...TABLE OF CONTENTS Introduction 2 Global Impacts of the Credit Crunch 3 IBM – International Business Machines 4 Table 1: IBM’s Financial Performance History 2000-2009. Source: IBM Annual Report 2009 5 Table 2: Earnings per share 2006 to 2010 projection. Source: IBM Annual Report 2009. 6 How the Credit Crunch Impacted IBM’s Operations 7 Global Integration 7 Changing Business Scope 7 Revenue 8 Human Resource Management Impacts 8 Price Instability 8 Exchange Rate Fluctuation 8 Interest Rate Fluctuations 8 Debt 9 Notable Impacts 9 IBM’s Operational Strategy 10 Strategic Response 10 HRM Strategy 10 Value Chain Strategy – Developing a Business of Values 11 Table 3: IBM Value Chain. Source – ibm.com/services 12 International Strategy 13 Institutional Strategy 13 Recommendations for Future Growth 14 Delivering Value to Customers 14 Human Resource Capital 15 Research and Development 16 References 17 Bibliography 18 Introduction The ‘Credit Crunch’ emerged in 2007 with the first effects being felt by the U.S. Mortgage industry. The term ‘credit crunch’ came was used to describe the collapse of the subprime mortgage industry that resulted in a freeze in lending by financial institutions. With non-payment of loans, huge debt and no capital gains, financial institutions began to go under. Investment banks, financial services and real estate market felt immediate impacts. Trillions of U.S. dollars were lost, huge government bailouts...
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...Credit crunch and SME financing ----Take China as an example * * Shu Ruochen Noah 4063148 * Yuan Ziting Circle 40631 * Chou Xue Snow 40631 * * ABSTRACT ------------------------------------------------- SME are always important forces of social and economic development,and they play important roles in optimizing the economic structure, promoting innovation,easing social pressures and maintaining social stability.However, the world crisis was triggered by financial crisis in 2008 in USA, which has great impact on China’s economy, especially on SME.Since the credit crunch, SME are unable to obtain full production and operation funds needed timely,and Bank loans to enterprises are more cautious, so financing of SME will become more apparently difficult.Therefore, in order to solve the financing problems of SME, exploring development mode and long-term mechanisms which is adapt to economic structural has been an urgent strategic issues. * 1. Definition of credit crunch * A credit crunch is a sudden reduction in the general availability of loans (or credit ) or a sudden tightening of the conditions required to obtain a loan from the banks . * A credit crunch generally involves a reduction in the availability of credit independent of a rise in official interest rates . * 2. Background of Credit crunch. ------------------------------------------------- 2008 the financial crisis took place in USA...
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...Table of contents 1. Introduction ................................................................................................................................... 1 1.1. 1.2. 1.3. Structure of the report.............................................................................................................. 1 Mc Donald’s’ Business Model ................................................................................................ 1 Credit crunch ........................................................................................................................... 1 2. Theoretical framework ................................................................................................................. 2 2.1. The credit crunch 2008 ............................................................................................................ 2 The deregulation of the financial markets ....................................................................... 2 The U.S. housing market ................................................................................................. 2 Consequences of the subprime mortgage crisis............................................................... 3 Impact on businesses and consumers in the U.S. ............................................................ 4 2.1.1. 2.1.2. 2.1.3. 2.1.4. 2.2. 2.3. 2.4. 3. SWOT analysis ...................................................................................................
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.............. 1.0 Impacts Of Credit Crunch On U.S........................................ 1.1 Impact on U.S Economy...................................................... 1.2 Impact on Interest Rates...................................................... 1.3 Impact on Banking Sector.................................................... 1.4 Impact on Mortgages and Credit Lending Agencies............ 1.5 Impact on GDP..................................................................... 1.6 Impact on Inflation................................................................ 1.7 Impact on Employment in U.S.............................................. 2.0 Implemented Strategies To Overcome The Impacts............ 2.1 Fiscal Policy............................................................................ 2.2 Seek Direct Foreign Investment............................................. 2.3 Establish Proper Monitoring System...................................... 2.4 Strengthening the Country’s Internal Infrastructure............... Conclusion...................................................................................... References...................................................................................... INTRODUCTION “An immediate or sharp condition of unavailability of liquid money from the banks and money lending agencies in an economy is known as credit crunch”. The 2007-2009 global financial...
