...Description of MyVideoTalk Dr. Craig Maddron BUS 521: Entrepreneurship and Innovation April 24, 2011 Description of MyVideoTalk Hisrich, Peters and Shepherd (2010) define an entrepreneur as “an individual who takes initiative to bundle resources in innovative ways and is willing to bear the risk and/or uncertainty to act” (p. 6). An entrepreneur’s objective is to create a business opportunity for profit. An entrepreneur must identify and evaluate the opportunity, develop a business plan, determine the resources required, and manage the enterprise (Hisrich, Peters, & Shepherd, 2010). The purpose of this paper is to describe a new business venture, MyVideoTalk. This paper will introduce MyVideoTalk, discuss the market opportunity for MyVideoTalk, and discuss the market entry strategy to a foreign or domestic market for MyVideoTalk. The paper will also discuss the strategies for minimizing personal risk with MyVideoTalk. Introduction of MyVideoTalk The act of introducing a new business venture and its product and/or service is to unveil, debut, or launch it and summarize its purpose. MyVideoTalk is a division of Team Effort International, LLC. Team Effort International, LLC is a privately held, debt-free company with global offices in San Ramon, CA – USA, Northern India, Southern India, Dubai, and the Philippines. Team Effort International, LLC was founded in October 2002 by entrepreneurs, Mel and Amie Gill and the MyVideoTalk (MVT) division was created in April...
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...+ .8(3%) = 4.2% 10% Question 2 Yes triangular arbitrage is possible. The appropriate cross exchange rate should be 1 Canadian dollar = 3 New Zealand dollars. Thus, the actual value of the Canadian dollars in terms of New Zealand dollars is more than what it should be. One could obtain Canadian dollars with U.S. dollars, sell the Canadian dollars for New Zealand dollars and then exchange New Zealand dollars for U.S. dollars. With $1,000,000, this strategy would generate $1,006,667 thereby representing a profit of $6,667. [$1,000,000/$.90 = C$1,111,111 × 3.02 = NZ$3,355,556 × $.30 = $1,006,667] Question 3 If the firm uses a forward hedge, it will receive 400,000($1.50) = $600,000 in 180 days. If the firm uses a money market hedge, it will borrow (400,000/$1.09) = 366,972 pounds, to be converted to U.S. dollars and invested in the U.S. The 400,000 pounds received in 180 days will pay off this loan. The 366,972 pounds borrowed convert to about $543,119 (computed as 366,972 × $1.48), which when invested at 8% interest will accumulate to be worth about $586,569. In comparison, the firm...
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...study. The report is concerned with analyzing the investment environment of the host nation, maximizing the investment return and minimizing the risks which could have a negative impact on the financial performance of the Ruritanian project. Firstly, the national economy environment will be discussed based on the national GDP growth and inflation rate; secondly, there is a discussion on the foreign exchange risks of Rutitania Crown against international currency; third, the issue of joining the Euro zone will be analyzed in terms of benefits and drawbacks; next, the taxation effect in the investment decision making will be accessed and finally there will be a discussion on the political environment. THE NATIONAL ECONOMY AND THE IMPLICATIONS FOR THE PROJECT 2.1 The Relationship between National Economy and the Foreign Direct Investment (FDI) The economic growth of the host nation has always had a positive relationship with the foreign direct investment decision making. The positive effect of host country economic growth on investment decision making has been supported by various studies (Ericsson and Irandoust, 2000; Dhakal, Kamal and Upadhyaya, 2007; Barrell and Pain, 1996; Grosse and Trevino, 1996; Taylor and Sarno, 1999; Trevino et al., 2002). Traditionally the economic growth of the host nation induces FDI inflow when FDI is seeking consumer markets, or when the economic growth leads to greater economies of scale and, increased cost efficiency of the project. The FDI is more...
