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Using the information that you have compiled over the past four modules, prepare your summary recommendation for Gentry Inc. and its plan to expand internationally. Remember that the company is trying to raise $50 million to expand via an IPO and debt issuance.Create a 10-15 slide presentation detailing your findings. Your recommendation should be 1-2 slides. Note that the title slide and reference slides are not included in the 10-15 total. Be sure to include academic references in your presentation as well as any charts or graphs to convey your financial information.Include a summary the deliverables from Modules 02-04 in the presentation.Your slides should flow as a cohesive presentation, not a patchwork of distinct pieces of information.
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Running Head: CLIENT ENGAGEMENT
1
3-3-2019
Introduction (Expanding Gentry Inc)……………………………………………………3
History of the firm…………………………………………………………………………3
CLIENT ENGAGEMENT
2
Growth strategies………………………………………………………………………….…4
Capital structure…………………………………………………………………………….5
Works cited………………………………………………………………………………..…6
Introduction (Expanding Gentry Inc)
Gentry Inc. needs to expand both in the domestic and international market by raising funds
through the IPO (Initial Public Offering). The firm wants to venture into the markets in Germany,
CLIENT ENGAGEMENT
3
China, and Japan which will increase its profit level from 15 to 25%. In expanding to the global
market, the firm Gentry Inc. will be in a position to capitalize on the glowing market and become
a global player. The board of director needs to enhance the operation to make the organization
become a global player. However, this will not come easy as there is a need for additional funds
to the tune of $50 million. This amount of money will be raised by making the company public
and selling of bonds. In the capacity of a consultant, I ensure that Gentry is successful in raising
the required funds through the effectiveness of IPO, recognizing the risks to the business and how
to deal with them, management of the borrowed capital and finally ensure that they maintain the
financial robust.
History the firm
Gentry Inc. is a technology firm that is mid-sized located in New York. The company has
200 employees and currently makes an annual revenue of $300 million. The company has been in
existence for over ten years and is privately owned. The company provides services that range
from construction management and general contracting services. It specializes in the construction
of custom residential projects. Also, the company does all things related to construction such
developing of property and installation of interior details. The customers are based mostly based
in New York and due to the size of the company the company usually give personalized services.
The firm is in the process of expanding the customer base to increase it profitability levels and
gain a lot from the growing markets.
Growth strategies
Gentry Inc. wants to venture into the international markets and increase its operations at
the domestic level. The firm will successfully achieve growth by coming up with the right and
CLIENT ENGAGEMENT
4
informed growth strategies. Growth strategies will revolve around increasing sales and profits. To
begin with, Gentry should consider market penetration as a growth strategy (Covin, Jeffrey, and
Kimberly, 2006). The firm needs to use the existing products and services to enter new and virgin
markets. The firm should consider increasing market share in new markets by lowering prices and
product differentiation. This strategy ensures that the firm gets access to the new and virgin
markets. Consequently, Gentry Inc. should consider market expansion as a growth strategy
(Covin, Jeffrey, and Kimberly, 2006). In this case, a company gains access to new markets as a
way of expanding. There are barriers to entry into new markets, but the firm finds a way where
product find their way into the market thereby increasing sales and profits. Furthermore, Gentry
should consider product and services diversification as a growth strategy (Kaplan, Robert, and
David, 2001). The firm needs to introduce new products as per the demand of the customers and
sell them in new markets. This strategy will attract customers and enable the firm to compete with
others. Lastly, Gentry can use acquisition as a growth strategy. The firm can acquire other
companies that offer similar services to expand their operations (Kaplan, Robert, and David, 2001).
In acquiring already existing companies, it becomes easy for the firm to market itself and its
product to the people in the new location. Gentry should consider all the growth strategies keeping
in mind that all the strategy require the fund to be successful.
Capital structure
Capital structure entails the way a company uses an organization finances its activities,
growth, and operations by using funds from different sources. Gentry as a firm can get funds from
CLIENT ENGAGEMENT
5
the sale of shares using the IPO, bonds, equity and retained earnings to finances its growth
strategies. In this case, the firm is keen on raising funds by going public and issuing of bonds to
raise over $50 million. Gentry goes public as they offer the members of the public to buy shares
with the help of an underwriting firm. The underwriting firm enables the small firm to identify the
type of security to offer and the offering price (Baker, Malcolm, and Jeffrey, 2002). This enables
the company to raise funds necessary for expansion. On the other hand, the firm can raise funds
for growth by issuing of bonds. In this regard, bond acts as a loan between the firm and the investor.
The investor undertakes to give a certain amount of money for a specified period (Baker, Malcolm,
and Jeffrey, 2002). The investor, in turn, gets interests at predetermined periods. Gentry will be
assured of enough capital to implement its growth strategies when the different ways of sourcing
for funds are successful.
