<span>is that the capm recognizes only one systematic risk factor.</span>
This is an example of "proximal goal".
Proximal objectives are best characterized as here and now and are instrumental in accomplishing distal objectives in which are long haul. The proximal objectives are the giving wellsprings of extra data in regards to exhibitions that isn't uncovered with a distal objective. It is basic that proximal objectives are more sensible to achieve the fulfillment on account of the time hole in getting the objectives. For a complex task, it would not bode well to have distal objectives set up in light of the fact that it at that point would set aside a long span of opportunity to close outcomes in a snappy way.
Back in 2015, McDonald’s was struggling. In Europe, sales were down 1.4% across the previous 6 years; 3.3% down in the US and almost 10% down across Africa and the Middle East. There were a myriad of challenges to overcome. Rising expectations of customer experience, new standards of convenience, weak in-store technology, a sprawling menu, a PR-bruised brand and questionable ingredients to name but a few.
McDonald’s are the original fast-food innovators; creating a level of standardisation that is quite frankly, remarkable. Buy a Big Mac in Beijing and it’ll taste the same as in Stratford-Upon Avon.
So when you’ve optimised product delivery, supply chain and flavour experience to such an incredible degree — how do you increase bottom line growth? It’s not going to come from making the Big Mac cheaper to produce — you’ve already turned those stones over (multiple times).
The answer of course, is to drive purchase frequency and increase margins through new products.
Numerous studies have shown that no matter what options are available, people tend to stick with the default options and choices they’ve made habitually. This is even more true when someone faces a broad selection of choices. We try to mitigate the risk of buyers remorse by sticking with the choices we know are ‘safe’.
McDonald’s has a uniquely pervasive presence in modern life with many of us having developed a pattern of ordering behaviour over the course of our lives (from Happy Meals to hangover cures). This creates a unique, and less cited, challenge for McDonald’s’ reinvention: how do you break people out of the default buying behaviours they’ve developed over decades?
In its simplest sense, the new format is designed to improve customer experience, which will in turn drive frequency and a shift in buying behaviour (for some) towards higher margin items. The most important shift in buying patterns is to drive reappraisal of the Signature range to make sure they maximise potential spend from those customers who can afford, and want, a more premium experience.
I hope this was helpful
The economics concepts of income effect and substitution effect express changes in the market and how these changes impact consumption patterns for consumer goods and services. The income effect expresses the impact of increased purchasing power on consumption, while the substitution effect describes how consumption is impacted by changing relative prices. Different goods and services experience these changes in different ways. Some products, called inferior goods, generally decrease in consumption whenever incomes increase. Consumer spending and consumption of normal goods typically increases with higher purchasing power, in contrast with inferior goods.
Read more: What's the difference between the income effect and the substitution effect? | Investopedia http://www.investopedia.com/ask/answers/041415/whats-difference-between-income-effect-and-substitution-effect.asp#ixzz4wcsy3IOK
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