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...Honeywell, Inc. and Integrated Risk Management Case Analysis Submitted to: Prof. A. Kanagaraj By Vivek Gupta Section C, 944 Executive Summary: Honeywell was a multibillion-dollar, International Corporation employing 53000 people and managing operations in 95 countries. It was the largest producer of control systems and products used to regulate heating and air conditioning in commercial buildings and of systems in avionics systems. Carrying out business in 95 countries firm faced a number of risks. Honeywell’s risk management activities were dispersed throughout the firm as shown in the table. Other risks were managed operationally. [pic] The committee voting for this new program depends on whether the anticipated savings of the program would be realized, and whether the coverage provided by the new contract would be adequate. The proposed plan is a first step in a firm wide integrated risk management program that would extend to cover all of Honeywell’s financial and operational risks, the finance committee’s decision would establish Honeywell’s risk management strategy for some years to come. Honeywell’s existing strategy was consistent with its risk management objective of minimizing earnings volatility and its cost of risk. The team wondered about the applicability of the relatively new concept of enterprise risk management, which is grouping many risks together into a portfolio of risks, rather than managing each risk separately. The team thought...
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...1. Introduce the company and the product/service idea for the new venture. Heat Seekers Inc. is about to launch a new innovative product to consumers in various markets called the ESU coat. Consumer needs, taste, disposable income, and preferences are the standard drivers for continued advancements in the 21st Century. Technological advancements create windows of opportunity for an entrepreneur to accommodate the needs of the consumer. A venture “provides a complete overview of the product(s), service(s), and operations of a new innovation” (Hisrich, Peters, & Shepherd, 2010). We have advanced from campfires, wood burning stoves, hot water bottles, heating blankets, and the utilization of natural resources to heat our inhabitance, to now the technological development of solar powered green energy heating sources. Despite the advancements in technology the dilemma associated with personal on the go heated comfort are an under developed niche. The ESU coat gets even better; from a health perspective the ESU coat can also help to aid people who have poor blood circulation in the body. The ESU coat is a great quality product unlike no other currently offered by existing competitors which will sustain constant growth in a global market. It is a solar energized eco friendly coat with a personal temperature gauge control to adjust the degree of heat emitted. It does not require any batteries, plugs, or adaptors. It is insulated, portable, hypo allergenic, flame and water...
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...part of the foreign exchange risk in doing international business. Future payments or distributions that are payable in foreign currency carry the risk that the foreign currency will depreciate in value before the foreign currency payment is received and is exchanged into US dollars. (Kelley, 2001) Billabong relied solely on the foreign exchange market. US had 50 percent of the company’s annual sales. When the US dollar gets stronger against the Australian dollar, their product becomes less expensive in the US. When the Australian dollar dropped $0.60 Australian/ $1 US “the Billabong’s products become less expensive in US dollars, and this drives sales forward”. (Hill, 2015, p. 319) Due to the anxiety many institutions sold Australian dollars, which ultimately drove down their value on foreign exchange markets. From the sales the US dollars were exchanged back into Australian dollars, the US dollar value increased “as the Australian dollar fell”. (Hill, 2015, p 319) When the Australian dollars lower, it makes exports more affordable to oversea buyers. In essence the low value of Australian dollar equals sales driving forward. 2. Could the rise in the value of the Australian dollar that occurred in 2009 have been predicted? As stated in the text (Hill, 2015) “what happens in the foreign exchange market can have a fundamental impact on the sales, profits, and strategy of an enterprise”. It is a key criterion for managers to understand the foreign exchange market, and what...
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...affected employees. These measures will eliminate jobs in the United States. In turn those jobs will be outsourced to foreign labor sources in India and Ireland where the labor is highly skilled and cost efficient. The management team failed to utilize the union as a powerful support system in broadcasting the lay-off announcement. Due to Global Communication’s lack of communication with the union, management now faces a potentially volatile situation. Damage control measures need to be identified, evaluated and analyzed in order to minimize the negative impact that the union will have on customers, employee morale and the general public. Situation Analysis Issue and Opportunity Identification Global Communication’s management team had a difficult decision to make in order for the company to survive the advancing telecommunication market. The management team devised a growth strategy which required the introduction of new services into the domestic market and expansion into the global markets through a partnership with an international satellite provider. The strategy called for aggressive cost-cutting measures which would result in the United States technical support center closing down and employee lay-offs. The company would outsource the technical support center services to foreign companies located in India and Ireland. The foreign labor source offered a highly trained technical support team at a more reasonable cost. Informing employees about...
