week 4 assignment

Topics: United States dollar, Currency, Foreign exchange market, Risk, Pound sterling, Dollar / Pages: 2 (304 words) / Published: Nov 17th, 2013
Week 3 Team assignment
Kameelah Howard
FIN 370
November 4, 2013
Tony Moses

Week 3 Team assignment
Financial planning is the steps or goals used by a company to accomplish financial goals and prepare for future projects or investments. Starbucks has to have a very detailed financial plan in place especially when planning to expand internationally. When conducting business internationally there are some risk factors that do not apply when conducting domestic business. Starbucks has to first consider foreign exchange rates, political climates and events, and international trade laws are just a few. Another risk factor would be being able to trust the people you’re dealing with. Will the supplier be able to deliver the same quality product that your domestic businesses are supplying? When operating business in foreign countries a business wants to be sure that the product will remain the same quality especially when Starbucks is putting their name on the product. They expect the product to be the same as they have been producing domestically. Another thing to be considered by Starbucks is the environmental risks. Some companies have stricter laws pertaining to permits and document filing. It may be more difficult for Starbucks to get their plan approved in a foreign country. The final thing that needs to be considered is the financial risk. At one time, the U.S. dollar was king and traded favorably against all other currencies as the global reserve currency. “In recent years, the dollar has lost some of its ground to other currencies. If you own a U.S. company engaging in business overseas, the risk and expense involved in converting dollars to the local currency may fall on your shoulders where it once did not.” (Morello, 2013). Starbucks should consider operating in a country where they can bank with the same bank internationally as they bank with domestically.

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