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'Grow global' is the corporate vision of Seashore Pty Ltd - HSC - SSCE Business Studies - Question 26 - 2005 - Paper 1
Question 26
'Grow global' is the corporate vision of Seashore Pty Ltd. This canned fish manufacturer has been one of Australia's fastest growing companies since it was establish... show full transcript
Worked Solution & Example Answer:'Grow global' is the corporate vision of Seashore Pty Ltd - HSC - SSCE Business Studies - Question 26 - 2005 - Paper 1
Step 1
Describe the strategic role of financial management
Answer
Financial management plays a critical role in ensuring that a company can achieve its objectives efficiently and effectively. It involves planning, organizing, directing, and controlling the financial activities of a company, including procurement and utilization of funds. A key component is to ensure that the company's resources are used optimally to maximize shareholder wealth.
Financial management helps in assessing the financial health of a firm, providing insights to ensure compliance with regulations, and facilitating strategic decision-making processes. It also encompasses functions such as financial forecasting, budgeting, and performance evaluation.
Step 2
foreign direct investment as a method of expansion
Answer
Foreign direct investment (FDI) involves investing in and acquiring physical assets or business operations in another country, in this case, Japan. This strategy can lead to increased market presence and benefits such as reduced costs associated with local production, tax incentives, and access to new technologies.
However, FDI involves risks such as political instability and exchange rate fluctuations. To successfully implement this strategy, Seashore should conduct in-depth market research and risk analysis to choose the best regions and methods for investment.
Step 3
the use of equity finance to fund expansion
Answer
Equity finance involves raising funds by selling shares in the company. This method allows Seashore Pty Ltd to gather necessary capital without incurring debt. It also brings in investors who may provide valuable expertise in the Japanese market.
However, issuing new shares may dilute existing shareholders' ownership. The company needs to weigh the advantages against potential downsides by assessing shareholder response and market conditions before initiating this funding strategy.
Step 4
differentiating its product offering in Japan
Answer
Differentiating products is essential to penetrate new markets such as Japan, where consumer preferences may vary significantly. Seashore Pty Ltd can adopt strategies such as localization of flavors, packaging design, and branding to meet specific consumer needs in Japan.
Effective market analysis and consumer feedback should guide product development. Consequently, this strategy would not only help in achieving market share objectives but also reinforce brand reputation, aligning closely with overall financial goals by increasing sales and profitability.