Financial Analysis of Singapore in Different Perspectives - Case Study Example

International Business Feasibility Study Financial analysis of Singapore in different perspectives Firehouse Subs is a well known US based company that deals in chain restaurant and it is specialized in hot subs and this has been established and founded by Jacksonville Florida in the year 1994. Firehouse Subs is engaged in serving sandwiches that is stuffed with cheeses and meat. Firehouse has been ranked and rated as the company of the year in 2006 by an audit conducted by KPMG. Firehouse Subs the most successful company of US wants to invest in Singapore because Singapore is regarded as the fastest growing and development of the restaurant brands in the world and since Firehouse is the leader in the industry of the fast casual sandwich and the demand for the products that is prepared by Firehouse is unique and special. And the specialty in the products and services that is offered by Firehouse is growing and developing by leaps and bounds and therefore it decided to invest in Singapore and opening and finding out various ways for exploring its opportunities for the growth and expansion in Singapore. Firehouse possesses strong brand equity and a relationship of having an exceptional franchisee. Firehouse is considered as the right investor (Bartlett and Beamish, 2008). Financial analysis in banking perspective Consumer banking is considered as the concept of globalization for realizing its economies of scale and generating its growth and development beyond the home market for facing the competition in the foreign market. Singapore generally follows a hierarchy in its organizational structure therefore banking industries have performed efficiently and effectively in the market of Singapore. The development and the expansion of the banking specially the investment banking in Singapore has encouraged the business to invest in Singapore. Figure 1: Comparison of the global banking system of Singapore with other countries (Standard and Poor, 2012) From the above figure it can be explained that the banks in Singapore is benefited from the high operating income, political environment and stability in the economy. The economy of Singapore is diverse, resilient and highly competitive in nature. The extent of the monetary and the fiscal policy and the flexibility in the policy and the highly rated sovereignty it supports the economic resilience. Firehouse has decided to invest in Singapore because in terms of the banking perspective the system wide of funding includes lower risk and the banks in Singapore are benefitted from the high and the increase in the retention of the customers and also building the confidence in them. The laws for regulating the banking practices in Singapore for carrying out business includes the formulation of law, rules and regulations. In Singapore the lending business is mainly regulated by various statutes that depend on the type of person or the institution for providing funds. The security is provided by the banks in Singapore for avoiding the affect of bankruptcy. In terms of the business or carrying out franchise in Singapore it has adopted progressive modification with the motive or view of achieving high level in providing financial services in respect to taxation. And the above figure represents or signifies that the reason for Firehouse for investing in Singapore as compared to other countries in terms of system wide funding it is more as compared to other peer countries which include Hong Kong, Japan, Australia, Japan and France. Financial analysis in currency perspective Firehouse is willing to invest in the market of Singapore is that there are various laws and regulations that is implemented or formulated by the Government in Singapore for making payments in terms of its domestic currency . The currency board has established a fixed exchange rate in terms of conversion of the international currency. The monetary authority of Singapore is the central bank of Singapore and also the financial regulatory authority of Singapore that is assigned or is responsible for the monetary authority of Singapore. Singapore has been selected for investment because Singapore is considered as the most progressive and complex monetary and banking environment with coherent and dynamic monetary administration. Singapore apart from maintaining its currency in the central bank has maintained a reserve cover of 100%. The advantage or the benefit for investment in Singapore is that it does not maintain a fixed exchange rate and also it does not react to the increase in the monetary base and also in the flow of the reserve system. Singapore maintains a very well planned monetary system which helps them to provide 100 % coverage on the issue of the currency as compared with the other countries such as the Hong Kong dollar and the US dollar. The currency =can be easily transacted in Singapore for carrying out business. Firehouse subs can get the benefit in investing in Singapore since the currency is easily transacted in Singapore. Financial analysis in accounting practices perspective The accounting practices that is adopted in Singapore is the International Financial reporting Standards for controlling all its business transactions and comparing the accounts of the company across the international and the cross borders. The accounting standards of Singapore have been developed and formulated in such a way that it carries out trade or influence investment in Singapore. The council of the Singapore Accounting standards have established or started a strategic partnership with the International Accounting Standard Board. The Singapore government has been assigned with the responsibility in reviewing the Accounting standards of Singapore. Singapore plays an important and a vital role in setting or establishing the standards that is relevant to the IFRS for remaining relevant and Singapore is capable or is able of reflecting or focusing on the economic reality for diversifying the business activities in an ever changing environment. Singapore maintains a full convergence with the accounting standards for the global recognition. The main aim or the objective of the accounting Standard board is transforming or converting its economy into a Global Accounting hub that is initiated or supported by the Accountancy commission of Singapore. Since there is a standard accounting practice that is adopted and followed in Singapore for carrying out the transaction. The accounting fiction is adopted by Singapore is yielding high rate of return in case of marketing and distribution of investment. The audit report and the accounting are evaluated by KPMG for evaluating and monitoring of audit. The recommendations of the government are complying with the accounting standards and the corporate governance for the practice of accounting on a continuous basis. With the modifications in the accounting standards and the corporate governance