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...this factory tour business would be electronics, oriental rugs, computer direct factories, and the list goes on. Factory Tours can be a home based operated business and can also be operated part-time. The estimated start-up cost can range from $10,000 to $50,000 (Entrepreneur). Factory tours have been around for centuries and the industry is growing. Many tourists have enjoyed touring tire factories, potato chip factories, coffee plantations as well as coal mines. With the strong work ethics in America, vacations are not being taken as much as in the past. With factory tours many individuals can take a vacation, learn about the many different industries, and enjoy themselves all at the same time. 2. Discuss the market opportunity for the product/service. The market focus will be tourists from other cities and/or regions. In many small communities and even some larger cities, there are not as many...
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...Introduction Business continuously expands into global organizations finding it necessary to pay close attention to the foreign exchange market. These companies must follow the foreign exchange market closely and should develop appropriate hedging strategies to protect them. Exchange rate risk is the unexpected exchange rate that may cause an organization to lose or gain income. Currency hedging is a method of minimizing the exchange financial rate risk within an international organization. Global Companies involved in operations should have good understanding of the financial risks that the company could go through prior to starting its venture. Exchange Rate Mechanisms Currency hedging is “a particular hedging strategy used to reduce risks in the foreign exchange market which are used as in any hedging situation, where one security would be offset by another security, such as holding a short and long position of the same security at the same time, (Investor Words, 2009).”This content can be found on the following page:http://www.investorwords.com/6779/ Is impossible to predict how much the currency will be worth on the exact day that company will be converting it. With hedging, the uncertainly is gone. When companies decide to expand their business into growing globally the company will have to deal with many new issues that would not have affected them if they would have continued doing business locally. The exchange rate is a very important factor when doing international...
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...Investing in foreign securities, while a good thing for your long-term portfolio, continues to pose new threats for investors. As more people broaden their investment universe by expanding into foreign stocks and bonds, they must also bear the risk associated with fluctuations in exchange rates. Fluctuations in these currency values, whether the home currency or the foreign currency, can either enhance or reduce the returns associated with foreign investments. Currency plays a significant role in investing; read on to uncover potential strategies that might downplay its effects. Pros of Foreign Diversification There is simply no doubting the benefits of owning foreign securities in your portfolio. After all, modern portfolio theory (MPT) has established that the world's markets do not move in lockstep and that by mixing asset classes with low correlation to one another in the appropriate proportions, risk can be reduced at the portfolio level, despite the presence of volatile underlying securities. As a refresher, correlation coefficients range between -1 and +1. Anything less than perfect positive correlation (+1) is considered a good diversifier. The correlation matrix depicted below demonstrates the low correlation of foreign securities against domestic positions. Monthly Correlations 1988 to 2006 Security Type S&P 500 Index Russell 2000 Index Russell 2000 Value MSCI EAFE International Small Cap International Small Cap Value MSCI Emerging Markets S&P 500 1...
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...Culture 1. Introduction to Culture 2. How culture affects managerial approaches 3. Trompenaar’s Cultural Dimensions 4. Geert Hofstede’s Cultural Dimensions 5. Cultural challenges when entering a new market 6. Pros and Cons of entering a new market with an adapted/standardized product 7. Characteristics of culture 8. Conclusion 9. Values in Culture 10. Value Similarities and Differences across cultures Introduction to Culture There is no doubt that the international marketing process do face a large set of variables as it take place over different countries and it does act in different environments. One of the most determinant environments to the success of the international marketing process is Culture, which hold the reason for many human acts and behavior. Reaching to that point international marketer should study deeply culture treaties of a country the company is planning to act in. so that special amendments in the organization overall plans and actions is made to act in accordance with the new market variables The role of culture in international business and marketing Culture is a distinctive element of international marketing. While factors besides culture are present, culture could be a key determinant of most overseas relationships. Researchers agree that exchange processes within business networks can only be understood by conducting studies in different countries and cultures. For example, studies...
