Lecture International marketing: Strategy and theory - Chapter 18: Financial strategies: Financing and currencies

Chapter 18

Financial Strategies:
Financing and
Currencies


Chapter Outline
 Nonfinancial

Institutions
- Self Financing and Debt Financing
- Equity Financing
 Financial Institutions
 Government Agencies

 

 


Chapter Outline
 International

Financial
Institutions/Development Banks
–
–
–
–
–

World Bank
International Development Association (IDA)
International Finance Corporation (IFC)
Multilateral Investment Guarantee Agency (MIGA)
International Centre for Settlement of Investment
Disputes (ICSID)

 IMF

(International Monetary Fund)
 

 


Chapter Outline
 Money
 Foreign

Exchange
 Foreign Exchange Market
 Foreign Exchange Rate
- Currency Equilibrium
- Effect of Devaluation

 

 

Chapter Outline





Exchange-Rate Systems
Gold Standard
Par Value (Adjustable Peg)
Crawling Peg (Sliding or Gliding Parity)
Wide Band
Floating (Flexible) System
Official Classification of Exchange Rate Regimes
Evaluation of Floating Rates
 

 


Chapter Outline
 Financial

-

Implications and Strategies
Early Warning Systems
Hedging
Leading and Lagging
Invoicing

Pass-Through Costs
Other Strategies
 

 


Self Financing and Debt Financing
 own

capital
 withholding of dividends
 trade credit
 joint venture partners
 borrowing from affiliated firms and employee
retirement fund
 issuing commercial paper or bonds
 

 


Equity Financing
 Selling

Stock
 Venture Capital

 

 


Financial Institutions
 Factoring

Houses

 Forfaiting
 Banks

 

 


Government Agencies
 Concessionary

Financing
 Mixed/Blended Credit

 

 


International Financial Institutions/
Development Banks
 World

Bank (IBRD)
 International Development Association (IDA)
 International Finance Corporation (IFC)
 Multilateral Investment Guarantee Agency
(MIGA)
 International Centre for Settlement of
Investment Disputes (ICSID)
 

 


Money
 Hard

(International) Currencies vs. Soft
Currencies
 Functions of Currency
- medium of exchange
- unit of account
- store of value

 

 


Foreign Exchange Market
 Credit

(Financing)
 Clearing
 Hedging
 Spot Market vs. Forward Market

 

 


Foreign Exchange Rate
 Currency

Equilibrium
 Effect of Devaluation
- Exports and Employment
- Imports and Consumer Welfare

 

 


Exchange Rate Systems
 Gold

Standard
 Par Value (Adjustable Peg)
 Crawling Peg (Sliding or Gliding Parity)

 Wide Band
 Floating (Flexible) System

 

 


Official Classification of Exchange
Rate Regimes






-

Floating Exchange Rate Regimes
independently floating regimes
managed floating regimes
Intermediate Exchange Rate Regimes
soft pegs
tightly managed floating regimes
Hard Peg Regimes
currency boards
exchange rate regimes with no separate legal tender
 

 

Financial Implications
and Strategies
 Early

Warning Systems
 Hedging
 Leading and Lagging
 Invoicing
 Pass-Through Costs
 Other Strategies