Exposures to Exchange Rate Fluctuations

International business is facilitated by markets that allow flow of funds between countries in different currencies. Multinational corporations are involved in international trade and receive and pay in various currencies. MNCs must constantly monitor exchange rates because their cash flows are highly dependent on them. The risk faced by these companies due to exchange rate movements after having already entered into financial obligations is called exchange rate risk. Such exposure to fluctuating exchange rates can lead to major losses for the firms.

Exchange rate fluctuations cannot be forecast with accuracy. However, using various techniques, the amount of exposure can be measured and minimized.… Read the rest

Purchasing Power Parity (PPP) Theory of Exchange Rate

Purchasing Power Parity Theory (PPP) holds that the exchange rate between two currencies is determined by the relative purchasing power as reflected in the price levels expressed in domestic currencies in the two countries concerned. Changes in the exchange rate are explained by relative changes in the purchasing power of the currencies caused by inflation in the respective countries. The concept of Purchasing power parity theory (PPP) is traced to David Ricardo, but the credit for stating the law in an orderly manner is given to the Swedish economist Gustav Cassel who proposed it in 1918 as a basis for resumption for normal trade relations at the end of First World War.… Read the rest

How to Build a Successful Social Media Marketing Campaign?

The use of social media has increased exponentially, creating a fertile ground for platforms as a medium for advertising. However, advertising on social media can be very different from traditional advertising, due to the nature of the medium and the way on which marketing messages may be received. However, while there are differences compared to traditional marketing, there are also some similarities; with the stages of planning.

The process of developing a social media marketing campaign may be broken down in to different stages;

  • Determine the specific goals for the campaign.
  • Identification of target market.
  • Decision on the marketing message and specific content that will appeal to the target market.
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International Project Appraisal

International project appraisal also known by a variety of names such as internal company analysis, profiling the organization, capability or resource audit position and strategic advantage analysis, is the process of evaluating a company’s posture relative to its business competition within and outside the country, overall performance and its capability in terms of strengths and weaknesses.

Significance of International Project Appraisal
  1. The organization’s deficiency should also be compared with those of its successful competitors. Such perceptive self appraisal when matched with environmental analysis facilities management to grasp the opportunities and combat the threats inherent in the environment.
  2. International project appraisal has such a vital significance in international corporate planning.
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Social and Commercial Profitability Analysis

Social or National Profitability

Public projects like road, railway, bridge and other transport projects, irrigation, projects, power projects, etc for which socioeconomic considerations play a significant part, rather than mere commercial profitability. Such projects are analysis for their net socioeconomic benefits and the profitability analysis of such projects is known as social or national profitability analysis which is nothing but the socioeconomic cost benefit analysis done at the national level.

Steps involved in determination of social or national profitability:-

  1. National/Social profitability analysis takes into account the real cost of direct costs and real benefit of direct benefits,. For instance, some of the inputs may be subsidized.
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DSMC/ATI Organizational Performance Improvement Model

Out of the organizational performance improvement planning process come specific performance improvement interventions, tactics and techniques. Note that these interventions happen at five checkpoints. Upstream systems, inputs, process, outputs and downstream systems. Quality management efforts must be defined relative to these five checkpoints. In effect, transformation and continuous improvement efforts are commitments to a practice of managing all five-quality checkpoints. The management team then develops, through the performance improvement planning process, a balanced attack to improve total system performance, not just system sub-components. After interventions are made to the system, measure, assess and analyze organizational performance at the five checkpoints to determine whether the expected impact actually occurred.… Read the rest