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...Global Marketing Strategies Contents TASK 1 2 1.0. INTRODUCTION 3 2.0. HOW CREDIT CRUNCH WILL AFFECT INTERNATIONAL BUSINESS? 4 3.0. RECOMMENDATIONS TO OVERCOME THIS CREDIT CRUNCH 6 4.0. CONCLUSION 7 5.0. BIBLIOGRAPHY 8 TASK 1 Discuss the likely effects to international/global business by the recent credit crunch. Suggest ways to overcome these problems. 1.0. INTRODUCTION Credit crunch is an economic downturn, when the world experiences a credit crisis. It is caused by declining value in real estate and by defaulting loans, arising from contraction in the supply of credit. A credit crunch is a [sudden] reduction in the availability of liquidity in the financial markets ( i.e. loans or credit) resulting in a sudden increase in the cost of obtaining a loan from financial institutions(Pearson, M. 2008) The United States of America banks had extended loans for purchase of homes to “risky” clients and this resulted in loan defaults in mortgages but soon spread to the rest of the market both in the United States of America and in the rest of the world. 2.0. HOW CREDIT CRUNCH WILL AFFECT INTERNATIONAL BUSINESS? The credit crunch affects international business in many ways as described below: 1.0. High Interest rates- the credit crunch has resulted in high interest rates and high cost of borrowing. This affects businesses as the cost of re-financing or diversifying a business increases. Businesses with large debt see high cost of...
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...banking system which can be sustained through strict regulations and supervision in order to monitor and control business risks such as Capital Risks, Liquidity Risks, Credit Risks, Exchange Risks, Operational Risks, Market Risks and Legal Risks. Bank regulations and bank supervision are required to facilitate a ‘Systematic Risk Reduction’ approach thus reducing the risk of adverse trading conditions and to ensure that Financial Institutions satisfy at least the minimum ‘Prudential’ requirements in order to reduce the risk factor that creditors are exposed to. Lack in regulations and slack in supervision may lead to Financial Institutions risking bankruptcy thus exposing their clients of potentially losing their investments and financial assets while distressing the country’s economy. 2 What is the actual function of a bank within an economy? Banks' traditional role is primarily that of an intermediary for money, i.e. granting loans, processing payments, accepting deposits, carrying out investments, etc... Although banks do not create new wealth, through borrowing, lending and related activities they facilitate the process of production, distribution, exchange and consumption of wealth. In this way banks become very effective partners in the process of economic development. (BlurtIt.com, 2007) Banks act as the backbone of the economy. Instead of keeping peoples’ savings idle, banks inject this working capital in the economy; as long...
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...1. Introduction The Global financial and economic crisis in 2007 and a liquidity crisis of the world's leading banks force us to reconsider the debt relations. Credit boom accompanied by rising debt payments, could not continue persistently. Debt servicing was possible only with high incomes or assets value of the debtor, and as soon as the growth of income or assets stopped, the debtors have faced problems in servicing their debts: in spite of the decline in income and assets value of debt borrowers’ debt during the crisis did not reduce. As a result, the debtors faced decoupling of debts from assets. According to Minsky decoupling between firms’ debt and assets, or the debt crisis caused by the cyclical nature of economic development: at...
