INTERNATIONAL MARKETING

International Marketing

International Marketing

Introduction

Rec$ession and fi$nancial confrontation have in latest years supplied an painful reminder of economic risk of worldwide business. International companies, finance$ial organisations, and worldwide inve$stors have skilled that profitability of their prime enterprise has been harmfully influenced by foremost fluctuations in exchange rates, supply market charges and in borrowing ranking of contradict parties. Additionally, enterprise risk inbuilt in prime enterprise of an worldwide company, which is administered with by long period strategic designing and enterprise cycle supervising, worldwide company has to deal with economic risks. Some of them are recorded underneath (Bostas, 2005).

 Interest rate risk - The risk of increased funding costs due to high rates of interest, which may override for longer or shorter periods.

Liquidity risk - The risk of running short of cash when liquidity in banking system is scarce and expensive.

Credit risk. -The risk of losses due to inability to pay by counter parties,

International Recession & Financial Setbacks

The internationalization of business has made management of financial risk more important. It is the natural consequence of conducting international business that the corporation is exposed to one or more of above financial risks.

The finance department must be able to record all group companies' operational, investment and financial cash flows, balance sheet exposures, financial investments and loans as well as hedging operations in one multidimensional database of the Finance Management System. The currency and maturity structure of flows must be reportable in any manner desired. The financial risks must be calculated by analyzing total net result of incremental changes in currencies, interest rates and stock market values. "A scheme should be implemented that is very simple to operate, dependable and able to communicate with accounting ledgers of company as well as worldwide economic markets. The finance department should be able to update positions in real time, produce regular and ad hoc management reports as well as analysis and simulate financial risk exposures of group" (Bostas, 2005). assortment must be likely on subgroups, divisions and individual group businesses. The financial risk exposure must be available to corporation management at any point in time.

Numerous examples have illustrated how financial activities of finance departments have developed the scope that has rivaled that of primary business. In several cases loss on currency and/or derivative positions has resulted in substantial financial loss. However, corporation cannot let horror stories of financial failures lead to the policy of ignoring financial risk of primary business ...