Microsoft Company Case Study

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Financial Risks faced by Microsoft Ltd There are many risks that businesses face when operating as a multinational corporation (MNC). Though some risks are endemic to all firms, organizations operating across national boundaries face additional and unique challenges. Globalization and market liberalization present increased opportunities for growth into new territories overseas. However, financial managers of multinational companies must devise an approach that helps in managing the enhanced threats to operations. Among the different risks that Microsoft Ltd is facing is financial risk. Financial risk is the potential of losing money. Competitors of Microsoft Ltd are rapidly developing and deploying cloud-based services for consumers and business…show more content…
Their business is based on successfully attracting and retaining talented employees. The market for highly skilled workers and leaders in the industry is extremely competitive. They are limited in their ability to recruit internationally by restrictive domestic immigration laws. If they are less successful in their recruiting efforts, or if they are unable to retain key employees, their ability to develop and deliver successful products and services may be adversely affected. Effective succession planning is also important to their long-term success. Failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder their strategic planning and…show more content…
It operates in over 100 countries and a significant part of its revenue comes from international sales. Pressure to make its pricing structure uniform might require that they reduce the sales price of their software in the United States and other countries. Operations outside the United States may be affected by changes in trade protection laws, policies and measures, and other regulatory requirements affecting trade and investment, including the Foreign Corrupt Practices Act and local laws prohibiting corrupt payments. Emerging markets are a significant focus of our international growth strategy. The developing nature of these markets presents a number of risks. Deterioration of social, political, labour, or economic conditions in a specific country or region and difficulties in staffing and managing foreign operations may also adversely affect its operations or financial results. Although they hedge a portion of their international currency exposure, significant fluctuations in exchange rates between the U.S. dollar and foreign currencies may adversely affect its net
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