Finance and Strategic Management | Report

Running Head: FINANCE AND STRATEGIC MANAGEMENT
FINANCE AND STRATEGIC MANAGEMENT
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FINANCE AND STRATEGIC MANAGEMENT
Introduction
The paper will focus on the Interim performance of Kerry Group Company which is
situated in Ireland. The strategic and financial management activity of the business will be
discussed in this paper. The issues related to strategic and financial management of the group
has also discussed in this paper. The main objective of this paper is to evaluate the strategic
and financial issues the public related company is facing in its business.
Background of the Company
Kerry Group is a type of food industry that is headquartered in Ireland. It is a public
company that is traded on London Stock Exchange & Euronext Dublin. The main products of
the company is all type of food ingredients, flavours, snacks, cooked meats, juices, dairy
product and sausages. It is a global trading company and is considered as one of the leading
food processor company in the European leader. The company was owned by three
shareholders, they are Diary Disposal Company, Erie Casein Company & Federation of
cooperatives of farmers.
Financial Management
Financial Management is all the financial activities of an organisation, starting from
planning to controlling of the financial activities. This involves all the activities to manage
the financial resources of the company. From its Interim Management Report, it is found that
the Kerry Group has continued in expanding the growth of the business. The company is
focused on doing unique & leading business in the developed markets. The performance of
the group has been increased by 10.7% in the financial year 2019 (Kerrygroup.com, 2020).
This reflects a good growth in the operating leverage of the business. The business is able to
compete with the challenges in the market, the consumers are demanding more and hence, the

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business is able to change its business model. The interim dividend of the company has also
been increased at 11.9 % as compared to the FY 2018.
Issues in Financial Management
 Problem in pricing- The Company uses pricing model to determine the price of the
raw material, tis pricing can negatively depend on the price of the raw materials. The
price of raw materials moves up and down. The pricing model has been used to deal
with the fluctuation in raw materials. This price fluctuation is due to continuous
change of market environment of the business. Hence, the company face difficulty in
building its purchasing strategy. The company has issues related to shortage of raw
material resources (Eng & Vichitsarawong, 2017). This will affect their consumption
rates. Hence, this public sector company faces problem in fixing the price of their raw
materials for the production process. The company is facing financial problems due to
this pricing strategy.
 Poor management- Kerry group has continued the business acquisitions &divestitures
in order to expand the business. The company is facing issues in anticipating the
benefits that could be benefited from these companies. They are unable to accurately
evaluate the transactions related to shareholders value. This has resulted in poor
management of the business transactions. Inaccurate evaluation results in over
estimation of the expected financial results. The company faces poor planning of the
financial transactions.
 Operational risk- Kerry group faces issues in their business operations. This will
affect the business profitability margin. The company is facing this type of financial
issues for to fluctuation of input costs. Energy, commodities and labours. This is due
to many factors like demand & supply and changes in financial regulations
(Kerrygroup.com, 2020). The current inflation rate of the environment & high level of

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competition has affect the profitability margin of the group. This has resulted in issues
in the financial resources and negatively affected the financial activities of the group.
Operational risk is also related to health and safety risk that the company is facing the
issues. They are unable to properly make organisational compliance for these type of
health and security risk.
 Failure in efficient tax information- The Kerry group has expanded its business all
across the global. Hence, they are exposed to a very complex tax environment. The
company is dealing with change in various tax audits and has to transfer their pricing
judgements to the business (Albrecht, Kim & Lee, 2020). This has resulted in issues
related to the tax liability of the business. They are unable to gather accurate &
appropriate tax information. This affects their tax liabilities and the financial
compliance of the business. The company is facing many such tax consequences in
the business. The company is facing issues in meeting its targeted revenue margin and
this is considered as the most threatened issue for the business.
 Issues in meeting the liquidity requirements- The Company is unable to meet its
business debt. They are unable to meet the debts that is related to long-term maturity
of the business loans. The cash is not properly managed in the business operations.
This indicates that the company has a poor liquidity position. They are unable to
borrow more loans or debts for the business. Since, the financial position is related to
company’s liquidity position and borrowing facilities, this means that the company is
facing issues in effective management of the financial resources.
 Issues in foreign exchange- The global expansion of the business has also resulted in
various financial risks like foreign exchanges risks, risk in interest rate and
counterparty risk (Pandey, 2017). This type of global risk has affected the liquidity
position of the business. Hence the treasury portion of the business is affected. Other