MULTINATIONAL CORPORATION

Multinational Corporation



Multinational Corporation

MNC Information

Apple Inc. is an American Multinational and was founded in the first of April 1976 at the hands of Steve Jobs and Steve Wozniak and Ronald Wayne for the sale of personal computers called "Apple-1". These computers are sold as pallets or (Motherboard): central processing unit (CPU) and memory for random access (RAM) chips and video - script core, these parts of course were less than which we consider to be personal computer in the present day.

Apple runs different businesses and is engaged in offering several products and services like the computer designs, servers, network solutions and software and services. The company is running business in USA mainly having the headquarters in different cities like California and Cupertino. The company is currently having 34,300 employees and the financial results show that the revenue of the company has increased by 14.4% from 2008 to 2009. The main reason behind a huge increase in the revenue is the increased sales of iPhone handsets and applications from the iTunes Store. Apple is selling its products to almost whole world and almost all the country's can avail the products of Apple Inc. through several sources that include the online delivery, sales through the retailers and etc (Apple, 2010).

Foreign Market

The foreign market I am selecting for my MNC Apple Inc. is United Kingdom.

Risk of Foreign Currency Exposure

Exposure refers to the degree to which the company depends on the exchange rate. Currency risk is defined as the variation in value due to changes in exchange rate uncertainty in the company. Exposure Management of Foreign exchange with the concept of risk management is called coverage. When the company such as Apple enters a clearing currency position for all that was lost or gained due to the currency conversion between the exchange rates of two countries, one in which is company is operating and the other in which it is based. In this case Apple Inc. is based in America with default currency of U.S. Dollar, while in entering the United Kingdom, it will have to transact and to sell products in GBP, then in the original currency exposure is exactly compensated by the corresponding growth rates / loss on foreign currency hedging.

Transaction Exposure

A type of the foreign exchange risk is the transaction exposure also referred as a short-term economic impact. This applies to the risks associated with specific contracts which the company has already closed due to currency risk. The company may have an impact of the transaction, to buy or sell side of the business transaction. Any transaction that results in an inflow or outflow of foreign currency transaction exposure in the results. Transaction risk arises from the purchase or credit sale of goods or services for which prices are recorded in foreign currency lending or borrowing of funds at redemption must be made in foreign currency, as a member of the troubled currency contracts and other assets, or purchase commitments denominated in foreign ...