This document profiles 4 businesses (+1 potential business) as examples to understand different business needs and how financial industries can meet those needs. The businesses summarized are:
1) A small informal general store seeking funds for expansion.
2) A disruptive startup developing new scrap metal technology, needing testing/refinement funds.
3) A steady family furniture business seeking liquidity and machinery upgrades.
4) A large publicly-listed consumer goods corporation seeking acquisitions and advertising in new markets.
This presentation was prepared as a briefing for ACCA's Financing Futures programme, which aims to extend a previous scenario analysis on the future of the financial services industry in order to find out how different types of businesses are likely to finance themselves in each of the scenarios developed therein.
The full report on the earlier scenario analysis, titled 'In Safe Hands?' can be accessed here: http://www.samiconsulting.co.uk/4insafehands.pdf
For more details on ACCA's Access to Finance thought leadership programme, see here: http://www.accaglobal.com/en/research-insights/access-finance.html
For more details on SAMI Consulting, see here: http://samiconsulting.co.uk/
For more details on L3F, see here: http://www.longfinance.net/lf-about.html#L3F
This presentation was prepared as a briefing for ACCA's Financing Futures programme, which aims to extend a previous scenario analysis on the future of the financial services industry in order to find out how different types of businesses are likely to finance themselves in each of the scenarios developed therein.
The full report on the earlier scenario analysis, titled 'In Safe Hands?' can be accessed here: http://www.samiconsulting.co.uk/4insafehands.pdf
For more details on ACCA's Access to Finance thought leadership programme, see here: http://www.accaglobal.com/en/research-insights/access-finance.html
For more details on SAMI Consulting, see here: http://samiconsulting.co.uk/
For more details on L3F, see here: http://www.longfinance.net/lf-about.html#L3F
Charles Hills defines globalization as "The shift towards a more integrated and interdependent world economy". Globalization has two main components - the globalization of markets and the globalization of production.
According to International Monetary Fund, globalization means "the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and of international capital flows and also through the more rapid and widespread diffusion of technology. Interdependency and integration of individual countries of the world is also called as globalization”.
LECT-8-Global Environment In Corporate Strategy.pptxdebajanipalai
Global Environment:
Global environment is the most vital component of macro environment.
It refers to operating in more than one country in the world & gain its R & D, production, marketing & financial advantages in terms of cost & reputations that are not available to domestic competitors.
Globalization of markets refers to the process of integrating & merging of world markets into a single market. This process involves the identification of some common norm, value, taste, preference & cultural shift towards the use of common product or services.
The Example of products having global acceptance are: Coca-Cola, Pepsi, Mc Donald’s, Citicorp Credit cards etc.
Characteristics of Global Environment:
Global Environment treats the whole world as a common village focuses on how organizations are related to each other.
It consists of a set of fresh beliefs, working methods, economic, political and socio-cultural relatives in business.
It integrates the world economy & opens scope for new potential of huge market.
It intends to remove all global barriers among countries.
Global Company:
Global company is a firm which having multiple units that are located in different parts of the world, but all are being linked by common ownership of umbrella.
Global multiple units draw a common pool of resources like: money, credit, information, patent, trade name & control system.
Its shareholders & human capital are of different nations. The company follows common strategy to sell its products in most of the countries.
Reasons For Globalization:
The large scale industries have mass production. So they focus on foreign market.
They try to reduce the risk of diversity of portfolio of countries.
Companies globalize markets in order to increase their profits & achieve goals.
The adverse business environment in the home country pushes the companies to globalize their market.
The failure of domestic companies in catering the needs of their customers pulled the foreign countries to market their products.
It is particularly important to industries which are directly depending on imports & exports.
Advantages Of Globalization:
Free flow of capital & increase in the total capital employed.
Free flow of technology from developed countries to developing countries.
Increase in industrialization.
Spread production facilities throughout the globe.
Balanced development of world economies.
Increased in production & consumption of outputs.
Commodities available at lower price with high quality.
Cultural exchange & demand for a variety of products in foreign market.
Increase in job opportunities & income for the country along with welfare & prosperity.
Disadvantage Of Globalization:
Globalization kills domestic small business firms.
It exploits human resources in global firms.
It leads to unemployment & underemployment in developing countries.
It declines income & standard of living due to unemployment & increases high gap between rich & poor.
Revisionstation: Edexcel GCSE Business 2.1.1 Business growth V2.pptxRevisionstation
Methods of business growth and their impact:
Internal (organic) growth: new products (innovation, research and development), new markets (through changing the marketing mix or taking advantage of technology and/or expanding overseas)
External (inorganic) growth: merger, takeover
The types of business ownership for growing businesses:
Public limited company (plc)
Sources of finance for growing and established businesses:
Internal sources: retained profit, selling assets
External sources: loan capital, share capital including stock market flotation (public limited companies)
Full Theme 2 pack available to buy on the Revisionstation site
Entrepreneurial and innovation for SMEs in LibyaOECDglobal
Dr. Dia Eddin Sadek Abuhadra, Advisor to Libya Enterprise, 11 May 2016, Regional conference: Investment and inclusive growth in the midst of crisis, Beirut
Charles Hills defines globalization as "The shift towards a more integrated and interdependent world economy". Globalization has two main components - the globalization of markets and the globalization of production.
According to International Monetary Fund, globalization means "the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and of international capital flows and also through the more rapid and widespread diffusion of technology. Interdependency and integration of individual countries of the world is also called as globalization”.
