Case Study of Mastercard: Going Upscale

Check, cash, or credit card? How many times have you heard that question and replied “credit card” without even thinking about it? When you do think about it, however, credit cards are a relatively new phenomenon. Yet when it comes time to pay, it seems we’re more likely to use the credit card (and to have several of them) than checks or cash. Indeed, some writers have even suggested that, in the not so distant future, we will all operate with “plastic money” all the time.

MasterCard had its beginnings in 1966, when a group of banks joined together to form the Interbank Card Association (ICA).… Read the rest

Economic Exposure of Foreign Exchange Risk

Economic exposure is concerned with the present value of future operating cash flows to be generated by a company’s activities and how this present value, expressed in parent currency, changes following the foreign exchange rate movements. The concept of economic exposure of foreign exchange risk is most frequently applied to a company’s expected operating cash flows from foreign operations, but it can equally well be applied to a firm’s home territory operations and the extent to which the present value of those operations alters resultant upon changed exchange rates. For the purpose of convenience, the exposition that follows is based on a firm’s foreign operations.… Read the rest

Some Facts Regarding Credit Cards

Know the Credit Card Well Before Applying for One

Owning credit cards are quite handy. You need not bring cash but still able to buy anything you want since almost all establishments, including those selling online, accept all types of credit cards. In fact, even if you do not have money yet, you can already make any purchase that may be heavily needed. It therefore provides safety and an answer to emergency needs.

However, people who are making use of credit cards should have discipline and be responsible enough not to spend beyond their means or end up being burdened with tons of debt.… Read the rest

Case Study: Citibank’s Indian Business Model

Citigroup opened its first office in India in Kolkata (Calcutta) in 1902. With capital nearing US$ 1 billion it is the single largest foreign direct investor in the financial services industry in India. It has become one of India’s most diverse and recognized financial service providers operating through 40 branches of Citibank N.A. across 20 cities and through various finance companies operating directly/indirectly out of locations across the country. Citigroup India offers a complete range of corporate and investment banking services under the “Citigroup” brand name, consumer banking products and services under the “Citibank” banner and consumer finance under the “CitiFinancial” banner.… Read the rest

Case Study: The Daewoo Group and the Asian Financial Crisis

In 1999, Daewoo Group Korea’s second largest chaebol, or family-owned conglomerate, collapse under $57 billion in debt and was forced to split into independent companies. The Asian financial crisis and its aftermath finally took its toll on the expansion-minded Daewoo and forced both Daewoo and the Korean government to decide how to dissolve the chaebol. Kim Woo-Choong started Daewoo in 1967 as a small textile company with only five employees and $10,000 in capital. In just 30 years, Mr. Kim had grown Daewoo into a diversified company with 250,000 employees worldwide as well as over 30 domestic companies and 300 overseas subsidiaries that generated sales of more than $100 billion annually.… Read the rest

Case Study: Business Model of Napster

The Napster brand has had a varied history. Its initial incarnation was as the first widely used service for ‘free’ peer-to-peer (P2P) music sharing. The record companies mounted a legal challenge to Napster due to lost revenues on music sales which eventually forced it to close. But the Napster brand was purchased and its second incarnation offers a legal music download service in direct competition with Apple’s iTunes.

The original Napster

Napster was initially created between 1998 and 1999 by a 19 year old called Shawn Fanning while he attended Boston’s Northeastern University. He wrote the programme initially as a way of solving a problem for a friend who wanted to find music downloads more easily online online.… Read the rest