Case Study On Maslow's Hierarchy Of Needs

1. In the context of CAPM, discuss the risk/expected return profile of industries specializing in each of the 5 levels of Maslow's Hierarchy of Needs. Provide examples of industries that fall within each level.

CAPM as a model determines and evaluates estimated expected return relative to risk. The vast applicability of this model in terms of risk-investment would follow to the demand or the level of necessity the market could have. Since the goal of every investor is to achieve the optimal return on the invested capital with a reduced risk of losing it, decisions, which can be considered as non-systematic risk using the tool, would always be a great factor to the success or loss of any investment. Moreover, the data is statistically measured

As defined by Maslow in his model, this stage is the foundation for someone to desire greater to achieve with his goals in life. Food chains, e.g McDonalds Corporation, franchising at this industry would create multiple competitions since several other companies offer the same line of products. But still supply can cater the demand. Risk for them is relatively negligible since it’s the consumer’s taste and preference that matters affected by their marketing materials or so branding. The assurance that return on investment for this kind of business is achievable, risk is considerably small thus investors are willing to buy stocks at high

How can you apply the CAPM model to Strategy, Marketing and HR?

Strategy. First, the CAPM idea on taking risk or not for every investment would be a help if one must understand the formula itself. Investors would invest if they can assure the stability of CAPM. Cost of capital in connection to the capital budgeting using Net Present Value for any projected project or investment would be a factor for any successful industry with long-term goals and strategic design.

Marketing. As the job entails, the purpose is to promote and attract more investors. If return is equal or greater than the required return compensating to the risk and time value of the money, then, investors would easily invest on any industry or business. It could be connected with the strategy since it is with the company’s way on how to gain or increase profitability by widening its market through expansion, branding, etc.

Human Resource. In HR, the risk is on hiring people and compensating their needs. Investors believe that the higher the risk, the higher the rate of return to their invested capital. It is with the HR to hire highly skilled workers but will be handling greater amount of expenditure, risk, or lost for instance or average worker with lesser expense and lesser risk. Moreover, the increase in commodities consumed by the employees and time value of money affects the decision of HR that’s why CPAM is used as a tool for them to validate data in accordance to accepting and rejecting