Business Finance and Strategic Management Principles

Posted on Dec 5, 2024 in Economy

Financial Function and Investment

The financial function manages and controls financial resources. Key questions include: total source volume, optimal financial structure, and necessary investment types for productive activities.

Investment Selection Methods

Net Present Value (NPV): Updates cash flows with a rate, selecting the highest positive value.

Payback Period: Considers updating cash flow, focusing on recovery time.

Static Methods: Consider lifetime investment.

Net Cash Flow: Represents the difference between receipts and payments.

External Financing

Sources include loans, leasing, and subsidies. Leasing allows asset use for a fee, with a purchase option. Renting lacks this option.

Strategic Management

Stages of Strategic Management

  1. Define objectives (specific, measurable, feasible).
  2. Assess internal resources (strengths, weaknesses).
  3. Evaluate external resources (opportunities, threats).
  4. Analyze the competitive environment.
  5. Predict future scenarios (optimistic, pessimistic, neutral).
  6. Formulate and evaluate possible strategies.
  7. Choose implementation strategy and tools (PERT-CPM, Gantt).
  8. Control objective achievement and deviations.

Growth Strategies

Internal Growth: Creating new business, suitable for non-saturated markets.

External Growth: Acquiring other companies, suitable for saturated markets.

Internationalization Challenges

  • Lack of market information.
  • Shortage of qualified personnel.
  • Resistance to change.
  • Cultural and taste differences.
  • Adapting to legislation.

Environmental Considerations

Businesses face resource depletion and negative externalities (pollution, waste). Sustainable development is crucial, involving:

  • Limiting renewable resource consumption.
  • Determining nonrenewable resource consumption rates.
  • Restricting pollutant emissions.
  • Promoting clean production.

Environmental respect benefits companies through legal compliance, tax incentives, improved image, and economic advantages.

Business Cases

ARTFIRA Expansion

SWOT analysis identifies weaknesses (limited skilled workers), threats (competition), strengths (interest in services), and opportunities (strategic fair locations).

RAU Company Analysis

Calculates break-even point and profit based on costs and sales.

Company Formation

Recommends a limited liability company for asset protection, low initial investment, and future share acquisition flexibility.