Investing capital in a company can be risky if the company is on a decline or is not able to capture the market share that it once had. Being the Chief Financial Officer (CFO), it is my job to be able to deliver a financial profitability and sustainability to the company and its shareholders. In order to do this, the research and development team has come up with a prototype that will change the industry and put our company in the front running of the industry. In order to sustain the company for the next two years until the product is available to be marketed to consumers, there will be an investment needed. First, there would be an unveiling ceremony and announcement about the new product, much like what Apple has done with its iPhone lineup when it started and Tesla Motors has done with their all-electric powered vehicles. Sparking interest will bring in investors that are eager to make a large return on a cheaper offering.
The initial unveiling will bring in investors that will help sustain the company for the next two years in addition to the minimal, yet positive, cash flow the company is already experiencing. Stocks would be offered, as well as dividends yearly that will help to drive in investors and keep interest. Additionally, it will create publicity for the company and possibly help spark an upward sales trend for the company's current products. "The historical record shows that investors have received a risk premium for holding risky assets.
Average returns on high-risk assets are higher than those on low-risk assets" (Brealey, R., Myers, S., & Marcus, A., 2015, p. 331). This would be considered a higher risk asset in terms of stock due to the longevity of the development of the product being two years out for consumerism. In order to keep the investors at bay and still interested, there would be periodic updates on the progress of the product's development, as well as a detailed analysis of where all invested dollars are being utilized and how they are benefitting the company now and the investor now, as well as in the future.
There would also be a large emphasis on customer satisfaction to help generate more frequent purchases and customer loyalty. "In satisfying a customer, a firm generates benefits for itself beyond the present transaction and current time period" (Gruca, T., & Rego, L., 2005, p. 115). Chik-fil-A is a prime example of customer loyalty and satisfaction. The brand message that is emulated in each location is all about customer service and making the customer happy. Thus, Chik-fil-A has seen consistent growth for many years and will continue to grow.