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...| CONTENTS: 1. Introduction 2. Credit Crunch 3. Covered Bonds 4. Basic Assumptions 5. Analysis * Covered Bonds and the Financial Crisis in Europe * Effect of Covered Bonds on Bank Margin * Covered Bond as a means of liquidity and funding base 6. Conclusion 7. References Question 1 Does offering covered bonds hold the answer to credit rationing (credit crunch) in a financial crisis or does it just offer banks the opportunity to increase their margin? Discuss critically. Introduction In the US, credit crisis of 2007-2008 demolished the securitized mortgage bonds and many of the participants left the market never to recommit themselves in the near future. This lead to an drop in securitized debt issuance where the banks began to hoard cash and reduce consumer lending leading. The US Treasury to take measures to revitalise the financial market to encourage investors to buy loan from banks book. They shifted their focus onto the European Financial Market System which managed to minimise the impact of the credit crunch through its well established covered bond program. Credit Crunch Credit crunch is explained as a period of increased non price credit rationing beyond that of typical recessions whereby credit has become less affordable or less available. Owens, Schreft and Stacey,( 1995). To banks, this will result in a funding liquidity risk as “the possibility that over a specific horizon the bank will become unable to settle obligations...
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...The European Economic Crisis A Paper Submitted to Webber International University In partial fulfilment for the Bachelor of Science Degree in Finance By: James Holt Date: November 26, 2013 Course: ENG112-1 Semester: Fall 2013 Instructor: Professor Nancy Davis Word Count: 2663 The European economy is in turmoil. The credit crunch in 2008 caused chaos throughout the global and European economic systems and highlighted the negligence of not only governments but also the financial systems in place. In the highly praised publication the Economist the author G. Tett writes “The European economy is in the midst of the deepest recession since the 1930s, with real GDP projected to shrink by some 4% in 2009, the sharpest contraction in the history of the European Union. Although signs of improvement have appeared recently, recovery remains uncertain and fragile” (Tett, 2013). A publication of this magnitude publishing this shows the utter chaos in the European Economy. The economy of all countries within the Euro has been greatly affected; it has also affected the surrounding countries around the Eurozone. The stronger European economies have recovered a great deal these include...
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...“balance-sheet adjustment” where the “erosion of capital bases” led to a fall in demand as people grew more cautious (Okina, Shirakawa, & Shiratsuka, 2001). Yoshikazu (1993) discusses the stagnation as caused by a “stock-adjustment recession”, in which he attributed reduced demand to not just asset deflation, but also excess inventory. Simply put, the frenzied buying during the boom logically meant a subsequent decline in demand, as consumers were not willing to buy more so soon. Another popular theory behind Japan’s lost decade concerns a credit crunch, i.e. a supply-side factor. While some thought that there was a credit crunch in that banks needed to reduce size of loans to meet the equity capital regulations (Yoshinori, 2000) following the bursting of the bubbles, Yoshikawa (2002) maintains that it was more of the fall in demand for bank loans due to declining profit opportunities than the reluctance of banks to lend money. In fact, this “credit crunch” was only shown to have taken effect circa 1997, following a huge fall in banks’ capital (Watanabe, 2005). Hence, this theory could not have been integral in causing the stagnation. The government’s failures in efficient and effective policies also contributed to the stagnation. Hutchinson, Westermann & Ito (2006)...
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...PESTEL analysis – Political Factors • Increasing globalization, presents a challenge as well as an opportunity to Sainsbury's. The challenge will be to compete against unknown forces and to source the best quality/financially viable products from world over. Sainsbury's can enter the markets of emerging companies through joint ventures or partnerships to explore these new markets, although it does not have any plans on the horizon to do so. Development to the non-domestic market, means towards a "global localization" (Shanghai; Bangladesh) • The on-going investigation of price fixing amongst the big four retailers within the UK can have some negative impact to the industry in general and Sainsbury's in particular, as it is at the forefront of this allegation (Rigby 2008). Although Sainsbury's is very well established among consumers, these allegations can lead to a negative public image, as the consumers might feel cheated. • In the UK, the Government is to decrease the rate of corporation tax from 30% to 28%, which will save big companies like Sainsbury's significant sums of money (HM Treasury 2008). For employment legislations, the government encourages retailers to provide a mix of job opportunities from flexible, lower-paid and locally based jobs to highly skilled, higher-paid and centrally-located jobs (Balchin, 1994) aim to recruit and retain the best people, from backgrounds that reflect the communities we serve; “you can” program PESTEL analysis – Economic...
