INTERNATIONAL TRADE

International Trade

International Trade

Table of Contents

Introduction3

Elders3

BMW3

Risk management in Elders4

Risk management in BMW4

Major Risk Faced by Both Companies5

Exchange rate risk5

International business environment5

WTO and globalization6

Cultural differences and international trade8

Barriers to international trade8

Prominent barriers to the international trade are as under:8

Opportunities for business for the European companies9

European Union and its political Effects on UK Trade10

European Union directives and its impact on UK domestic and international trade11

Balance Of payments12

Exports and imports12

Contracts13

For the franchisor (Softabrit)14

For the franchisee:15

Financial15

Conclusion15

Task 1

Introduction

The study of this course is going to be based on the companies which are running their business internationally, these companies includes 'Elders & BMW', and regarded as leaders in their respective fields. This research focuses on the financial and credit risk structure of the companies in terms of international business this research was completed with the help of secondary research. The study of the assignment will focus on the potential financial and credit risks faced in the context of doing business internationally.

Elders

Elders' is one of the oldest companies, established in 1839 in Australia. They are engaged in independent businesses like suppliers, advisors and agent for Australian primary products like agriculture Products. This Company is listed on Australian stock exchange with their offices in China, Germany , Russia Italy, Indonesia and France, 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 its 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.

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 a multinational car manufacturing company ...