Question

1. Explain what is financial management, operation management, and pricing management?
Give real life examples that MNCs use these strategies to manage their operating exposure.

2. Nissan produces a car that sells in Japan for ¥1.8 million. On September 1, the beginning of the model year, the exchange rate is ¥150:$1. Consequently, Nissan sets the U.S. sticker price at $12,000. By October 1, the exchange rate has dropped to ¥125:$1. Nissan is upset because it now receives only $12,000 x 125 = ¥1.5 million per sale. List seven strategies that are open to Nissan to improve its situation?

Answer 1

1. Financial management - It means procurement and utilization of funds. It includes planning, organizing, directing and controlling of all the financial activities. It covers investment, financial and dividend decisions.

Operation management - It is an administrative of business practice. It covers planning, organizing and supervising in the context of production, and manufacturing or the provision of services. It focus on input to output in an efficient manner. It is based on the two terms that is supply chain management and logistics.

Pricing management - It is the process which integrates all the necessary to arrive at the optimal pricing decision. It is the most important decision because in order to stay in the competition and to maximize the profit, the price should be at optimum level.

Companies like Samsung, LG, uses these strategies in their company.