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...The housing market in UK has been effected in many different ways, from immigration to shortages of homes I am looking to discuss these factors in depth. The demand of houses depends on what the interest rates are, as this will decide whether the buyer will be able to get a mortgage at a cheaper rate. The lower the interest rate the more demand of houses and the more demand in houses the higher the price. The supply will depend on what the price of the house is. The higher price seller will get more people would want to sell it. This is short term as when more houses appear on the market it will lead to a reduction in price if there isn’t enough demand. A possibility to why the demand is high could be the issue of immigration. Immigrants are placing huge amounts of pressure on the housing market driving up rents and property prices. The massive influx is also forcing the government to dramatically revise its house building targets, putting greenbelt land at risk. On average 100,000 new houses will be needed every year over the next decade to cope with immigration. Foreigners are also placing demand on council and other social housing taking a minimum of 10,000 properties last year. The UK has seen several changes in the property market over the last decade. Changes in Government policies and cuts have influenced many changes in the property market. The government has tried to keep up with the demand but as the population grows there are more people in the economy and...
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...services that are specifically tailored to the needs of personal customers and micro, small and medium scale enterprises. The company currently has nine(9) department which comprises of the Human Resource, Business Development, Internal control, Risk and Compliance, Marketing and Service quality, Credit department, Information Technology, Finance and Administration, Operations, Legal, Small and Medium Enterprises(credit) department performance There had been mixed up in the jobs descriptions of four departments that is Marketing and Service quality, Business Development, SME’s and the credit departments. Mostly both managers at Marketing and Business development ends up taken each other’s role. There has also not been clearly defined role or job description for both Head of SME’s and Credit manager. Again Relationship officers at various branches currently reports to these four departments. They are seen as credit officers who does clients loans appraisal and recoveries and reports to both the head of SME’s and the credit manager, as marketing officers thus sell products of the uniCredit to prospective clients and reports to the marketing manager, as business development officers, who does the account management of clients and reports to the business development manager. This...
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...Innovation idea Innovation is defined as “An idea, practice or object that is perceived as new by an individual of unit of adoption” (Rogers, 1985, p11).” Lueck and Katz (2003) agree with Rogers by also arguing that innovation is generally understood as the successful introduction of a new thing or method. They also said “innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services”. Innovation therefore involves creativity but the two are not the same. The innovation should bring new product, improve quality and enhance customer service. Innovation begins with creative ideas as suggested by Amabile et al (1996) who define innovation as “the successful implementation of creative ideas within an organisation”. Authors like Byrd (2003) formulated equation to differentiate innovation and creativity: Innovation = Creativity * Risk Taking. From the equation there is clear difference between creativity and innovation. In Economic perspective innovation is viewed as introduction of new good, new market, new methods of production, new source of raw materials and new organization of any industry such as monopoly. Schumpeter (1934). The data mining teaching tool to illustrate association to level three students is an innovation because it is a new application which is unique and has not been developed according to the research carried out. A number of data mining software for academic purpose have so...
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...1) Essay 1 20% Answer the following question: Describe and discuss the internal and external pressures on organizations to create and market new products. (Use examples to illustrate your reasoning.) Requirements/Expectations (See Bb for some advice and tips) • Word–count 1200 (+/- 10%), plus the completion of an essay plan check-list (See Bb). • Minimum of five referenced academic sources of information (e.g. publications in academic journals/academic textbooks – DMU Library holds many such on e-databases). Do not include Wikipedia as a source. • Essay format please. See handout given in tutorial one if unsure. • Spacing: 1.5 lines • Typeface: Arial, 12 points Submission date: Weeks 9 & 10 in your tutorial. Submit to Turnitin prior to the tutorial and attach the Turnitin originality report to the hard copy.* ---------------------------------------------------------------------------------------------------------------- This essay I am writing is based on the question of ‘describe and discuss the internal and external pressures on organizations to create and market new products’. (if organization was to bring out a new product how would the internal factors and external factors help develop the product and talk about the good and bad points about both of them) Also talks about how reliable are the sources Introduction: In my portfolio I will consider what factors influence an organization for creating new products within...
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