CREDIT RATING

Credit Rating



Credit Rating and Risk

Introduction

The study of this course is going to be based on the companies 'Elders & BMW', and regarded as leaders in their respective fields. During this assignment I have conducted research on the financial and credit risk structure of the companies with the help of secondary research. The study of the assignment will focus on the potential financial and credit risks faced in context with the possible marketing strategies used by both the companies.

Elders

Elders' is one of the oldest company, established in 1839 in Australia. They are engaged in different businesses like suppliers, advisors and agent for Australian primary products like agriculture Products. This Company is listed on Australian stock exchange, although this year company has suffered a loss but this is because of thy have set-off some non recurring expense.

BMW

The Bayerische Motoren Werke also commonly known as (BMW) is the world's most renowned automobile brand. The company is based in Germany with it's headquarter in Munich, Germany. BMW manufactures automobiles, aircraft engines, motorcycles, and other premium products Rolls-Royce, BMW mini. The company has a total of 23 production facilities around the globe in 12 different countries with representation in more than 140 countries. (Frost 2002, 2)The company is famous for its world class luxury cars offered to international customers.

Discussion

Risk management in Elders

The Elders Group's risk management system consists of a wide range of finely tuned organizational and methodological components. It is based on a decentralized structure and supported by a network of risk managers. (Clark 2008, 17)The risk management system is aimed at encouraging a balanced approach to risks at all organizational levels. The risk management process is applied across the Group and comprises the analysis and early identification of opportunities and risks, their measurement and the use of suitable instruments to manage and monitor risks. As part of the risk reporting system, decision makers are regularly informed about risks that could have a significant impact on business performance.

Business decisions are reached after consideration of in- depth project analyses which show both potential risks and potential opportunities. In conjunction with the Group's monthly and medium- and long-term forecasting systems opportunities and risks attached to specific business activities are evaluated and used as the basis for implementing measures to mitigate risks and achieve targets. (Bindseil, 2009, 25)Important success factors are monitored continuously to ensure that unfavorable developments are identified at an early stage and appropriate countermeasures implemented.

Risk management in BMW

As an international car manufacturing company it is exposed to macroeconomic and other business risks. Thanks to the held-to-date management systems, the company recognizes early risks and opportunities and direct actions in it. The proven risk strategy allows us to take advantage of favorable business opportunities if the risk-return ratio is the market. In addition, the risks are appropriate and acceptable in terms of value creation. An integral element of their corporate governance is the conscious control of opportunities and risks. Risk management is therefore integrated into existing business ...