Financial Problems Faced Essay Example Pdf

The business has been significantly evolved over the years. A business has different option to grow either it grow nationally or globally. There was a time when businesses were run domestically, entrepreneurs mostly concentrates on handling day to day business. Then owners find the need of expansion and start looking into different ways of business expansion. These methods includes move from domestic to other market, franchising, diversification (horizontal or Vertical), partnership, forming alliance, merger, acquisition or expand globally to capture new market and expand its share. There is always been trade off in selection of appropriate growth strategy. The fastest way to become a global player is to go online. The charisma of internet has changed the way of doing business. Business development brings significant growth into the organisation. Over the last two decades business has shown significant interest in foreign direct investment. Foreign direct investment can be defined as investment is made outside of country into an overseas country to secure new opportunities of growth and to improve the efficiency of operations. BSKYB is looking for investment in Pakistan and that could bring a number of benefits for both countries. It brings fresh capital into the Pakistan, will improve balance of payments, growth in economy and many associated benefits such as increased employment, introduction of technology, competitive advantage and enjoy benefits of tax heaven of developing countries. There are some internal factors that trigger FOREIGN DIRECT INVESTMENT such as home country economic condition, saturation of market demand, high production cost, fiscal and monitory policy. Foreign investment in Pakistan has been increased over the years. The primary benefit to the BSKYB is differentiation from national companies. The reasons to invest in Pakistan also include the current structure of national industry, demand, knowledge, productivity, growth, profit and economy of scale, tax benefits and Government grants and subsidies. Pakistan will receive benefits of foreign investment, reduction in unemployment, quality products, new technology, and tax; improve economy and improvement in balance of payments. A foreign investment improves the productivity and competition in overseas country and set new standards of doing business. https://www.tanzaniagateway.org/docs/Kabelwa_FOREIGNDIRECT INVESTMENTImpactsonTanzaniaEconomicDevelopment.pdf BSKYB must consider the fact that level of growth in income, prevailing market, technological or financial requirements. A detail analysis of market condition is very much necessary before investing into Pakistan. According to a study was taken by Government in 2006, there are more than 46.4 million cellular users in Pakistan, WLL Subscriber are 1.42 million, fixed telephone users were 5.1 million. There is still very much potential for growth in Pakistan. https://www.pakboi.gov.pk/pdf/IT%20&%20Telecom.pdf

Incentives provided by Pakistan to attract FOREIGN DIRECT INVESTMENT

Pakistan government has taken a number of measures to attract foreign direct investment. Which are tax relief, the FYA will be set off against the assessed statutory income of the company, liberal investment policy, liberal foreign exchange, and skilled labour, no restriction on royalty payment, import duty and less expensive land and building. In recent times government of any country pays specific attention to tax relieves, relaxing import duties and providing tax heavens to attract and retain foreign investments. https://investinpakistan.org/investment-climate.php

Deterioration of FOREIGN DIRECT INVESTMENT in Pakistan

Law and order situation in Pakistan has tremendously affected by terrorist activities and war against terrorism. From July to September 2009 the FOREIGN DIRECT INVESTMENT has fallen by 29%. Investors are hesitant to invest in Pakistan due to security concern. Local investors in Pakistan also moving their businesses to Bangladesh, India and Singapore. Although Pakistan government has taken different measures to attract foreign direct investment. There is still 10billion dollars projects are available in Pakistan. (article by Imran ali Khudi 10/10/09) https://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/20-Oct-2009/FOREIGN DIRECT INVESTMENT-down-by-29pc-in-three-months Pakistan is facing serious problems regarding foreign investment which is result of imbalance payments, law and order situation, political instability and economic downturn, slow GDP and high unemployment. Hence Pakistan is struggling at every step towards growth. The major concern for any investor is capital structure of host country that is significantly affected by the host country borrowing rate and funding availability to the investor. The shareholder of BSKYB will require higher return in investing in Pakistan. As Pakistan is facing serious crises in terms of basic infrastructure for any business. The cost of capital rise as result of high risk. There is always a question that why company pursue to invest in international market. There are many factors that attract foreign direct investment. In 2005-2006, Pakistan received $1.8 billion and in which telecom sector received $1824 million FDI.

Mode of Entry

BSKYB will also have to assess mode of entry available into Pakistan. As every mode to enter into foreign market has considerable impact on BSKYB long term strategy. The choices available to BSKYB to enter into Pakistan market are Joint venture, licensing and direct investment. The selection of method depend on capital, level of risk, market condition, and socio-economic factor, legal and political condition of Pakistan market. https://books.google.co.uk/books?id=aO3hxm-s-uoC&pg=PA167&dq=mode+of+entry+in+fdi&hl=en&ei=v2sATPd_lYjTBJGDocwD&sa=X&oi=book_result&ct=bookhumbnail&resnum=1&ved=0CCsQ6wEwAA#v=onepage&q=mode%20of%20entry%20in%20fdi&f=false BSKYB has to perform a detail analysis to invest in Pakistan and should alternative options. BSKYB can look into investing in Europe. But the recent economic recession has seriously affected the European economic conditions and put them on the edge of solvency. BSKYB is also facing serious problems in UK as demand has fallen dramatically over the couple of years.

Research Questionnaire

What is foreign direct investment? Evaluation of foreign direct investment strategic fit with BSKYB long term strategy? Critically appraisal foreign direct investment in Pakistan?

Evaluate the capital structure used by BSKYB and ways to obtain long term debts?

Explain initial cost require by BSKYB to operate in Pakistan? Explain the foreign direct investment requirements? Explain the cost/benefit analysis of foreign direct investment in Pakistan? Discuss the risk factors involve in foreign direct investment in Pakistan to BSKYB? Explain foreign direct investment macro-micro environmental effect on Pakistan? Explain, assess and select mode of entry use by BSKYB? Explain different barriers involve in foreign direct investment to BSKYB? Explain social-environmental impact on marketing strategy? Explain social-environmental impact on HR policy? Evaluate strategic choices available to BSKYB to operate in Pakistan? (Merger/Acquisition) organic growth and growth by acquisition. Perform BSKYB Stakeholder analysis?

Research Objectives

To critically assess the fdi development To Evaluate and analyse the BSKYB long term strategy align with foreign direct investment in Pakistan To evaluate different methods use to appraisal financial investment. To critically evaluate and assess different types financing method in Pakistan. To Critically evaluation of capital requirement, operational cost and BSKYB required rate of return. To asses and analyse level of investment required by BSKYB. To critically analyse the benefits of fdi to BSKYB. To critically evaluate financial, operational and strategic risk to BSKYB in fdi in Pakistan. To evaluate the political, economic, legal, environmental, legal etc impacts face by BSKYB to invest in Pakistan. To critically analyse and asses mode on entry and its cost/benefit to BSKYB. To asses internal and external barriers involves in fdi in Pakistan. To analyse overseas impact on BSKYB marketing strategy. To analyse problems in recruitment, training and development and establishing human resource strategy. To critically evaluate different growth options available to BSKYB in Pakistan and analyse organic growth and growth by acquisition. To analyse the shareholders, employees, government etc influence and interest in fdi in Pakistan.

Aims and Objectives

The objective of this research is to Perform pestel analysis of Pakistan, Assessment of comparative advantage and absolute advantage to bsb. Assessment of financial problems faced by bsb. Strategic objectives Operational objectives

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