...“Must Finance and Strategy Clash?” “Good project evaluation considers all the relevant factors, including hard quantifying costs and benefits. It also takes into account the more neglected consequences of not investing. It recognized the value of opening up options and, by not arbitrarily restricting the time horizon of setting discount rate too high, avoids undervaluing long-term projects. Understanding project evaluation is easy. Doing it is the real challenge.” The above argument is stating that you always need to consider every possible outcome of a project. I completely agree with this statement because whether or not your project is a success or failure, you need to make sure you’ve covered every angle and eliminate the chance of surprise or uncertainty. Every angle consists of the marketing side as well as the financial side seeing as these two sides are in a constant tug of war with each other as to whether an investment is a good one or not. From the financial side, a good investment is one with a positive net present value and whose value exceeds its costs. From the marketing perspective, a good investment must pass two tests: does the product or service have enough value to enough customers to support prices and volumes that exceed the costs of capital and does the company have enough sources of sustainable competitive advantages to exploit, develop, and defend the opportunity? If correctly applied, good financial analysis complements rather then contradicts...
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...Relationship between Finance and Strategy • Finance helps align Strategy to reality, while from another angle, Financial decisions need to be aligned to Strategy and to an organization’s strategic objectives: o Finance helps measure the effectiveness of strategy by giving it metrics through which it can be evaluated on. These metrics help determine which strategy can create the most value for a certain organization; o Finance and Strategy work in tandem and in continuous cycles. Strategy is used to formulate and identify long term goals and means of achieving such goals. Finance goes on to align strategy with reality, providing metrics to evaluate its effectiveness; o Finance plays part in the Strategic decision making, as financing choices and capital raising strategies (debt vs. equity) will impact the value and the image of the firm, this is a topic of concern to the decision makers. • Both Finance and Strategy are concerned with value creation for their stakeholders whether it is the shareholders, the employees, the management etc. Strategy from a qualitative point-of-view (for instance by finding the drivers of competitive advantage for the stockholders and devising means to exert some pressure on those drivers in order to create value). While Finance is quantitative, meaning that it is a measure of the created value resulting from the strategy. This is more about determining the exact bottom line. • In a nutshell, if Strategy is about the vision...
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...Integrative Problems Para: Perry White, Editor, Daily Planet De: Reportero de negocios Re: Próximas series de las finanzas multinacionales Uno de los problemas que están confrontando las empresas internacionales en comparación con las domesticas a nivel administrativo es el riesgo de los cambios de moneda. Si las cotizaciones de los tipos de cambios entre los mercados de Londres y Nueva York no estuvieran regulados, por ejemplo, entonces una compañía pudiera obtener beneficios comprando en los mercados en donde la moneda este más barata y vender en un mercado donde la moneda sea más cara o valga más. Este tipo de estrategia de compra-venta implicaría una inversión de fondos de cero neto y no se tiene que asumir riesgo por lo que ofrece un beneficio seguro (Keown, Petty & Scott, 2005). Para prevenir este tipo de comportamiento es que existe lo que se conoce como arbitraje. Este concepto se puede definir como el proceso de comprar y vender en más de un mercado y lograr obtener una ganancia sin riesgos. Las empresas tienen varias opciones para tratar de reducir los riesgos de cambios de moneda. Por ejemplo, el arbitraje simple elimina las diferencias de tipo de cambio a través de los mercados de una única moneda, como la que existe entre Nueva York y Londres. De igual manera, existe el arbitraje triangular que hace lo mismo en todos los mercados para todas las monedas. Por último, se encuentra el arbitraje de interés cubierto que elimina las diferencias entre los...
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...Finance theory and Financial strategy Strategic Planning means several things. But it certainly is a part of the decision-making in resource management of the business benefits. Finance theory has significant advantages in understanding the function of capital markets, the valuation of real assets and financial assets. Discounted cash flow analysis(DCF) is a tool that derived from finance theory which has been widely used. However finance theory also has little effect on strategic planning and there are three differences between financial theory and strategic planning: 1. Traditional financial theory and strategic planning might have some differences in language and culture. 2. Discounted cash flow analysis might be used in an incorrect way of strategy therefore it is not acceptable in terms. 3. Discounted cash flow analysis might fail to apply a strategic, even if it is used properly. The most relevant financial concepts in strategic planning is firms’ capital investment decisions and it is also a critical component of “financial theory”. The theory is focused on cash flow and return on the investment. The tool used in investment decisions is net present valued (NPV) which was calculated from present valued minus required investment or which was reduced to discounted cash flow formula because the net present value is a matter of cash flow that will gain in the future. [pic] ...
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...(Semester 2) ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- MINHAJ UNIVERSITY LAHORE ------------------------------------------------- STRATEGIC MANAGEMENT DEFINATION: “Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives”. As the definition implies, strategic management focuses on integrating management, marketing, finance/accounting, production/operation, research and development, information system to achieve organizational success. STAGES OF STRATEGIC MANAGEMENT: The strategic management process consists of three stages: STAGE 1: Strategy Formulation: “Strategy formulation includes developing a vision and mission, identifying organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long term objectives,...
