Imagine that you are a senior business manager for a U.S.-based multinational company. You have been informed by your supervisor that your Company needs to consider expanding into a new international market to seek new opportunities.
To get started, you must decide the following:
Select a publicly-traded Multinational Corporation (MNC) with which you are familiar.
Select a new international market and a country this company currently has not explored and should consider.
Write a 6-8 page paper in which you:
Analyze how each of the three major dimensions of international finance can affect your possible venture of your MNC in your chosen new international market, including potential opportunities and risks for each dimension.
Examine the economic trends and impact of globalization in the chosen market and determine which of those emerging factors have potential for disruption that could affect operations.
Assess whether the country you have chosen maintains a fixed or a flexible exchange system and discuss how this monetary system will affect your MNC. Provide a strong rational for possible implications and drawbacks of the existing system.
Determine how the balance of payments will support the management of your MNC and explain how deficits and surpluses found within the country you have chosen can positively or negatively affect operations of your company.
Analyze how the foreign exchange market your company is considering entering can impact international business operations. Examine key foreign market participants and provide recommendations of possible key financing opportunities for your MNC.
Use at least three (3) quality references. Note: Wikipedia and other Websites do not quality as academic resources
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Analyze the current trends and impact of globalization on international financial management.
Assess the basic functioning of the current arrangements of flexible exchange systems that dominate the international monetary system and explain the impact on business operations.
Interpret the balance of payments accounts, and summarize key information to support financial planning and the strategic management of international business.
Analyze the foreign exchange markets to anticipate fluctuations, minimize the negative impact on international business operations, and identify financing opportunities.
Use technology and information resources to research issues in international banking and finance.
Write clearly and concisely about international banking and finance using proper writing mechanics.
This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.1. Introduction
This report discusses the internationalization options of Costco Wholesale Corporation. Costco is involved in the operation of membership warehouses. It is a wholesale distributor that has a wide range of branded and private-label merchandise in its product portfolio. Some of the basic product lines are snack foods, tobacco, candy, electronics and appliances, alcoholic and nonalcoholic beverages, office supplies, healthy and beauty aids, cleaning and institutional supplies, cameras, toys, automotive supplies, sporting goods, dry as well as institutionally packaged foods, jewelry, apparel, etc. The company is also engaged in the operation of food courts, gas stations, pharmacies, travel businesses, etc. It is geographically diversified and has operations in United States, Canada, Puerto Rico, Japan, Taiwan, Mexico, United Kingdom, South Korea and Australia. Its headquarters are in Issaquah, Washington (Reuters, 2013). Costco has been successful in its operations across these countries and it can use its expertise to explore the attractive regions of Asia which are highly populous and present great demand potential. One such emerging market is the Indian market which is highly populated and Costco’s entry into this market is expected to diversify the country specific risk from its portfolio further.
2. Dimensions of International Finance
The three major dimensions of international finance which sets it apart from domestic finance are market imperfections, political risks, foreign exchange risks and the expanded opportunity set presented to the organization (Resnick, 2010). The entry of Costco in the Indian market has been assessed along each of these dimensions....