from one place to another place. Customers feel easy from robbing. Such facilities are providing their customer 24hr's they can take their money. In Nepal this facility was started from 1999. In this ATM machine people can take money by inserting card and and they should follow the rules and they can enter their pin number and they can withdraw their needed money easily. In Nepal at one time only Fifty Thousand amounts can draw by one person.

Historically, most banks have allowed their own customers to access their accounts with the bank for free while changing non-customers for use of their ATM. This gave banks with a large branch network a competitive advantage as banking with that bank offered the convenience of a greater number of free ATMs around the town. However branches are expensive to build and maintain and banks with few or no branches soon found that by reimbursing the fees charged to their customers when the customers use ATMs belonging to other banks, they could again the same.Competitive advantage at a much lower cost. Further, this cost could be contained by capping the amount of the fee reimbursed per transaction and or the number of transaction per month.

According to the banking with USAA Federal savings Bank which from it's beginnings a few decades ago has had customers world-wide but only one office at the USAA headquarters in San Antonio, Texas. Originally, deposits were made via mail or wire transfer and cash with draw as through other bank ATMs with USAA reimbursing the ATMs. Other banks, especially internet banks, have since followed suit and many now offer reimbursement of ATM fees.

SCT NETWORK USED IN ATM OF NEPAL

Smart Choice Technologies P. Ltd. is a company registered in Nepal and promoted by well-established entrepreneurs. The company was established2001.

The company has deployed a first-of-its-kind initiative in Nepal creating an integrated shared services network (SCT-Network) for Automated Teller machines (ATMs) and Point-of-sale (POS) Terminals, managed through a national switch. The SCT-Network is a fully integrated network supporting multiple device types and card acquiring standards.

This network has been made available, on a subscription basis (pay-per-use), to banks and financial institutions across the country. Besides the network, this national switch will also operate and manage domestic & international gateways and settlement systems. For inter-bank settlement, the company has appointed a settlement bank, which is responsible for the daily settlement of all ATM transactions on the network

The company has also launched a local debit card program (branded as SCT™) to enable banks to issue cards to customers at a fraction of the costs typically associated with international card schemes. The local debit card program offers a first-time opportunity for banks to issue and manage a local debit card program, with wide acceptability (due to the ATM & POS Network in Nepal and India and regional countries).

In addition, the company also provides a secure facility for Card and PIN production & management, customized for each bank. This facility is equipped with world standard Hardware Based Encryption (RACAL-HSM) supporting the latest technology.

The project also includes integration of ATMs and POS banks may have already invested in, and enable them to recover their investments on a significantly accelerated basis. The technology used in this project is tried and tested in many sites overseas and consequently mitigates the risk of technology failure that is typically associated with new technologies.
Now a day in Nepal the SCT network is excessively used and other are also used visa. More people are attracted from this facility and they have fill easy to their money transaction work if such facility are providing in village area of Nepal they are happier and the development of banking is increases rapidly.
The network provider for banking cards, Smart Choice Technologies (SCT) has added Bhutan's Bank as the first international bank in its network.

Money of Nepal

Money is a means, which is generally accepted as a means of payment and it possesses liquidity. It is a king of means, which is printed and acceptable to all for buying and selling goods and services. In other words, it refers to that commodity which performs as the medium of exchange goods and services, measuring value of factors of production, goods/services, common and useful means of credit transactions in business society and having quality of store of value of goods/services in the form of cash.