Work cited
CLIENT ENGAGEMENT
Baker, M., & Wurgler, J. (2002). Market timing and capital structure. The journal of finance,
57(1), 1-32.
Covin, J. G., Green, K. M., & Slevin, D. P. (2006). Strategic process effects on the
entrepreneurial orientation–sales growth rate relationship. Entrepreneurship theory and
practice, 30(1), 57-81.
Kaplan, R. S., & Norton, D. P. (2001). The strategy-focused organization. Strategy and
Leadership, 29(3), 41-42.
6
Running Head: RISK IDENTIFICATION IN GENTRY COMPANY
Risk Identification in Gentry Company
3/10/2019
Risk Identification in Gentry Company
1
RISK IDENTIFICATION IN GENTRY COMPANY
2
Gentry Company is a technology firm that is located in New York. Currently, the
company has 200 employees, and it makes an annual revenue of $300 million. , and it has been
in existence for over ten years. The company deals with providing services that range from
construction and general contracting services. For the company to expand, it has come up with
the resolution of raising funds through an initial public offering and borrowing capital from other
sources of money. In the Gentry Company, risk exposures prop out, and they drag the company
down.
Transaction Risk
This kind of risks arises due to the changes of currency between the time at which the
contract is through with foreign currency and at the time the agreement of the deal is finalized.
Transaction exposure is short term objective in nature, actually for less than a period of one year
(Ketkar & Vaidya, 2018). Borrowing of some amount of money and involving in purchasing and
selling of credits reveals as examples of transaction exposure. Gentry industry tends to pay for
more purchase payment for them to acquire the desired goods. The act affects the flow of
business as it can lead to a default of payment.
Translation Risk
Translation in Gentry measures the impact of changes in the foreign exchange currency
on the price products of the liabilities and assets that the company owns. It clearly shows that the
pre-existing assets and liabilities values alter on the level of changes at the rate that the foreign
exchange is coordinating. As the Generic wants to venture in China, Japan, and Germany, the
assets and liability found in those company will lead to effects of translation risk. The generic
company in many cases does not use home currency in business that is set outside its country.
RISK IDENTIFICATION IN GENTRY COMPANY
3
When calculating the price of the assets and commodities which are mostly in large
numbers the translation risk levels up. Assets and liabilities that are denominated in other
countries tend to be counted to produce a financial statement; they fluctuate the value of the
parent’s company’s assets and liabilities due to the existence of high foreign exchange rate
(Challoumis, 2018). The above crisis affects Gentry in profit perspective as a foreign exchange
rate consumes the profit that the parent company makes. Having a senior foreign exchange rate
on the assets that are in other countries will hinder the company from reaching other countries
and provide their contract services there.
Economic Risk
Presence of financial risk in Gentry Company will affect the operation of the company
negatively. Economic risk refers to the change in the value of a company on account of change in
foreign exchange rate. The inner significance of the company is equivalent to the summation of
the available amounts of future cash flows discounted at an appropriate rate of return (Su, 2018).
Economic risk affects the changes in exchange rates where they depreciate, and it finally affects
the future cash flow that the Gentry Company is willing to have. Financial risk affects the
suppliers who distribute the commodities in Gentry. Also, competitors are affected as Gentry no
longer have the aspects of dealing with the competitors.
Sensitives and Analysis used by Gentry Company to Avoid Risk
Gentry Company can be in apposition to avoid the three types of risks. The best way is to
apply the strategy of avoiding risks. When the company plots that it’s in apposition to face the
threats, the best way of escaping the high risk is to prevent them. Transaction risk can be avoided
by not creating more shares in many different countries as the foreign exchange differs in all
RISK IDENTIFICATION IN GENTRY COMPANY
4
countries (Ketkar & Vaidya, 2018). Having fewer assets and liabilities in a few states will help
Gentry to avoid the transaction risk. With fewer states, still, the company will be faced with the
disadvantages of fewer profits as sometimes many countries may have low exchange rates.
Transfer of commodities in Gentry Company will help the firm to avoid future risks.
Transferring products and placing them in one position will reduce the chances of risks. Assets
found in different countries will affect the first company to produce more amount of cash to
purchase the assets in different countries (Su, 2018). Transferring of the commodities helps
Gentry company to accumulate all the purchase price of the assets and gives the company less
time in calculating the profit and loss attained.
Transferred commodities tend to increase in value as they might be purchased with a
higher price than they were gotten from the market. Increase in cost helps the company to have
higher profits making the company go for more commodities in the market (Challoumis, 2018).
Elimination of some objectives in Gentry Company will help the company to reduce risk in the
markets. Presence of poor leadership in Gentry Company will participate in the presence of
changes in the company. Eliminating poor executive will help the company to attain its
objectives.
In conclusion, Gentry Company is faced with three types of risks which are a transaction,
translation, and economic uncertainty. These type of risks affects the operation of the company.