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...1 INTRODUCTION PROTON BEHARD is a Malaysian car manufacturing company that was established by the government in 1983. The objective behind the creation of the car company was to aid the attainment of the country’s goal of becoming an industrialized nation through a fortified car manufacturing industries. The country also had the intention of acquiring improved technology and industrial skills through the new manufacturing field which in turn is believed will fortify the status of Malaysia as an industrial Nation Vision The vision of proton is stated thus “to become Asia’s premier automotive brand; a brand that connects with people and provides products which become life companions”. This will be achieved through; • Ensure quality as the Number One work ethics in all operations • Establish an effective and efficient Quality System based on the requirements of ISO9001:2008 standards • Provide adequate skills and knowledge to all levels of personnel through systematic and structured training programmes • Provide a culture and environment of continuous learning, improvement and innovation towards total quality excellence • Provide a conducive, safe and healthy working environment in which people like to work and prosper. 1.1 Performance and challenges For twenty five years Proton has provided Malaysians with a number of award winning models and presently they have the largest factory in the South East Asia region with respectable statute. The company which has grown...
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...Overview of Strategic Management A Comprehensive Strategic-Management Model Strategy Evaluation Strategy Evaluation Strategy Implementation Strategy Implementation Strategy Formulation Strategy Formulation Measure and Evaluate Performance Measure and Evaluate Performance Implement Strategies – Marketing, Finance, Accounting, R&D and MIS Issues Implement Strategies – Marketing, Finance, Accounting, R&D and MIS Issues Generate, Evaluate, and Select Strategies Generate, Evaluate, and Select Strategies Implement Strategies – Management Issues Implement Strategies – Management Issues Establish Long-Term Objectives Establish Long-Term Objectives Perform Internal Audit Perform Internal Audit Perform External Audit Perform External Audit Develop Vision and Mission Statements Develop Vision and Mission Statements Strategic Management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. Develop Vision and Mission Statements A vision statement should answer the basic question, “What do we want to become?”. A clear vision statement provides the foundation for developing a comprehensive mission statement. An enduring statement of purpose that distinguishes one organization from other similar enterprises, the mission statement is a declaration of an organization’s “reason for being”. It answers the pivotal question “What is our business...
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...INBM 100’s Project International Strategic Marketing Plan This project will cover all the first semester courses of the International Business Management Program at St. Lawrence College. The students are required to form a group of three and the members should remain unchanged during the semester. Each group is required to choose a new or existing product or service offered by a company headquartered in Canada. STRUCTURE Overview of the Client Identify the various environment of the client • Business environment INBM 102 Henry summarize business and contract law in Canada describe the international regulatory framework INBM 103 Victor recognize the characteristics of a global marketplace How do you need to modify or create products and services designed for the local conditions? How can you build businesses across these global social networks? How can you build consumerism and use social networks to build markets for your products? What is the right balance of your products needed to connect with the market? How can you create the offerings and positioning to reach your youthful markets? How can you grow a large business by thinking small payments, packages, and products? How can you find opportunities in the holes in the infrastructure? How you create the technologies, or ride the technologies, to allow your business to jump with the market? How can you create the distribution networks to reach the market? Is...
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...Explain Corporate Scenarios and then describe how they can have an effect on the formulation and implementation of a firm’s strategy. Business scenarios are an imperative strategy that may be utilized preceding, and as a key info to, the improvement of the structural engineering, to determine the qualities of the Technical Architecture specifically from the abnormal state prerequisites of the business. They are utilized to recognize and comprehend business needs, and along these lines to infer the business prerequisites that the building design advancement needs to address. A business situation is basically a complete portrayal of a business issue, both in business and in building terms, which empowers singular prerequisites to be seen in...
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...Strategic Choice and Evaluation Paper University of Phoenix STR/581 Strategic Choice and Evaluation Organizational leaders and analysts develop business strategies to ensure that the organization is successful and operates to its full potential. Several factors have a significant impact on an organization’s success and its profitability. However, these factors are not solely based on finances. Some factors that will have a significant impact on the organizational strategic approach include organizational structure, organizational culture, and the leadership strategies chosen. In addition, organizational leaders and analysts seek to improve business processes and its related costs, improve customer satisfaction by improving product or service quality, and maintain a competitive advantage when compared to organizations offering the same or similar products and services. Businesses create competitive advantages when compared to its competitors because their product or service quality is highly distinguished from its competitors within the same market segment. Another factor that has a significant impact on the organization’s competitive advantage is the business’s cost structure (Pearce & Robinson, 2011). Merck & Co. is a pharmaceutical company that manufactures pharmaceutical prescription drugs for patients diagnosed with a variety of diseases. This organization is a scientific research-based organization. Therefore, to ensure the organization grows to its full...
