Financial Concepts for Leaders Final Paper

Financial Concepts for Leaders Final Paper

Recommendations

As the Chief Financial Officer of a big company I would advise the CEO of the company to choose the option of emerging into a new market. Entering a new market can be very effective for a business’s success and growth. It will take a lot of hard work, discipline, and research but in the end it will pay off. Expanding into a new market is a risk the company should take. When something is not working change should occur to get the company back in the right direction towards success.

It will be very appropriate for us to do very good research and to make sure we have all the proper resources to be successful when entering this new market. I think it is important to actually map out what our product is and who we will be targeting. This seems very simple but when entering a new market we will have to meet the needs of all our target customers and also consider prices and locations to where our products will be sold and bought. Researching the market will also help the company out a great deal. Having an extensive understanding of the market, its competitors, risk, and growth is key when entering a new market. I think it is also key to continue to look for ways to expand the company even more in the future once we have taken over this market.

The option of emerging into a new market would be the best for our company because tomorrow does not seem promised for us with the rate we are going. No, we are not a failing business but we are not that successful if one looks past the annual sales revenues. In the past the strategy for our success has been high cost and low margin proposition, but it now has left us in a weaker financial situation. Why continue to have high product turnover rates? We are not making money if our product is selling for close to or the same price it cost our company to get and also maintain the product. Eventually there will be no profit made because the money that comes from selling the product will be put right back into making it. Moving into this new market is potentially promising.  The market is very new, has high growth, and possibly very profitable. Since the market is fairly new there are not many competitors we initially have to worry about, this makes it our market to take over. Starting fresh in a new and upcoming industry means we get a competitive advantage over those who are seriously considering entry to the market as well if we go ahead and take initiative before they do.  Doing so we will attract all the target customers to our company and begin building relationships with these people so that when these other corporations decide to enter the market we will already have our customer base and continue to gain more.  I definitely feel as if taking a risk with our company and switching up markets that will help us profit is not a bad option. Since I was a young kid growing up my parents always instilled in me that risk taking is not always negative and it is sometimes better to take risk when things are not working out like they should. Taking a risk is giving our company the chance to succeed and without taking this risk, our company is not promised. Every risk taking is a lessoned learned and this could lead us down the right path. There is always going to be a what if factor no matter what we chose to do. So what if we take a risk of entering the new market? What if this ends up being the best decision we ever made? Our company will never know unless we make a decision.