The assets found in different countries might experience high exchange rates forcing the first
company to incur more losses. Strategies like elimination, avoidance and transfer of some
commodities and can be applied to eliminate the risks.
RISK IDENTIFICATION IN GENTRY COMPANY
5
Reference
Challoumis, C. (2018). The Role of Risk to the International Controlled Transactions. Annals of
“Dunarea de Jos” University of Galati Fascicle I. Economics and Applied Informatics
RISK IDENTIFICATION IN GENTRY COMPANY
6
Years XXIII–no2.
Ketkar, M., & Vaidya, O. S. (2018). A Flexible Approach to Mitigation of Supply Risk
Through Scenario Modelling. In Flexibility in Resource Management (pp. 203214). Springer, Singapore.
Su, S. (2018, June). An Investigation of Foreign Exchange Risk Management in Chinese
Multinational Companies Compared with US and UK MNEs. In 2018 2nd International
Conference on Management, Education and Social Science (ICMESS 2018). Atlantis
Press.
Course Project Outline
1. Introduction-Expanding Gentry Inc
2. History of the firm
3. Growth strategies
4. Capital structure
5. Risk identification
6. Conclusion
7. Works cited
Running Head: CLIENT ENGAGEMENT
1
Client Engagement
2-24-2019
CLIENT ENGAGEMENT
Introduction (Expanding Gentry Inc)……………………………………………………3
History of the firm…………………………………………………………………………3
Growth strategies………………………………………………………………………….…4
Works cited………………………………………………………………………………..…5
2
CLIENT ENGAGEMENT
3
Introduction (Expanding Gentry Inc)
Gentry Inc. needs to expand both in the domestic and international market by raising funds
through the IPO (Initial Public Offering). The firm wants to venture into the markets in Germany,
China, and Japan which will increase its profit level from 15 to 25%. In expanding to the global
market, the firm Gentry Inc. will be in a position to capitalize on the glowing market and become
a global player. The board of director needs to enhance the operation to make the organization
become a global player. However, this will not come easy as there is a need for additional funds
to the tune of $50 million. This amount of money will be raised by making the company public
and selling of bonds. In the capacity of a consultant, I ensure that Gentry is successful in raising
the required funds through the effectiveness of IPO, recognizing the risks to the business and how
to deal with them, management of the borrowed capital and finally ensure that they maintain the
financial robust.
History the firm
Gentry Inc. is a technology firm that is mid-sized located in New York. The company has
200 employees and currently makes an annual revenue of $300 million. The company has been in
existence for over ten years and is privately owned. The company provides services that range
from construction management and general contracting services. It specializes in the construction
of custom residential projects. Also, the company does all things related to construction such
developing of property and installation of interior details. The customers are based mostly based
in New York and due to the size of the company the company usually give personalized services.
The firm is in the process of expanding the customer base to increase it profitability levels and
gain a lot from the growing markets.
CLIENT ENGAGEMENT
4
Growth strategies
Gentry Inc. wants to venture into the international markets and increase its operations at
the domestic level. The firm will successfully achieve growth by coming up with the right and
informed growth strategies. Growth strategies will revolve around increasing sales and profits. To
begin with, Gentry should consider market penetration as a growth strategy (Covin, Jeffrey, and
Kimberly, 2006). The firm needs to use the existing products and services to enter new and virgin
markets. The firm should consider increasing market share in new markets by lowering prices and
product differentiation. This strategy ensures that the firm gets access to the new and virgin
markets. Consequently, Gentry Inc. should consider market expansion as a growth strategy
(Covin, Jeffrey, and Kimberly, 2006). In this case, a company gains access to new markets as a
way of expanding. There are barriers to entry into new markets, but the firm finds a way where
product find their way into the market thereby increasing sales and profits. Furthermore, Gentry
should consider product and services diversification as a growth strategy (Kaplan, Robert, and
David, 2001). The firm needs to introduce new products as per the demand of the customers and
sell them in new markets. This strategy will attract customers and enable the firm to compete with
others. Lastly, Gentry can use acquisition as a growth strategy. The firm can acquire other
companies that offer similar services to expand their operations (Kaplan, Robert, and David, 2001).
In acquiring already existing companies, it becomes easy for the firm to market itself and its
product to the people in the new location. Gentry should consider all the growth strategies keeping
in mind that all the strategy require the fund to be successful.
CLIENT ENGAGEMENT
5
Work cited
Covin, J. G., Green, K. M., & Slevin, D. P. (2006). Strategic process effects on the
entrepreneurial orientation–sales growth rate relationship. Entrepreneurship theory and
practice, 30(1), 57-81.
Kaplan, R. S., & Norton, D. P. (2001). The strategy-focused organization. Strategy and
Leadership, 29(3), 41-42.

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