LECT-8-Global Environment In Corporate Strategy.pptxdebajanipalai
Global Environment:
Global environment is the most vital component of macro environment.
It refers to operating in more than one country in the world & gain its R & D, production, marketing & financial advantages in terms of cost & reputations that are not available to domestic competitors.
Globalization of markets refers to the process of integrating & merging of world markets into a single market. This process involves the identification of some common norm, value, taste, preference & cultural shift towards the use of common product or services.
The Example of products having global acceptance are: Coca-Cola, Pepsi, Mc Donald’s, Citicorp Credit cards etc.
Characteristics of Global Environment:
Global Environment treats the whole world as a common village focuses on how organizations are related to each other.
It consists of a set of fresh beliefs, working methods, economic, political and socio-cultural relatives in business.
It integrates the world economy & opens scope for new potential of huge market.
It intends to remove all global barriers among countries.
Global Company:
Global company is a firm which having multiple units that are located in different parts of the world, but all are being linked by common ownership of umbrella.
Global multiple units draw a common pool of resources like: money, credit, information, patent, trade name & control system.
Its shareholders & human capital are of different nations. The company follows common strategy to sell its products in most of the countries.
Reasons For Globalization:
The large scale industries have mass production. So they focus on foreign market.
They try to reduce the risk of diversity of portfolio of countries.
Companies globalize markets in order to increase their profits & achieve goals.
The adverse business environment in the home country pushes the companies to globalize their market.
The failure of domestic companies in catering the needs of their customers pulled the foreign countries to market their products.
It is particularly important to industries which are directly depending on imports & exports.
Advantages Of Globalization:
Free flow of capital & increase in the total capital employed.
Free flow of technology from developed countries to developing countries.
Increase in industrialization.
Spread production facilities throughout the globe.
Balanced development of world economies.
Increased in production & consumption of outputs.
Commodities available at lower price with high quality.
Cultural exchange & demand for a variety of products in foreign market.
Increase in job opportunities & income for the country along with welfare & prosperity.
Disadvantage Of Globalization:
Globalization kills domestic small business firms.
It exploits human resources in global firms.
It leads to unemployment & underemployment in developing countries.
It declines income & standard of living due to unemployment & increases high gap between rich & poor.
Revisionstation: Edexcel GCSE Business 2.1.1 Business growth V2.pptxRevisionstation
Methods of business growth and their impact:
Internal (organic) growth: new products (innovation, research and development), new markets (through changing the marketing mix or taking advantage of technology and/or expanding overseas)
External (inorganic) growth: merger, takeover
The types of business ownership for growing businesses:
Public limited company (plc)
Sources of finance for growing and established businesses:
Internal sources: retained profit, selling assets
External sources: loan capital, share capital including stock market flotation (public limited companies)
Full Theme 2 pack available to buy on the Revisionstation site
Entrepreneurial and innovation for SMEs in LibyaOECDglobal
Dr. Dia Eddin Sadek Abuhadra, Advisor to Libya Enterprise, 11 May 2016, Regional conference: Investment and inclusive growth in the midst of crisis, Beirut
2. ENTERPRISE PROFILES
• Four (+1) ‘typical’ businesses
• based on real businesses somewhere in the world!
• Try to imagine…
• Their business needs dictate their funding needs
• The shape of the financial industry dictates how they
will be met.
• All businesses are going concerns capable of profits
• Will they be equally important in all scenarios?
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3. 1. The informal enterprise
http://www.lendwithcare.org/entrepreneurs/index/2629
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5. THE INFORMAL ENTREPRENEUR
• 0 salaried employees (family members involved)
• Has run a general store for the last 2 years
• Growth is slow due to physical constraints
• Needs funds for new stock, more products and
to begin expanding premises
• Risks: quality of management, competition,
customer income, natural disasters, crime,
compliance
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6. 2. The Disruptive Enterprise
http://www.didion.com/company.html
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8. THE DISRUPTIVE ENTERPRISE
• First financing round
• 0 salaried employees, 0 turnover
• Developed a new technology for
reclaiming and sorting scrap metal that
could revolutionise the industry
• Has built a prototype
• Technology needs testing, refinement,
patenting. Won’t sell for another year
• Risks: buyers, regulatory approval,
imitators
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9. THE DISRUPTIVE ENTERPRISE (II)
• Second financing round
• 45 salaried employees, growing rapidly
• New technology patented, in production
and profitable, sold in multiple countries
• Assets are mostly patents, licences, stock
• Needs to expand overseas
• Risks: imitators, regulatory policy
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10. 3. The steady-state family firm
http://www.dw.de/dw/article/0,,6385455,00.html
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12. THE STEADY STATE FAMILY FIRM
• 30 salaried employees, slow, steady growth
• Mid-range furniture manufacturer, owned by
same family for 100 years (3nd generation)
• Needs liquidity and to upgrade two key
pieces of machinery
• Risks: customer spending, dependence on
the owner-manager, governance,
compliance
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13. 4. The leading corporate
http://www.unilever.com/
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15. THE LEADING CORPORATE
• 200,000 employees, publicly listed
• 100 yrs old. Diverse portfolio of well known
consumer goods worldwide
• Share of consumer spending in most markets is
steady; growth concentrated in a few heavily
contested markets.
• Needs to acquire popular local brands &
advertise heavily in 10 promising new markets
• Risks: managing acquisitions, understanding
target markets, consumer spending, generics.
The global body for professional accountants