Professional Management Report Assignment

PROFESSIONAL
MANAGEMENT REPORT

Table of Contents
INTRODUCTION ..........................................................................................................................3
Identify the external threats and opportunities or challenges the firm has to face with wider
macro and micro environment ...................................................................................................3
Identify and evaluate possible merger or acquisition targets that helps in mitigating threats and
exploiting opportunities..............................................................................................................6
Critically evaluate the strategic choices which are generated from the research and analysis
through application of theories ...................................................................................................7
RECOMMENDATION ..................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
A Professional management is defined as the learning for earning and maintaining
professional credentials like academic degrees to formal coursework or attending conferences or
informal opportunities which are placed in practise. The professional management report in a
business is defined as the report that consists of various strategies and planning that a firm will
make for competing in market. The planning and strategic management of firm is important for
success of any business. In the following report the company which is considered is Cortina
Holdings Ltd which is an organisation of Singapore founded in the year 1972. This is an
investment holding company that is involved in retail and distribution of timepieces and
accessories in Singapore, Thailand, Indonesia, Hong Kong, Russia, Taiwan, etc. This company
operates through wholesale and retail segment. The wholesale segment of this company is
associated with time pieces and luxury branded accessories. The retail segment of this company
is associated with branded pens, luxury accessories, etc.
Identify the external threats and opportunities or challenges the firm has to face with wider
macro and micro environment
Cortina Holdings Limited is a Singapore company which is involved in retail and
distribution sector and it has been working successfully in various countries. A PESTEL analysis
is required by every organisation to know what are the problems that can be faced by this
organisation while operating in different countries (Thompson, and McLarney, 2017). The
PESTLE analysis is a framework used for identifying the threats and weaknesses that are used in
SWOT analysis. The PESTEL analysis of Cortina Holdings Ltd. is mentioned below –
Political factor – These are those factors by which a company knows how a government
intervenes in the economy. The various government rules that have to be followed by Cortina
Holdings Limited are Tax policy, trade restrictions, environmental laws, overseas markets,
foreign trade policy, etc.
Economical factor – The economic factors plays a significant role in profitability of the
organisation. In context of Cortina Private limited it is advisable that as this company is related
to retailing products like pen, luxury accessories and time processes. While operating in Taiwan,
Thailand, Hong Kong, Russia it is important for this company to consider economical concepts
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like interest rates, exchange rates, inflation, disposable income of consumers, economic growth
of the country, etc.
Social factor – The social factors are those which affects the nature of customers in
purchasing product of the company. Cortina Holding limited has to do a good analysis of social
needs and demands of the customer for providing them quality products like pen, luxurious
accessories, etc. Different countries have socio cultural factors including beliefs and attitude of
population.
Technological factor – Cortina Holding Limited must use latest technology gadgets and
processes for processing in new countries as well as existing countries (Salar, and Salar, 2014).
This company must analyse new ways for producing goods and services, distributing goods and
services and communicating with target markets.
Environmental factor – These factors includes availability of raw material in the area
where operations of company takes place, pollution targets, doing business ethically and
following political and environment rule at the same time.
Legal factor – The various legal factors that affect business are equal opportunity, health
and safety rules, consumer right law, consumer protection law, product safety, etc. Cortina
Holding Limited is operating globally and thus it is important for this company to adopt rules
and regulations of various countries and avoid issues and conflicts.
Analyse existing brand portfolio of the company and identify potential opportunities for
divestment of brand for minimising existing potential future weakness
Cortina Holding Limited is an investment company that is an investment organisation
that provides management services to associates and subsidiaries. This company is dealing in
two segments including retails and wholesale. The retailing sector is involved in wholesale of
branded accessories and subsidiaries. On the other hand, the retail sector of this company is
involved in retailing of branded pens, time pieces and branded accessories. The subsidiaries of
this company are Chronoswiss Asia Pvt Ltd., Cortina watch HK Ltd., Cortina Watch
(IndoChina) Ltd. and Pacific Time Pt. Ltd. The Chronoswiss Asia Pvt Ltd. is the most profitable
business of Cortina Company.
Divestment is defined as the process of selling of subsidiary assets, investments of
divisions for maximising the value of parent company. The Cortina Holding company can use
divestment for fulfilling financial or social goals of the company. In context of Cortina Holding
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Limited company, this is involved in retail and distribution sector and it wants to make more
money and profits by choosing the strategy of divestment (Sadgrove, 2016). Cortina Holding
company must analyse its business while adopting this strategy and it has to apply the following
steps –
 Analyse the balance sheet of the company and know about asset of the company.
 A break even analysis is important as it will help in getting information related to assets,
products and locations of the company.
 Product life cycle is the process which includes several stages of product growth such as
growth, maturity, and decline. A profitability ratio analysis of specific product or parts of business will be helpful in
analysing profitability of business, when the gross profit margin is high then it is god for
the company.
SWOT analysis of Cortina Holdings Limited
Strength Weakness
 This company operates in store
speciality retail stores and distributes
various luxurious watches and items.
 Cortina has around 20 outlets
including 15 multibrand stores, 3
Patek Phillippe Boutiques and 2
Rolex Boutiques located in
Singapore, Malaysia, Thailand,
Singapore, Taiwan, etc.
 The retailing sector of this company
includes various brands like Gucci,
Cartier, Corum, Blancpain,
Chronoswiss, etc.
 The major weakness of this brand is
that it is not easy to handle retailing
of luxurious brands in different
countries.
