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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 pivotal role in helping organizations maximize value and achieve their strategic goals. It involves planning, organizing, directing and controlling financial activities such as procurement and utilization of funds. This strategic role includes:
- Resource allocation: Ensuring that financial resources are appropriately allocated to enhance company expansion and growth.
- Risk management: Identifying, analyzing, and mitigating financial risks which could impede growth in new markets like Japan.
- Performance measurement: Establishing metrics to assess the effectiveness of financial strategies in meeting marketing and financial objectives.
Step 2
foreign direct investment as a method of expansion
Answer
Foreign direct investment (FDI) enables Seashore Pty Ltd to establish a direct presence in Japan's market, thereby fostering local partnerships, understanding consumer preferences, and adapting products accordingly. This strategy can contribute to achieving the 5% market share by:
- Building a local brand: Creating a recognizable brand associated with high quality and local relevance.
- Cost control: Reducing shipping and import costs by producing locally.
- Long-term gain: Fostering sustainable growth through direct investment in local operations.
Step 3
the use of equity finance to fund expansion
Answer
Utilizing equity finance can provide the necessary capital for Seashore Pty Ltd to invest in its operations in Japan without accruing debt. This strategy signifies:
- Low financial risk: As no repayments are necessary, equity finance reduces the pressure on cash flow during the crucial phase of market entry.
- Access to expertise: Equity investors may bring additional resources and experience, thus strengthening the market entry strategy.
- Enhanced credibility: Gaining investor confidence can make it easier to secure future funding or support.
Step 4
differentiating its product offering in Japan
Answer
Differentiating Seashore’s product offerings in Japan is crucial to capturing market share. This can involve:
- Tailoring flavors and packaging: Adapting products to cater to Japanese consumer preferences.
- Innovative marketing: Leveraging unique cultural marketing strategies that resonate with local consumers.
- Quality enhancement: Prioritizing product quality to build trust and brand loyalty among Japanese customers.
Through product differentiation, Seashore Pty Ltd is likely to create a competitive advantage that aligns with both marketing and financial objectives.