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...2014 Dean’s day (no classes, building closed): April 18, 2014 (Friday) Rector’s day (no classes, building closed): May 14, 2014 (Wednesday) Objective: The aim of this course is to provide an integrated view of international financial markets and the management of multinational firms. The focus will be on money, liquidity, the international payment mechanism, the markets for spot exchange, understanding forward exchange rates, using forwards for international financial management, and capital budgeting. We will discuss managing exposure to exchange rates and country risk, and financing in international capital markets. Required reading: a) The most important will be your class notes from lectures. b) Sercu, Piet (2009). International Finance: Theory into Practice, Princeton University presss. (available ONLINE and also in our library) Focus on chapters: 1, 2, 3, 4, 5, 12, 13 and 21. Guest Speaker: (from the Czech National Bank) 1 Tentative Content: 1) Introduction and Motivation for International Finance – course outline, key issues in the international business finance. 2) Institutional Background – money, liquidity, central banking, the international payment mechanism, balance of payments, exchange rate regimes. 3) Spot Markets for Foreign...
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...changes in the global market environment. The United States has significantly transformed from being a manufacturing powerhouse as it now relies on importation of raw materials from other countries with upcoming markets. United States lost its self-sufficiency that it had in the past century especially during the Industrial Revolution. The integration of foreign made goods have made it easy for foreign workers to manoeuvre in different opportunities and pursue their American dreams because they are familiar with the goods thus making their work environments conducive (Weidenbaum, 2005). Moreover, this changed the perception held by majority of foreigners that United States is a melting pot of immigrants. These foreign workers take advantage of their knowledge about imported goods to penetrate the American markets further with the motive of advancing their skills and attract better wages and opportunities as a result. Unremitting importation of foreign made goods has affected American workers both positively and negatively. On the positive side, they get to learn new ideologies about manufacturing and global markets from the upcoming superpowers such as...
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...Final Project Melissa M Bigler A) Give an example of how one might reduce your exposure to a risk that is systematic to the US economy? Minimizing risk while retaining upside potential is key for most investors , that is why a number of traders and investors are diversifying and hedging with currency, currencies benefit from some of the same things that may hurt stock indexes, bonds or commodities and can be a great way to diversify a portfolio. Investing in foreign currency is mutually beneficial. Investor are exposed to two types of risk: idiosyncratic risk and systemic risk. Idiosyncratic risk is the risk that an individual stock's price will fall, causing you to accumulate massive losses on that stock. Taking this risk out of your portfolio is easy, just diversify your account across a broad range of stocks or stock-based ETFs, in turn reducing your exposure to a particular stock. Though diversifying across a broad range of stocks only addresses idiosyncratic risk. You still have to face the systemic risk. That risk , is the risk based on the whole stock market failing, the way to fix this problem is to minimize your portfolios exposure to a bear market by the use of a forex account, using the forex account to trade from while simultaneously managing your stocks. http://www.investopedia.com. B) Why is corporate finance important to all managers and discuss their primary objective. Corporate finance is a type of finance dealing with monetary decisions...
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...and taxes, all of which have a direct impact on doing business. In international business, the government effects business viability. For instance, international business transactions face more taxes than domestic businesses; they also have quantitative restrictions and licenses’. Governments also impact international businesses by establishing importing and exporting policies. There are other aspects in which governments play an important role in international business like infrastructure, law and order and minimizing risks. Economic integration has been one of the main economic developments affecting world markets since World War II. Economic integration refers to trade unification between different states by the partial or full abolishing of customs tariffs on trade taking place with the borders of each state. The intent is to lower prices for consumers and distributors. There are five levels of economic integration, free trade area, customs union, common market, economic union and political union. Free trade area is the least restraining and liberated form of economic integration, which eliminates barriers among trading countries. Free trade is typically formed for...
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