Repot based on a real life case study or scenario. Students are encouraged to select a particular international business isue affecting their organisation (where relevant)

INTERNATIONAL BUSINESS

2006

Table of Contents

Table of Contents ii

Executive Summary iii

I . Statement of the Problem 1

II . Literature Review 1

II .1 Internationalization and International Finance 1

II .2 UK and the Euro 2

II .3 UK Retailers 2

III . Methodology 3

IV . Discussion : Marks and Spencer and Euro Adoption 4

IV .1 Corporate Background 4

IV .2 Mark Spencer and the Euro 4

IV .2 .1 Controversial Decision 4

IV .2 .2 Preparation 5

IV .2 .3 Impact of Euro

on Marks and Spencer Business 6

V Conclusion 7

VI . Recommendation 7

Bibliography

Executive Summary

In national level , we face the fact that U .K . has not adopted Euro as the country 's currency , replacing current Pound Sterling . This is because the country 's Pound Sterling has maintained a good value as a currency . In addition , the country should pore over the advantages and disadvantages not only in the short term but also for long-term basis

However , in corporate level , the adoption of Euro is demanding . This is because UK-based multinational retailers like Marks and Spencer face the situation where their outlets scattered throughout the European countries in which some of them use Euro as currency

Concerning the situation , Marks and Spencer decides to welcome Euro as new currency with a positive attitude . The company recognizes the abundant opportunity that lies beneath the phenomenon and prepared for the change many years before the Euro was introduced . We will find later in this that the company spent millions of pound sterling to accept payment in Euro

International Business

Statement of the Problem

Performing business in international markets possesses significant differences compared to doing business in the local markets . For instance , local managers -especially managers of developed countries- are usually accustomed to market economy , the concept of private property , legal assurance and many other characteristic of an advanced economy . Nevertheless , business in developing countries might be characterized with centralized economy , uncertainty of property rights and other types of instability

The differences might be due to cultural , legal , political and economic environments of various countries . Going abroad , managers would have to think of factors they never have to consider before . Hansen Mowen (2003 ) stated that doing business in a global environment would require management to `shift perspective

Literature Review

II .1 Internationalization and International Finance

Financially , a company would have to face increasing uncertainty if they are to expand their market globally . Exchange rate issue is one of the most popular issues . Most countries today are using the free-market currency where the value of money fluctuates according to market conditions . This should be a major concern for a company who wish to expand its business abroad . Exchange rate fluctuations can either magnify corporate profit or take it away instantly

Financial experts are discussing this matter endlessly to find a possible solution for the increasingly important problem . For example due to this exchange rate issue , many multinationals are now designing a centralized cash management . This effort is performed to...