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...Introduction Riordan Manufacturing will see growth and opportunity when utilizing the information within their strategy plan. The company is a leader in the polymer materials and has the ability to find solutions for the customers of the products. Our focus is to promote an efficient, reasonable profitability goal to promote our finances and capital is obtained for the future growth of our company. Currently, the industry leader in the R&D while leading in the industry trends identification. Our goals include improvement of employee satisfaction by 10-15%, lay ground work for share and profit gain, and reaching $50 million in operating income. Ensuring the product is environmentally safe and the best quality could help the company to become the innovative leaders in the market. We will develop a team that is focused on innovation and creation of a roadmap containing dates specific to the goals listed above. Our goal is to reduce operating costs, become partners with Kudler foods, and drive the culture to obtaining the best quality products where goals and limitations are always increasing. What role should ethical and social responsibility considerations have in Riordan’s strategic management plan? Ethics is defined as the process of evaluating problems that are within the business environment and is related to the employees, management, and corporation. Enabling a company a balance between the ethical and social responsibilities can be tough because there is a need...
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...Tesco – The Entry Strategies Content * Introduction……………………………………………………………………………….2 * Background of Tesco…………………………………………………………….......3 * Entry strategies………………………………………………………………………....4 * How did Tesco enter Hungary? ......................................................5 * Tesco’s entry strategies ……………………………………………………….…....6 * Tesco’s failure…………………………………………………………………….…..….7 * Conclusion…………………………………………………………………………….…..8 * References…………………………………………………………………………………9 Introduction Tesco is a very famous supermarket and it has stores all around the world(Clark 2008). There are a lot of entry strategies for one country to enter its brand to another country, so it is sure that Tesco and entry strategies can be combined together. This essay focused on the entry strategies that Tesco used to enter Hungary more than enter other countries. This essay introduced to you a few popular entry strategies, and explained why Tesco chose a particular entry mode to enter a country among all the possible choices. It also introduced to you what kinds of strategies Tesco had used to enter Hungary. The entry strategies do not always work, it sometimes failed. This essay also discussed Tesco’s failure, and the reason why caused Tesco’s failure. In other words, this essay is about introducing the entry strategies of Tesco. To make Tesco’s entry strategies as the topic, the first thing to do is to know Tesco very well. There are so many questions about...
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...For my research paper, I have decided to write on whether or not the use of military force is the only way to prevent terrorism. The topic also asks about the possible alternatives and what strategies would be best for American policy makers. I am going to argue that the use of military force is not the only to prevent terrorism. Although using the military for counterterrorism is effective, it is not the only way to prevent terrorism. I will argue that there are other counterterrorism methods that do not include military force. There are many keywords I used to help find scholarly sources in the Ashford University Library. Some of the words include, but are not limited to, terrorism, counterterrorism, finance, sanction, drugs, trafficking, civilian, and prevent(ion). I chose terrorism because that is the basis of the topic and counterterrorism because it is the opposite of terrorism. Counterterrorism pulled multiple techniques to fight terrorism. Also, I chose the words finance and sanction. Both words helped me find documents that provide effective methods for preventing terrorism on a government level. I needed supporting research to back up the use of foreign aid as a counterterrorism incentive. I also wanted to present the negative effects of country to country sanctions. Next, I searched for sources using civilian as an extra search criteria. Since my argument is that military force isn’t the only way to prevent terrorism, I wanted to find counterterrorism tools for...
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...examination will look at GE through a strategic lens while looking at their current practices. This author will then include a summary of the findings conducted through research, and also suggestions for improvement. Strategic Planning General Electric (GE) is an organization that has over 130 years of experience. It was started by the famed Thomas Edison. Since its inception GE, as a company, is now comprised of a diverse, global infrastructure which operates in many types of sectors. These sectors include; finance, media, energy and a wide range of other offerings. Each year the leaders of each of these particular division lines meet to discuss the outlook and strategy for the upcoming fiscal year. These sessions can last as long as three to four weeks and are typically done outside of corporate headquarters. In order to prepare for the strategy sessions, each of the senior leaders must diagnose their existing business portfolio to access how their current, and former, strategy resulted. This helps the organization and the specific business unit, decide whether to inject...
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...A business strategy is concerned with major resource issues e.g. raising the finance to build a new factory or plant. Strategies are also concerned with deciding on what products to allocate major resources to - for example when Coca-Cola launched Pooh Roo Juice in this country. Strategies are concerned with the scope of a business' activities i.e. what and where they produce. For example, BIC's scope is focused on three main product areas - lighters, pens, and razors, and they have developed super factories in key geographical locations to produce these items. Two main categories of strategies can be identified: 1. Generic (general) strategies, and 2. Competitive strategies. The main types of generic strategies that organisations can pursue are: 1. Growth i.e. the expansion of the company to purchase new assets, including new businesses, and to develop new products. The Inland Revenue has expanded from being just a tax collector, to other functions such as collecting student loan repayments and paying tax credits. 2. Internationalisation/globalisation i.e. moving operations into more and more countries. For example companies like Gillette, Coca-Cola, Kellogg's, and Cadbury Schweppes are major multinationals with operations across the globe. 3. Retrenchment involves cutting back to focus on your best lines. The Americans refer to this as 'sticking to the knitting' - i.e. concentrating on what you do best. Competitive advantage Competitive strategies are also important...
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