MB701:International Management of Finance-Management Assignment Help

Assignment task 

Hardware-UK Plc is a UK listed company that manufacture and sell high quality building materials to various customers, both corporate and individuals within the domestic market.

The company have traded for many years and achieved successes through increased sales, profitability, increased share price and dividend pay-outs. The historical success of the company is due to lack of competition from foreign businesses.

The economic situation in the UK has plummeted in the last few years due to events such as Brexit, higher energy prices and the pandemic. Consequently, the UK government is encouraging foreign companies to invest in the country’s building and infrastructure industry to boost economic activities. As a result of this, there is a huge influx of both quality and cheap building materials from the European Union, India and China, among other countries.

The influx of foreign firms has brought business to a tragic head for Hardware-UK plc. Both the share price and profitability have decline for the first time in the history of Multi-Hardware Plc. In the last 6 months, gross profit has declined by 60% over the same period last year and the trend is expected to continue into the foreseeable future if no serious robust action is taken to reposition itself in the hardware market.

The directors of Hardware-UK Plc must rethink the company’s strategic position within the market in order to survive competition from within the UK and from foreign competitors.

During the last strategic meeting of the Board of Directors, it was decided that the way forward is to extend its trading business internationally to boost sales and profitability.

The directors plan to either invest in new manufacturing plant in India to manufacture and sell overseas whilst keeping the existing UK plant, or make further investment in UK to increase manufacturing for local consumption and for export.

The directors recognise that if they do trade abroad, they may have to use appropriate financial instruments to protect their investments against foreign exchange risks.

Adopting any of the above options will involve a huge investment in capital. Assume that both projects have a positive Net Present Value.

Required:

1. Critically examine how the factors described in paragraph 3 above have contributed to the fall in sales and profitability of Hardware-UK Plc.

2. Critically discuss Two investment appraisal methods that can be used by Hardware-UK Plc to arrive at the decision to invest in further plant to boost their business success. You may use assumed figures for illustration.

3. Discuss in detail, two methods that can be adopted by Hardware-UK Plc in protecting their investments abroad against foreign exchange risks.

4. Critically discuss, giving real examples, the Strategic, Financial, Ethical and the regulatory implications of investing overseas.

5. Note that marks will be awarded for Structure. Structure includes the orderly presentation of relevant material and the extent of research evidenced by the appropriateness and adequacy of in-text referencing and bibliography. There must be a Cover Page and Contents Page, paragraphs of Introduction and conclusion and pages must be numbered.

This assignment has been designed to provide you with an opportunity to demonstrate your achievement of the following module learning outcomes:

LO:1 Critically review the methods available to a company to establish itself and trade successfully in the international market.

LO:2. Evaluate and compare the financial instruments used by multinational corporations to minimise risk and maximise shareholder returns

Task requirements:

From your report you will obtain marks for the following:

1. Explanation in detail giving real examples, how Brexit, the increase in fuel prices the pandemic and increased competition have contributed to the fall in sales and profitability.

2. Identification of two investment appraisal options (definitions, explanations, illustrations, benefits and the shortcomings). You will be required to make up your own figures and use that as an illustration.

3. Identification, definitions, explanations, illustration, benefits and problems of using any two of the methods for protecting a company against foreign exchange risks.

4. For each of the options given in the case study, you are required to discuss in detail, the implications of the factors listed, giving specific recent examples. (5 marks for each of the impacts fully discussed,

All discussion must make reference to Hardware-UK Plc and specific examples from relocation to India.

5. Note that marks will be awarded for Structure. Structure includes the orderly presentation of relevant material and the extent of research evidenced by the appropriateness and adequacy of in-text referencing and bibliography. There must be a Cover Page and Contents Page, paragraphs of Introduction and conclusion and pages must be numbered.

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