Types of Money
Money can be classified into various parts. On the basis of its evolution, there are following kinds of money.
1) Commodity Money
In the early days of human civilization, human society had used each and every commodity like, cattle and their bones and leathers, food grains etc as money. The commodities which are used as money, is called commodity money. The commodity money lacks the basic features of good money such as uniformity, stability, durability and transportability.
2) Metallic Money
Money made from metal like gold, silver, copper, brass, aluminum and other kinds of metal are used in coinage. This money possesses quality of good money. Such coins are known as metallic money.
The metallic money are two types they are:
-Full bodies or standard coins
If the face value and internal value are equal it is called standard coins. It is minted by precious metal such as gold, silver etc. It is minted according to coinage act.
-Token coin
If it is minted by cheaper metals such as aluminum, alloys etc. If the face value is greater than internal value it is called token coin. It is also known as subsidiary coin.
3) Paper Money
The money issued by the central bank or monetary authority of the country in the form of paper notes is called paper money. The paper money was first invented in china in 18th century. The paper money is widely used throughout the world. The paper money has the nature of unlimited legal tender so it is accepted by all. In our country Nepal there are 11 types of paper money that is Rs.1,2,5,10,20,25,50,100,250,500,1000.
Types of paper money:
-Representative paper money
Paper money that represents precious metal is known as representative paper money.
It substitutes gold and silver. Every rupee issued and brought to circulation represents equal amount of gold and silver is kept in the reserve with monetary authority. Full amount of gold and silver is kept in the reserve to issue paper notes.
-Convertible paper money
Paper money which can be fully converted into precious metals is known as convertible paper money. It does not fully represent gold and silver. Gold and silver reserve equal to the entire value of note issue is not held by the monetary authority.
-Non-convertible paper money
Paper money not convertible into gold and silver is known as non-convertible into gold and silver is known as non-convertible paper money. Nominal reserves may be held in precious metal, foreign exchange and securities. Government does not provide gold and silver for exchange of such paper money.
-Fiat money
The paper money issued on the order of the Government without any reserves is called fiat money. It is issued during emergency period. Therefore it is called emergency money. There is no limit to extend of issue.
3) Credit Money
Credit money means bank money. Credit instruments (cheques, drafts etc.) issued by banks are called credit money. The acceptance of credit money is not obligatory therefore it is called optional money. This money is exclusively used these days in transaction.

Functions of Money
In modern market economy, money is one of the most useful tools. The functions of money are expressed as in the following points:

1) Medium of exchange
Money is serving as a medium of exchange. It is the primary and unique function of money. The invention of money removed the difficulty of barter system. It provides the economic freedom to the people. People can sell or buy the products in the market. It also ensures the purchasing power to the consumers.

2) Measure of value
Money serves as a common measure of value and standard unit of account. After the invention of money, value of goods and services can be expressed in terms of money or currency. It helps to calculate the indicators like NI, per capita Income, GDP, GNP and Human Development Indicators as well.

3) Standard of deferred payment
Money serves as a standard of deferred payment. Amount of loan obtained is required to be return after a shorten period of time. Loan is borrowed in loan of money. After the expiry of time principal and interest are paid interms of money.

4) Store of value
Value cannot be stored interms of good. Storage in goods eats their value. Value stored in money remains safe and stable without destruction in value. Assets have lack of liquidity but money can be used at any time in any amount.

5) Distribution of National Income
Money is helpful in measuring the contribution of national income of various parts of a country. It is the sum of income by the contribution of all factors of production land, labour, capital, and organization in the form of rent, wage, interest and profit. All the components of national income such as GDP, GNP, Per Capita Income etc. are calculated in terms of money.

Importance of Money
Money serves as the wheel of economic system. Without money the present economic system will be disturb and our daily life will be complex. Nothing can move a head without money. Following are the importance of money:
A) Production
In production entrepreneur has to compensate all factors of production for their contribution. Rent to land, wages to laborers, interest to capital, profit to enterprises has to pay and without money we can't assess the exact compensation of factors of production.
B) Exchange or Trade
Money is common measure of exchange. It holds the quality of divisibility, portability and stability. It facilitates everyone to exchange the commodity without any fear of loss or any harm on the basis of price. This change has provided stimulation to the trade. With the help of money trading process becomes easy. Money can be given in the exchange of goods and received against the sale of goods.
C) Credit Facility
Money facilitates the environment of credit business in modern economy. It has made easier both lending and borrowing. Money is also used in standard of differed payment.
D) Socio Economic Development
Money plays a significant role in socio economic development. It is an effective means of mobilizing factors of production. Money facilitates the development of social and physical infrastructure such as road, communication, hospital etc. It also provides different fields like industry, agriculture, business etc. Modern economy is possible without use money.
E) Money in capital formation
Capital is scarce and important factor of production. Money provides mobility to capital. Capital formation is possible when there is an exact unit to measure the amount of the capital in the country. The process of capital formation in the modern economy is almost impossible without money.