 Cortina Holding Limited is having
high competition in market and this
affects profits of the company.
Opportunity Threat
 This brand is a private limited
company but it has presence in
 Brand witching is the greatest threat
to this company.
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International level so this is an
opportunity for the company to
capture market of different countries.
 This brand is operating in many
countries and thus it can grow and
develop easily in any country as it has
opportunity for operating in multiple
markets.
 There are several competitors in
market which are dealing in same
sector.
Identify and evaluate possible merger or acquisition targets that helps in mitigating threats and
exploiting opportunities
Mergers and acquisition are used as an instrument for growth and these are becoming an
effective tool in a business strategy (Mazzarol, 2015). These are used in different range of
sectors including information technology, business processes, telecommunications and
traditional businesses. The mergers and acquisition in Cortina Holding Limited will help in
gaining strength of business, expanding customer base, cutting competition and entering into a
new market or product segment. A merger includes several steps including preplanning,
planning, implementation and evaluation. The merger of Cortina Holding Limited depends upon
swapping or the sharing of exchange ratio rate of a merger and acquisition. Swap ratio is defined
as the ratio by which the company will offer its own shares in exchange of shares of target
company. Mergers and acquisition helps in increasing the share price of merged company in the
long run. If the merger is not done successfully then it may lead to decrease the stock price of
merger entity. There are several benefits which Cortina Holding company can have by mergers
and acquisitions and these are listed below -
Greater value of generation – Cortina Holding company is involved in retailing of
luxurious and high quality brands. If this company undergoes merger and acquisition, then it the
main benefit this company will have is increase in value generation. Also the value of
shareholder increases as compared to the parent company.
Benefit in tax gain – The major benefit of merger and acquisition in Cortina Holding
Limited is the tax gain and enhancement of revenue using market share. In market, joint
companies get more value than single enterprise.
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Good for improving current position of company – Cortina Holding company is facing
some financial or business issue then the best think for improving business is merger and
acquisition. A company which is acquiring some other company will need to have a strong hold
in market. This helps in dealing while buying weak firms under the cost effective deal (Gavalas,
and Syriopoulos, 2014). This is advantageous for both acquiring company and loss making and
getting into a new strategy.
Cost Efficiency – This is another benefit to a company by Merger and acquisition. This
helps in increasing the economies of scale and this generates good cost efficiency (Ferreira
Rebelo, Silva and Santos, 2017). When Cortina Holding company will merge with another
company then, production will take place in a more effective manner and this increases the
output production and cost per product is decreased.
Critically evaluate the strategic choices which are generated from the research and analysis
through application of theories
NPV theory - The net present value is the difference between present value of cash
inflow and present cash outflow over a period of time. The NPV is used in capital budgeting and
investment planning for analysing the profitability of the projected investment. If there is a
positive net present value in a company, then the projected earnings are generated by a project or
investment. An investment with a positive NPV is more profitable and an investment with a
negative NPV is a loss for business. It is essential for Cortina Holdings limited to calculate the
NPV as money which is present with the company today is worth more than the money it will be
having after few years. the NPV calculation of the company will help in estimating the amount
of money that can be invested by company for making more profits. Cortina Holding company
has to evaluate the net present value and this will help investors to know the value of money they
can make by investing in the organisation.
Safe Theory – It is important for the company to run business without any risks for
remaining successful in market (Council, 2014.). In context of Cortina holding company, it is
advisable that it has to always ensure that this company is investing money in right direction and
increasing profits for the company. According to the safe theory, it can be said that various
organisations face strategic, preventable and external threat which is managed by transferring,
accepting, reducing and eliminating. A business without risk is more important for making more
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profit for the company. The different kind of risk involved in business are location risk, human
risk, material risk, etc. These are important to be analysed for avoiding risk in business.
RECOMMENDATION
For Cortina Holding company it is advisable that for this company to expand more in several
markets, it is recommended that this company has to analyse external as well as internal analysis
using PESTEL framework. This will help in knowing about the threats and opportunities a
business is having while operating at global level. Divestment is defined as the process of selling
of subsidiary assets, investments of divisions for maximising the value of parent company and
this strategy will be helpful for Cortina Holding Limited as there is chance of increase in the
price of share of the company. Mergers and acquisitions are defined as the consolidation of
companies. The main reason for Cortina Holding Company to undergo merger and acquisition is
that this will help in increasing the value of Cortina Holding company limited. A NPV theory
and Safe Theory is helpful as it will help the company to analyse the business risk in an effective
manner.
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REFERENCES
Books and Journals
Council, F. R., 2014. Guidance on risk management, internal control and related financial and
business reporting. Financial Reporting Council. Accessed February, 20, p.2017.
Ferreira Rebelo, M., Silva, R. and Santos, G., 2017. The integration of standardized management
systems: managing business risk. International Journal of Quality & Reliability
Management, 34(3), pp.395-405.
Gavalas, D. and Syriopoulos, T., 2014. Bank credit risk management and rating migration
analysis on the business cycle. International Journal of Financial Studies, 2(1), pp.122-
143.
Mazzarol, T., 2015. SMEs engagement with e-commerce, e-business and e-marketing. Small
enterprise research, 22(1), pp.79-90.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Salar, M. and Salar, O., 2014. Determining pros and cons of franchising by using swot
analysis. Procedia-Social and Behavioral Sciences, 122, pp.515-519.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by
next Plc have on themselves and their competition in the UK Clothing Retail
Market?. Journal of Commerce and Management Thought, 8(2), p.234.
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