Question

• Discuss Financial management strategy which can be used to maintain profitable international operations.and also discuss Operational strategy which can be used to overcome external and internal challenges and maintain continuous operation

Answer 1

Dear Student,

A. Financial management Strategy refers to long term purview and plan for the business in order to ensure whwere to invest, how to invest, to earn good return on investments or in short to have good profitable situations as the business grows encompassing the business risks.

To answer/ to discuss how Financial management startegy can be used to maintain profitable international operations, following are the points for consideration:

1. Funds/finance is needed at each and every step of a business and if used cautiously and effectively, can provide good returns and benefits, which is the key role of financial strategies.

2. Understanding the domestic and international markets , analysing its risk return trade off is the key step of such startegies.

Financial Management Strategy which can be used to maintain profitable international operations:

1. Basis what business are you into, first understand the market trend both domestically and internationally.

2. Risk taking is essential in todays' competitive market, but analysing risk is the step that should be considered before taking risk. To understand the competitors prevailing in the market and basis trends understanding their next steps. To be focussed on exhnage rate fluctuations as it have a drastic impact on international operations.

3. To have sufficient availability/source of funds to be invested once the return on investments analysed is above/meets expectations and the operation is proved to be a good deal.

4. Financial management strategies are just not required at the inception of any business or during the crucial stages but a full proof startegy is required during the life cycle of the operation.

B. Operational Startegy: The startegy/plan to determin/specify how an organisation should/can allocate its resources, so as to support production of goods and services and deliever them timely to the clients. There are numerous hurdles which a business faces that may impact the continuity of their operations.Few examples of that may be:

a) Market risk/market fluctuations impacting return on investments and thus impacting the cash flow.

b) Employees strike/ Labour strike impacting the daily operations and similar ones.

In order to mitgate such risks and avoid hurdles businesses go for operational Startegies.

Operational Strategy to overcome external and internal challenges and maintain continous operations:

1. To have dedicated teams in place i.e purchase department, production, sales, marketing, etc and over and above all legal departments becuase if any legal scenario pops out, we have legal team to look into it and the operations team can focus on production.

2. To ensure timely clearing off of receivables and payables to avoid unnecessary interest charges on overdraft or loans from banks and financial institutions.

3. To ensure qualified personnels are employed for the required tasks and quality is not compromised so as to avoid any technical and legal glitches.

Hope this description resolves your query.

Thanks.