Corporate Finance Advisory

Innovation

Generating and maintaining a creative environment within the organisation is a key feature of innovation. This can be created through a number of dimensions:

1) Leadership : Senior management encourages exploration of new ideas which challenging existing ways of doing things.

2) Culture : Managers are required to change their ways of thinking, eg, viewing a failure as an important of learning process.

3) People : Organisation need to encourage a team-based approach that create a sense of ownership & participation.

4) Structure : Managers need to embrace new ways of working.

5) Communication : Management encourages greater openness in communication between staff, so that ideas can be shared more freely.

https://www.bbc.co.uk/news/business-67799713

Porter's Competitive 5 Forces (External analysis]:
''Influence the state of competition in an industry''

This model helps organisation to understand the factors affecting profitability in a specific industry.

1) Entrants Threats:

- Investment requirement (ie capital, ownership %, etc)
- Scale of economies
- Switching cost
- Access to distribution channels
- Cost advantages of existing products

2) Bargaining Power of Customers:

- Quantity
- Quality
- Price

3) Bargaining Power of Suppliers:

- RM cost
- Supply chain
- Availability of resources
- Switching cost

4) Substitute Goods or Services:

- Availability of local products,
- Service after sales
- Price of similar products in the local market

5) Rivalry:

- Market growth
- Capacity
- Exit barriers
- Cost structure (ie high /low fixed costs, scale of economy, etc)

Porter's diamonds [External analysis]: The competitive advantage of nations.

The model is emphasis the competitive advantage of an industry or business that makes work better in a region or a country.

Porter has described 4 key models, as follows:

1) Firm strategy, structure and rivalry
Strategy:
- Finance strategy either equity, debts or both.
- Products strategy strategy in the market (ie cost or differentiation)
- Quality strategy
Structure:
- What company is excelled at?, business presence !
Rivalry:
- Little / tough domestic competition, customer prefer local or Int'l goods, etc.

2) Demand condition
- Market segmentation, customer demand style, rate of growth, support of exporting, etc.

3) Factors condition
- HR skills [High / low expertise, motivation, industrial relations]
- Knowledge and level of education.
- Physical resources [ Land, minerals, climate, location]
- Capital [Minimum amount required, restriction on foreign investment, etc]
- Advance factors [Modern digital communication, highly educated personnel, research laboratories, etc]

4) Related and supporting industries
- Domestic suppliers, supply chain management, development of infrastructure, free & open of information flow, etc]

PESTEL [External analysis]

* Political
- Govt. stability
- Taxation policy
- Social welfare
- Law & regulations
- Entry barriers
- Transparency

* Economic
- Globalisation
- Exchange rate
- Interest rate
- Inflation
- Unemployment
- Business life cycle
- Govt. spending
- Productivity & GDP

* Social/ culture / demographic
- Age distribution
- Income distribution
- Size population
- Location
- Level of education
- Culture life style
- Attitude to work
- Social mobility
- Consumerism

* Technological
- Govt. investment in R&D
- Competitors investment in R&D
- Speed technological transfer
- New discoveries: products or method of production
- Development in other industry
- Skills & expertise
- Communication with external clients

* Ecological / environmental
- Sustainability issues, ie natural resources, energy, etc.
- Pollution & climate change
- Green issue
- Disasters
- Waste recycling
- Natural capital [weather, rains, Arable land, etc]

* Legal
- Consumer protection law
- Environmental law
- Company law
- Competition legislation
- Health & safety regulations
- Data protection regulations
- Criminal law

Business strategy analysis

There are external and internal business strategy analysis.

External analysis: such as,

- PESTEL
- Porter's Diamonds
- Porter's 5 forces

Internal analysis: such as,

- Resource audit 9M's
- Core competences - Kay's 3 sources
- Value chain analysis
- Value system
- CSF - KPIs
- BSC matrix
- Lifecycle
- Benchmarking
- Ethics: PIPCO, ASIFS

The list of countries with low corruption

UK house price growth slips to six-year low amid Brexit uncertainty:

House prices grew at the slowest rate in almost six years in November as wavering consumer confidence before the UK’s departure from the EU took its toll on the housing market.

Prices grew by only 0.3% in the year to November, down from 1.5% in October, according to the Halifax house price index, published on Friday.

UK house price growth slips to six-year low amid Brexit uncertainty Prices grew by only 0.3% in the year to November, down from 1.5% in October, Halifax says

Royal Bank of Scotland will transfer business that accounts for around 20% of its investment banking revenue to Amsterdam if the UK leaves the EU with no exit deal, the bank said on December 6.

RBS plans no-deal Brexit shift for investment bank Government-owned bank says 20% of investment bank revenues could go to Amsterdam

https://www.economist.com/bagehots-notebook/2018/11/15/britains-government-slides-into-chaos?fsrc=scn/fb/te/bl/ed/britainsgovernmentslidesintochaosstrongandstable

Britain’s government slides into chaos Theresa May’s Brexit deal provokes cabinet resignations and speculation of a leadership challenge

SAP acquires Qualtrics for $8bnhttps://www.ft.com/content/3ecfff5e-e613-11e8-8a85-04b8afea6ea3

SAP acquires Qualtrics for $8bn Acquisition of survey software company is latest step in move to shift to cloud

Value-Added-Tax (VAT) in Saudi Arabia:

Value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is imposed at each stage of the supply chain from the production and distribution to the final sale of the good or service, as illustrated below:

The consumer pays the VAT cost on purchased goods and services. Businesses pay the government the VAT collected from their customers’ purchases and refund the VAT they paid to their suppliers.