International Banking and Finance
PharmSave Ltd (PSL) expansion to India and Philippines
You have been appointed as an advisor to PharmSave Ltd (PSL), a prominent pharmaceutical manufacturing company located in Malaysia. PSL owns several reputable vitamin product lines that are safeguarded by international patent rights laws.
Given your expertise in international finance and banking, you are tasked with aiding PSL in expanding its current operations into various foreign markets.
PSL utilizes a well-connected international network of agents for its trade activities, except in Australia and Japan, where it relies on its subsidiaries to distribute its products. Additionally, the company’s ecommerce section has recently demonstrated substantial improvements in international product sales.
In the past, PSL used MYR as its preferred currency for international trade. PSL allowed three months to settle payments with its foreign customers. However, the company was given four months to settle invoices with its suppliers. Currently, all imports are invoiced in MYR, and all suppliers have been requested to do the same.
PSL is now contemplating a change in this policy. They believe that relaxing this approach could result in a diversified currency portfolio, which, in turn, might help the company mitigate some of the foreign exchange risks.
PSL has intentions of expanding its presence into India and the Philippines by creating two subsidiary companies. In India, they aim to establish a network of small retail outlets within major supermarkets. The majority of products for these outlets in India will be shipped from a proposed manufacturing facility in the Philippines.
Currently, the company procures certain raw materials from the Philippines. A feasibility study conducted last year revealed that setting up a manufacturing plant in the Philippines would result in significant cost advantages. Consequently, PSL will construct a state-of-the-art manufacturing facility in the Philippines to produce some of its vitamin products using local labor and materials. This move will enable the Philippines operation to meet the increasing demand in South Asia.
PSL has a policy of reviewing the cash flow situation of all its subsidiaries every three months and sending any surplus cash balances to the head office in Malaysia. At present, excess cash is transferred whenever the subsidiary’s cash balance exceeds the permitted limit. As a result, the parent company in Malaysia sends cash to the subsidiaries when they face a cash shortage.
Given the information provided above, you are tasked with creating a management advisory report that addresses the following concerns.
Country Analysis – 30 points
Read Chapters 13 and 14 of your textbook and complete the following
Collepals.com Plagiarism Free Papers
Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS
Why Hire Collepals.com writers to do your paper?
Quality- We are experienced and have access to ample research materials.
We write plagiarism Free Content
Confidential- We never share or sell your personal information to third parties.
Support-Chat with us today! We are always waiting to answer all your questions.
