BU3019c Enterprise Finance Essay Example | Topics and Well Written Essays - 1250 words

BU3019c Enterprise Finance - Essay Example No matter the size of the business, big or small, banks can be the solution to financing. A bank can also finance a project based on the business needs. For instance, if a large successful business needed a new warehouse, a bank might advance cash. Big business generally have banks issue stocks or bonds on the market to raise money for their loans. This can generate money, but if the bank or stock fails, the results are disaster. For example, Northern Rocks Share price crashed after credit freezes in the interbank money market. Walayat (2007) explains: Northern Rocks Share price crashed by 30% today as the mortgage bank sought emergency funds from the Bank of England due to the credit freeze in the interbank money market which Northern Rock heavily relies upon. Panic gripped savers forming long lines outside Northern Rock Branches throughout the UK to withdraw funds. Investors dumping the stock on the market open where even unsubstantiated rumors of takeovers and white knights failed to halt the crash in the banks share price. The tick chart for the Northern Rock bank decline is shown below: The drawbacks for bank loans are two fold. First, most banks require collateral. If a party defaults on a bank loan, the bank will foreclose. Secondly, a business must have good credit. Without almost perfect credit, banks will not even consider giving a business a loan. The upside is most banks have lower interest rates than other means of investment. For example, (Simple Pound, 2007) reports that The Bank of England has a 5.5% interest rate. This is quite low considering credit cards charge up to three times that figure. The chart below shows the highs and lows in interest rate at The Bank of England over the years. Investments can be used in various ways to finance a business (Loeb, 2007, 10). An international corporation, such as Microsoft, can sell stocks to generate financing for their

Macro & Micro Environmental Analysis Essay Example | Topics and Well Written Essays - 3750 words

Macro & Micro Environmental Analysis - Essay Example This report stresses that considering the analysis of the above five industry forces, the hotel industry holds moderate to high level of attractiveness as three out of the five forces are in beneficial state and the threat of new entrants is also not high but moderate. Only adversely positioned industry force is the high rivulet levels within the industry and companies who specialize in their marketing and differentiating strategies and build strong brands will be able to counter this force as well. Thus, organisations with high internal capabilities will be able to enjoy strong profits within this industry. This paper makes a conclusion that it can be noted that the organisations and its performances are affected by a myriad of factors in its macro and micro- environments. While the factors within the micro environment is within the reach of organisational influence, the macro factors tend to affect the organisation but remain beyond the control of the company. Organisations can assess the conditions of its macro environment through application of SPECTLE analysis while the microenvironment can be assessed through stakeholder analysis or Porters five force concepts. While these analysis will only yield an insight in to the conditions of the environment, its the strategic responses which the company makes in relation to the environmental conditions which will decide how successful the company be in surviving and thriving in the turbulent business environment.