Report Harvard Case Solution & Analysis

Report Case Solution

Challenges faced by exporters and importers for financing the global supply chain

It is expected that trade and financing the supply chain involves several challenges as trade and supply chain finance are poorly implicit areas of banking and finance. It needs appropriate level of finance, several regulations, and compliance requirements due to the economic and financial crisis, which affected banking and financial sector significantly.

In addition to this, there is also a big challenge for importers to understand the GAAP and their poor understanding of GAAP could not create significant value and economy. Moreover, both importers and exporters are also facing the challenge of changing market needs and it is difficult to predict market needs precisely. Therefore, significant risk is involved because there is a continuous change in market needs and demands. (Cristina Gimenez, N.A)

 The other major challenge facing exporters and importers is of capacity, concentration and constraints that have affected the financing global supply chain as only small number of banks and financial institutions are operating for trading purpose. Although, many small financing firms also operate in the global supply chain financing industry but risk involved with these small firms is high. Along with these issues, importers and exporters also faced the challenge of complex documentation requirements, which are difficult to understand and impossible to comply with all requirements in first go. (Malaket, 2014)

Several methodologies could be used to deal with these challenges such as using financial instruments, developing managers of international standard, implementation of effective information system, and developing relations with local suppliers that are currently dealing with global dealers. In addition to this, developing a global mindset along with supply chain analysis could also help in this respect. In addition to this, using services of third parties and using Letter of Credit could also be used to overcome the challenges that importers and exporters faced in financing the global supply chain.

Impact of Cash Conversions Cycle of financing needs

It is expected that every firm needs cash to run its operation and support its daily working capital requirement in order to run their businesses effectively. Cash conversion cycle indicates how long a firm or a business takes to recover its cash. A greater cash conversion cycle creates adverse situations for businesses, as it creates liquidity position and firms run out of cash, which itself is a worse condition  run daily operations effectively. Therefore, in order to meet the financing needs firms shorten their cash conversion cycle by collecting receivables early and delaying payables. By doing this, firms support daily operations in a cheaper way as it is also considered as a cheaper source of financing.

When is it wise to perform a correlation analysis and why?

The correlation analysis explains the relationship between two different factors. It is dependency of one variable on another. The correlation analysis should be performed in order to examine the relationship between the factors affecting the financial of the global supply chain. The right time to acquire the contribution of the correlation analysis is when the global supply chain sets its trends and wants to know the risks associated with each of the financing model. The correlation analysis will lead the information that will be useful for the consideration of funds from different financing activities. The correlation analysis can also be applied to examine the relationship between the funds and the social welfare of global supply chain.....................

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.

Share This


Save Up To




Register now and save up to 30%.