Notes, abstracts, papers, exams and problems of Economy

Assessing readiness to Internationalise Through:

1.Analyse organizational readiness to Internationalise: examine business strengths & weaknesses relative to International business by evaluating the key factors such as: appropriate financial And tangible resources, relevant skills and competencies, commitment by senior management to Inter. Expansion.

2. Assess the suitability of the firms products And services for foreign markets: systematic assessment of the suitability to Evaluate the degree of fit between the product or service and foreign customer Needs.

Bargaining power perspective high-control entry Mode is likely to be selected when: the host government strongly desires to Attract FDI, the MNE has little need for a local resources,

Canvas Model

Customer Segments

A company supplies products and services to one or several customer segments. Who are the customers? (Proveedores)

Value Propositions

Why should our customers buy our products (or services)? Which outstanding benefits do customers get? Do we fulfill their real needs?

Channels

Value propositions (not just products) are delivered to customers through several channels: communication, distribution, sales, etc.

Customer Relationships

What kind of long-term relationships does the company establish with the customer segment? How?

Revenue Streams (Income)

Revenue flows (i.e., money) represent the money customers would pay for the business's products or services.

Key Resources

Key resources encompass everything the company needs to... Continue reading "Understanding the Canvas Model and Marketing Plan" »

External Analysis: To detect Opportunities and Threats

Internal Analysis: To discover Strengths and Weaknesses

PEST Analysis: used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact on their business now and in the future

Political • Change to the political system very often forces business to change its approach. Economic • Changes in the market conditions, such as the presence of new competitors, or simply changes in the economy. Social • Changes in society or culture, such as demographic change, Technological • Technological innovation can force changes in production techniques

SWOT: done to try to access the CURRENT & FUTURE situation of a product, brand, business… (at the beginning... Continue reading "Strategic Analysis and Planning for Business Growth" »

Chart of Accounts

This system codifies business transactions with an account number and name. Accounts are hierarchically ordered:

• Groups (1 digit): Seven primary categories.
• Subgroups (2 digits): Subdivisions within groups.
• Accounts (3 digits): Specific items within subgroups.
• Subaccounts (4 digits): Detailed breakdown of accounts.

Group Examples:

1. Basic Financing
2. Non-Current Assets
3. Inventories
4. Trade Payables and Trade Receivables
5. Financial Accounts
6. Purchases and Expenses
7. Sales and Income

Static vs. Dynamic Financial Views

Net Worth (Static Vision)

• Economic Structure: Assets
• Financial Structure: Liabilities and Equity
• Balance Sheet: Fundamental accounting identity (end of period)

Net Income (Dynamic Vision)

• Resource Generation: Revenues
• Resource Consumption: Expenses
• Income

Relationship

Call Option Put Option

Strike < Current

In the Money Out of Money

Exchange Rate

Strike = Current

At the Money

Strike > Current

Out of Money In the Money

Licensing = Technology

Franchising = Specialized Sale or Service Strategy

Future C = Sold on Exchange

Use for Hedging & Speculating

Forward C = Sold over Counter Market

Used for Hedging – Doesn't Exist in Some Currencies

Eurobonds = Usually Issued in Bearer Form

Bought Right to Buy = Call Buyer

Bought Right to Sell = Put Buyer

Obligated to Buy = Put Writer

Obligated to Sell = Call Writer

Relative Interest Rates

Affect Exchange Rate

Capital Flows; Larger, Large Institutional Investor

Interest Rate Risk

Not Mentioned in Text International Business

(Bid/Ask)/Bid 3 to 7% Transaction Cost of Foreign... Continue reading "Understanding Options, Exchange Rates, and International Business" »

Ethical Business Conduct

T6- "Do to others as you would like them do to you". Business ethics involve describing inappropriate behaviors (taking gifts, bribing government officials, misrepresenting data, discriminatory practices, boycotting third parties). Maximization: Produce quality products at low costs. Codes: Control ethical behaviors (have employees adopt standards, write contracts that align interests, write codes of ethics, and provide training).

Financial Management

T7- Goal: Maximize shareholder wealth. Financial management in a typical corporation: Board of directors – Chief Executive Officer (CEO). The CEO oversees the (A) Chief Operating Officer (COO) and (B) Chief Financial Officer (CFO). The CFO is responsible for the (Bi) Controller... Continue reading "Business Principles: Ethics, Finance, Marketing, HR, and Operations" »

MPO: Management, Planning, and Organization

Goals

Goals are defined as the long-term strategic aims of the organization. Examples include consumer goals, product goals, operational goals, and secondary goals.

Objectives

Objectives are defined as the things a business wants to achieve in a certain time frame. Examples include business survival, maximizing profit, maximizing sales, boosting customer satisfaction, and expanding the business.

Policies

Policies are defined as the framework and structure a business works within. Examples include legal policy, human resources, health and safety policy, promotion and employment policy, and recruitment policy.

How They Contribute to Effective Management

• Goals provide a long-term look at what the company wants

International Trade:

• Comparative advantage
• Case for free trade
• Terms of trade
• Trade barriers

The Real Goods and Services Market:

• Gross Domestic Product (GDP)
• Inflation
• Unemployment
• Aggregate Demand and Aggregate Supply

Money, Banking, and the Central Bank:

• Money
• Commercial Banks

Monetary Policy:

• Purpose of monetary policy
• Main tools of monetary policy

Fiscal Policy:

• Role of government
• Discretionary vs. non-discretionary fiscal policy

Foreign Exchange Market:

• Foreign exchange rate
• Nominal vs. Real exchange rate
• Central bank intervention

Balance of Payments:

• Definition of BoP
• Main accounts of BoP

3 Sector Model of Macroeconomic Analysis:

• Purpose of 3SM
• Interconnectedness of the 3 sectors
• 3-step process of 3SM analysis

Financial Statement Analysis

Creditors, investors, management, and regulatory authorities all have a vested interest in analyzing a company's financial statements.

Purpose of Financial Statement Analysis

Creditors: Assess a company's ability to repay debt by focusing on cash flow measures.

Investors: Evaluate a company's potential for dividends, cash flow generation, and growth to make informed investment decisions.

Management: Conduct ongoing analysis of financial results, comparing them to internal operational metrics for performance evaluation.

Regulatory Authorities: Ensure compliance with accounting standards and regulations, particularly for publicly traded companies.

Methods of Financial Statement Analysis

1. Horizontal and Vertical Analysis

Horizontal

CHAPTER 14

1. Which of the following factors exacerbates the volatility in demand in industrial markets?

Professional buyers tend to act in concert.

2. Why are Japanese and German firms generally better at managing market volatility than American firms?

They value employees and stability very highly.

3. If a country has reached an economic development level where there is a focus on manufacturing of both semi durable and nondurable consumer goods and goods demanded relate to equipment and supplies to support manufacturing, which stage of Rostow's five-stage model of economic growth is the country in?

Takeoff.

4. The perception of quality rests solely with the:

customer.

5. Business-to-business marketers frequently misinterpret the concept of quality.