HEDGING CURRENCY RISKS AIFS PDF

Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable organizations. To make a detailed case analysis, student should follow these steps: STEP 1: Reading Up Harvard Case Study Method Guide: Case study method guide is provided to students which determine the aspects of problem needed to be considered while analyzing a case study. It is very important to have a thorough reading and understanding of guidelines provided. However, poor guide reading will lead to misunderstanding of case and failure of analyses. It is recommended to read guidelines before and after reading the case to understand what is asked and how the questions are to be answered. Therefore, in-depth understanding f case guidelines is very important.

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Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable organizations. To make a detailed case analysis, student should follow these steps: STEP 1: Reading Up Harvard Case Study Method Guide: Case study method guide is provided to students which determine the aspects of problem needed to be considered while analyzing a case study.

It is very important to have a thorough reading and understanding of guidelines provided. However, poor guide reading will lead to misunderstanding of case and failure of analyses. It is recommended to read guidelines before and after reading the case to understand what is asked and how the questions are to be answered. Therefore, in-depth understanding f case guidelines is very important. It is said that case should be read two times.

Initially, fast reading without taking notes and underlines should be done. Initial reading is to get a rough idea of what information is provided for the analyses. Then, a very careful reading should be done at second time reading of the case. This time, highlighting the important point and mark the necessary information provided in the case. In addition, the quantitative data in case, and its relations with other quantitative or qualitative variables should be given more importance.

Also, manipulating different data and combining with other information available will give a new insight. However, all of the information provided is not reliable and relevant.

When having a fast reading, following points should be noted: Nature of organization Nature if industry in which organization operates. External environment that is effecting organization Problems being faced by management Identification of communication strategies. Any relevant strategy that can be added. Control and out-of-control situations. When reading the case for second time, following points should be considered: Decisions needed to be made and the responsible Person to make decision.

Objectives of the organization and key players in this case. The compatibility of objectives. Sources and constraints of organization from meeting its objectives. After reading the case and guidelines thoroughly, reader should go forward and start the analyses of the case. There may be multiple problems that can be faced by any organization. Secondly, after identifying problems in the company, identify the most concerned and important problem that needed to be focused.

Firstly, the introduction is written. After having a clear idea of what is defined in the case, we deliver it to the reader. It is better to start the introduction from any historical or social context.

The challenging diagnosis for Hedging Currency Risks At Aifs and the management of information is needed to be provided. However, introduction should not be longer than lines in a paragraph. As the most important objective is to convey the most important message for to the reader.

After introduction, problem statement is defined. However, the problem should be concisely define in no more than a paragraph. After defining the problems and constraints, analysis of the case study is begin. In addition, it also identifies the weaknesses of the organization that will help to be eliminated and manage the threats that would catch the attention of the management. This strategy helps the company to make any strategy that would differentiate the company from competitors, so that the organization can compete successfully in the industry.

The strengths and weaknesses are obtained from internal organization. Whereas, the opportunities and threats are generally related from external environment of organization. Moreover, it is also called Internal-External Analysis. Unique resources and low cost resources company have. Unique selling proposition of the company. Activities that can be determined as your weakness in the market. Factors that can reduce the sales.

Interesting trends of industry. Local events. Product and services quality standards Threat from changing technologies Weakness that threaten the business. Following points should be considered when applying SWOT to the analysis: Precise and verifiable phrases should be sued. Prioritize the points under each head, so that management can identify which step has to be taken first.

Apply the analyses at proposed level. Clear yourself first that on what basis you have to apply SWOT matrix. Make sure that points identified should carry itself with strategy formulation process. Pest analysis is very important and informative. It is used for the purpose of identifying business opportunities and advance threat warning.

Moreover, it also helps to the extent to which change is useful for the company and also guide the direction for the change. In addition, it also helps to avoid activities and actions that will be harmful for the company in future, including projects and strategies. To analyze the business objective and its opportunities and threats, following steps should be followed: Brainstorm and assumption the changes that should be made to organization. Answer the necessary questions that are related to specific needs of organization Analyze the opportunities that would be happen due to the change.

Analyze the threats and issues that would be caused due to change. Perform cost benefit analyses and take the appropriate action. Pest analysis POLITICAL: Next political elections and changes that will happen in the country due to these elections Strong and powerful political person, his point of view on business policies and their effect on the organization.

Strength of property rights and law rules. And its ratio with corruption and organized crimes. Changes in these situation and its effects. Change in Legislation and taxation effects on the company Trend of regulations and deregulations.

Effects of change in business regulations Timescale of legislative change. Exchange rates fluctuations and its relation with company.

Fluctuation in unemployment rate and its effect on hiring of skilled employees Access to credit and loans. Effect on organization due to Change in attitudes and generational shifts. Standards of health, education and social mobility levels. Its changes and effects on company. Employment patterns, job market trend and attitude towards work according to different age groups.

Social attitudes and social trends, change in socio culture an dits effects. Religious believers and life styles and its effects on organization Other socio culture factors and its impacts.

This will help the manager to take the decision and drawing conclusion about the forces that would create a big impact on company and its resources. In this model, five forces have been identified which play an important part in shaping the market and industry.

These forces are used to measure competition intensity and profitability of an industry and market. These five forces includes three forces from horizontal competition and two forces from vertical competition. However, the new entrants will eventually cause decrease in overall industry profits.

Therefore, it is necessary to block the new entrants in the industry. High capital requirement.

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Hedging Currency Risks at AIFS

That means, with the current spot rate of 1. Comparing the results of the table shows the advantages and disadvantages of each strategy. In the case of a strong dollar 1. In total the costs still sink by 3,, because the effect of the lower spot rate compensates the premium.

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Hedging Currency Risks at Aifs

What gives rise to the currency exposure at AIFS. Get Your Custom Essay on Hedging Currency at AIFS Get custom paper Currency exposure or currency risk is the type of risk that an individual or a company faces due to the fluctuation in price of one currency against another. For AIFS —a student exchange organization that offers education and travel programs all over the world- the fact that they do business domestically and internationally gives rise to several factors that exposes them to currency risk. Their business operations give way to another factor that accentuates their currency exposure. This policy states that regardless of how the currencies fluctuate, positively or negatively, the company cannot modify their current catalogue prices.

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Hedging Currency at AIFS Essay

AIFS sends more than 50, students each year on academic and cultural programs worldwide. AIFS always have currency risk because all the trips are out of the country for educational and cultural programs throughout the world. AIFS has a great feature that it publishes its catalog yearly and guarantees that its prices will not change before the next catalog. Operational Divisions The collegedivision organizes to send university students during the academic year, or in the summer study programs. Courses in the program comprise ofacademic credit with most students traveling to countries with study programs like Europe and other parts of the world i. On the other hand,High School Travel division, which is known as Council for International Studies ACIS , organizes trips for High School students and teachers for understanding non-native culture of different parts of the world. Hedging at AIFS Christopher Archer-Lock isthe controller and treasurer of foreigncollege divisionwhereas,Becky Tabaczynski is the CFO of High School travel division; both counterparts have a daily discussion on the phone to hedge the currency risks associated with the exchanges rates.

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