Index Number in Money

Value of money changes from time to time according to variation in prices of different commodities. All prices do not change in the same extend. Some may rise or fall of remain constant. The degree of changes in price may differ from commodity to commodity.
Index number is an instrument to measure change in value of money according to change in prices. Generally index number takes the from of table.
Types of Index Number:
In general there are two types of index number:
i) Simple Index Number
The index number is constructed by giving equal importance or weighted to all commodities is called simple index number. In the simple index number, we assume base year equal to 100. According to this method, price index number is the outcome of the sum of prices for the current year divided by the sum of actual prices for the base year.
ii) Weighted Index Number
The index number constructing by giving weighted to various items as per their importance is called as weighted index number. Simple index number just gives equal importance to all commodities. Since, weighted index number are constructed on the basis of importance of commodities to the people, it measures accurate change in the value of money. In this method, different weights are assigned to different items according to their relative economic importance. There are different formulae to calculate index number by assigning different weights to different commodities.

Importance of Index Number
i) Measurement of changes in cost of living
When a price of commodity goes up, cost of living rises. If prices fall cost of living also fall.
ii) Study of fluctuation
By index number we can measured the rate of inflation and deflation.
iii) Wage policy formulation
Government changes wage policy on the basis of index number. If price level rises then government increases the wage level.
iv) Government policy formulation
Government has to formulate monetary and fiscal from time to time on the basis of price level.
v) Business forecast
Business is a matter of forecast. Prices may rise or fall in future. On the basis of past and present facts the future expectation can be made on the basis of index number.

Difficulties in constructing Index Number
i) Selection base year
One should be serious while selecting base year for index number. It should be normal year. It should not be fluctuated by any abnormal factors such as war, flood, earthquake etc. It is difficult task to select such.
ii) Problem of weight
Taking appropriate weight from the selected commodities is another difficulty of constructing index number. There should be accuracy and reliability in measuring the standard of weight commodities.
iii) Collection of data
Another difficulty of constructing index number is collection of data from the representative commodities. It is also difficult to find the reliable and authentic source of data.

Inflation, Deflation and it's cause in Economy

Inflation
Purchasing power of people expands with increase in money income supply of goods and services doesnot increase to the same extend. This brings about the economic disequilibrium, which is known as inflation.
There are various reason of inflation. Inflation occurs due to the following reasons:
1. Demand- pull inflation
If the aggregate demand for goods and services exceed the supply of these goods and services, it is called damand-pull inflation. It occurs due to the following reasons which are given below:
a) Reduction of taxation: If the government reduces the rates, it will increase purchasing power of people due to increase in disposable income of people. Consequently, the consumption expenditure and inflation occurs.
b) Miscellaneous: There are other of demand-pull inflation, such as increase in private expenditure, shortage of goods and services in the market, increasing the volume of exports, repayment of debts etc. all above mentioned factors creates the problem of excess of demand over supply of goods and services and finally inflation occurs.

2. Cost-push inflation: If the price of commodities rises due to the rise in cost of factors and raw materials, the inflation is called cost-push inflation. In cost push inflation, general price will be high and aggregate supply will be low as compared to aggregate demand for goods and services. Following are the causesof inflation;
a) Increase in wages: Sometimes price of goods and services increase rapidly due to rise in wage rate of labor. If the trade unions are strong in the country, they demand more wages to maintain real wages which increases the cost of production and inflation occurs, which is also known as wages push inflation.
b) International reasons: In the context of international trade, most of developing countries like Nepal are dependent on for raw materials, fuel energy, consumer goods etc. If the price of such goods increases in foreign country, obviously the price of such products increases in the country.


Deflation
Price decline adversely affects employment condition. It creates unemployment which brings deflation. It is also known as disinflation.
Following arethe causes of deflation:
1. Decrease in money supply: Deflation occurs due to the low supply of money in the economy. When the central bank or other financial institutions does not issue sufficient amount of money in comparison to goods and services produced in the economy, then there will be less velocity of money or circulation of money and finally deflation occurs.
2. Control of credit: One of the major functions of central bank is to control on credit creation to the commercial banks. The notice may circulate by central bank to commercial banks for increasing the ratio of cash reserved fund. It creates the deflation in the economy.
3. Increase in Tax Rate: Sometimes government may impose high direct tax rate to the people due to various reasons such as control on inflation, increase in public expenditure, fulfilling war and emergency expenses etc. The high burden of tax on people lacks the circulation of money in the economy, which creates deflation and as a result deflationary situation appears in the economy.