Global Finance Strategy - PDF

Added on -2020-12-09

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Strategy and Global Finance
INTRODUCTIONGlobal finance is a system which helps an organization to successfully run its business intheir respective industry or sector. This process helps in investing globally for the business tomake improvement and to expand it as well. Present report will study about Electro-Tech which was formed in 2008. It is atelecommunication company and one of the world’s leading suppliers. Electro-Tech employs21,000 people across 80 countries. Electro-Tech’s mission is to place world-widetelecommunications to every business. This report will discuss about the concept of globalizationand investment approaches. It will also explain about the global issues which can affect theirbusiness activity. In the second part of this report, this study will explain about the appropriate finance foran organization which can be use in investment appraisal techniques. It will also focus ondifferent aspects of financial risk management as well. Other factors, such as, techniques for riskrecording and monitoring and applied strategies and techniques to mitigate particular businessrisks will also be discussed in this report. This assessment will describe the financial statementswhich is being used in the identification of organization's financial viability receptively. Lastly itis explaining the current financial status of company and also recommending suitable strategiesas well.MAIN BODYTASK 11(a) Concept of globalization is linked to investment approachesGlobalization has a huge impact on the business activity of any organization. Thisprocess has helped in exchange of markets and products around the world. This process assistinvestor to approach new investing opportunities and to evaluate fresh markets at a greaterdistance which can be very useful for the organization (Lasserre, 2017). This process hasincreased the rate of international investing as well. Globalization induce connected economiesin order to proceed to invest in their economic health and take new profits. For Electro-Tech andother global companies, like, Verizon Communications Inc., Softbank Group Corporation, etc.can have a huge benefit of globalization. This will help them in investing globally for theirbusiness in order to increase their productivity and sales. Due to this investment, it will alsoassist in them in getting new opportunities as well (Masciandaro, 2017). 1
2(b) Evaluating different approaches to investmentThere are various approaches which can be used by any organization in order to improvetheir business activity, such as, income investing and growth investing. These approaches arevery beneficiary for Electro-Tech and other global company, for example, VerizonCommunications Inc. (Grishunin and Suloeva, 2015). Income Investing Approach: This strategy helps in generating income from their investment fororganization in the form of dividends, interest or capital gains (Sassen, 2016). Income investingcan be cite to a scheme of buying shares in a company that pays dividends. The generatedincome can be calculated by following formula:Dividend Yield=Annual Dividends Per SharePrice Per ShareIncome investing strategy aid to find top-grade companies with the highest dividend yieldwhich can be useful for Electro-Tech to invest for their business activity.Growth Investing approach: This is another style or process of investment which can be usedby these organizations to invest for their business. In growth investing method. It mainly focusesin increase in growth of an investor's capital (Sassen, 2018). This type of approach basicallyinvests in the growth shares whose income or earnings are expected to increase in market. Thisprocess is very helpful in evaluating company's potential for growth and invest in markets. Thisapproach focuses on earning growth of companies in which they are investing their money whichhelps in reducing the impact of loss. TASK 2 1(a) Two contrasting global business environment factorsGlobal business environment factors are those component which can affect theirfunctionality externally.There are various global factors which can influence their business, suchas, legal, political, social, technological and economic.Analysing these component is veryessential for any enterprise to run it successfully in industry(Giddens, 2018). Two main factorswhich has a huge impact are as follows:2
Economic Factors: These constituent basically include all the economic element whichchanges globally. There are various factors such as, rise in living standards whichultimately increases the demand of products efficiently which helps in increasing theirproductivity and sales (Sapolsky and, 2018). Other factors include, increase in theinterest rate, wages, rise in inflation rate etc. all these can affect their overall businessactivity.Technological factors: For any business technological factors plays an important role inenhancing their performance. This aid the enterprise to cut down the costs and createnew products. Having new and improved technology can help an organization to providethe best products and services to their customers which will ultimately increase their salesand brand value as well (Grishunin and Suloeva, 2016). Technology helps enterprise toincrease competing benefit and is a major driver of globalization.2(b) Evaluating the impact of each factor on Electro-Tech operationsElectro-Tech working in a telecommunication industry, it is very essential for them tomanage the impact of global business environment factors on their business activity effectively(Scott and Zachariadis, 2017). Economic and technological factors have a huge impact on theirbusiness, such as:Economic Impact: In this factor, it is very crucial for Electro Tech to properly manage theirsystem according this. Increase in the interest rate can affect their overall business's sales andproductivity (Guo and, 2018). Rise in living standards also affects them, such as, itincreases demand for their products and services, which thereby, provides them greateropportunities for businesses to make profits.Technological Impact: Working in a telecommunication industry it becomes evident for them tohave all the latest and new technology which can aid them in improving their existing servicesand to bring some new products as well. With the advent of modern communicationtechnologies, technological factors have gained great impetus in the business arena (Ghezzi,Cortimiglia and Frank, 2015).3

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