there is a change in the accounting disclosure on a continuous basis. The compliance with the accounting standard have compelled and motivated to invest in Singapore (Tan, 2002). Financial analysis in trade policies perspective Singapore has adopted the policy of industrialization of export for the promotion of export and the import of the goods and services in the conduct of the business in Singapore. The main intention of firehouse to invest in Singapore is that Singapore has fewer barriers for the conduct of trade and for carrying out the import and export of the goods and services. United States has been considered as the largest trading partner of Singapore for carrying out trade and commerce that is related to the import and the export of the goods and services. More than 19% of the trade that is carried out in Singapore is with United States. The trade policies and the increase in the trade practices especially the carrying out of export trade activities has been developed with the increase in the trade activities and partnership with United States. United States is considered as the largest supplier of import to Singapore. The government of Singapore is involved in carrying out trade and development activities for the growth and development in the economy. Singapore international trade has increased in the last phase of the 20th century. Singapore has recently entered into a negotiation that is supporting the conduct of the free trade practices to be carried out among the member nations. The facility of free trade has encouraged Firehouse to carry out its trade activities in Singapore. Singapore is importing more than 17% from United States. Singapore is considered as the 14th largest exporter in the world and it has been also ranked as the largest importer of the world. Singapore has the highest GDP ratio of around 407.9 %. The merchandise of the export that is carried out in Singapore includes entrecote export and it export includes 47% that comprises of re exports. The position of Singapore is confirming and supporting or favoring the conduct of trade in Singapore. Singapore has framed an image that is most business friendly and stable for the transaction of export and import. Due to its increase in the trade activities it faces a severe competition from its member countries. The foreign trade policy that is adopted by Singapore is the import of tariff. Singapore experiences a free and open trade economy and 99% of the imports that enter into Singapore are mainly duty free, Singapore experiences most liberal trade barriers. The foreign trade policies require the import requirements and documentation for carrying out its trade in Singapore. United states mainly control the export activities of Singapore and it also involved in the re export of the intermediaries or the goods of Singapore therefore it is adding a advantage or facility for Firehouse which is a US based business to invest easily and carry out its trade activities in Singapore. The prohibited and the restricted laws have been imposed on certain goods and services according to the trade policies of Singapore. Therefore the trade policies that is adopted and implemented by Singapore for carrying out its import and export has compelled and encouraged Firehouse to invest in Singapore and since Firehouse is a US based business which is providing a advantage for investing in Singapore since the US is the trading partner of Singapore and it is involved in the foreign trade policies that is adopted by Singapore (Carling, 1995). Organizational structure necessary for the success of the corporation of Singapore Singapore is considered and regarded as the hub for the global and the regional inn ovation and it is supported by dynamism and diversity for carrying out business and trade. Singapore expansion, development and the transformation has encouraged various multinational companies to carry out its trade activities in Singapore. The organizational structure is required to be developed in such a way that it provides success for Firehouse in investing in Singapore and therefore it is required to analyze the benefits that exist in the economy of Singapore. The factors are required to be considered for the investment in Singapore, the capacity, capability and the connectivity of Singapore is required to be considered, the level or the extent of quality of the services that is provided by the economy of Singapore. The organizational structure of Singapore is to be incorporated in such a way that it is registered under the foreign company act. Figure 2: import of food by Singapore As it can be observed from the above figure that Singapore has experienced an increase in the trend of import of food and agricultural products in Singapore which facilitates or provides an opportunity for Firehouse in investing in Singapore and carrying out its trade in Singapore. For the success of the investing in Singapore it is required to focus on the cost efficiency, development in the logistics. Singapore is well known and is famous for carrying out global business. The advantage of carrying out trade activities in Singapore is that it has been ranked or positioned very high in terms of increasing the friendliness in the business or the conduct of trade activities. The business hierarchy of Singapore is known for its composition or combination of efficiency and effectiveness in its organizational structure. Singapore organizational structure is considered or regarded as the host of the structural approaches. Networking is considered as an important or essential part of the business culture in Singapore. The organizational structure is designed in such a way that it provides a system that assures in the commencement of the business, procedures that is related to registration, dealing or handling various permits protection of the creditors and the payment of tax. Majority of the business have established their franchise or the corporate office in Singapore (Touffut, 2003). The business culture of Singapore is the combination of past, geography, climate and tradition. The business structure in Singapore is to be formulated in such a way that it provides advantage or benefit in the protection of the business and the companies right and the other benefits that are to be provided Figure 3: Organizational Structure of Singapore The reason for the development of the organizational structure of Singapore for carrying out its business and investing in Singapore is there is a lot of scope and opportunity that are associated with the need for the protection and innovation that is related to the expansion of the business in Singapore and Singapore is well known for the quality, reliability, rule of law, integrity and the enforcement of the intellectual property rights. Singapore has the ability to attract the investors to invest in Singapore and the potential or the benefits that favors the investment in Singapore are the government has emphasized on maintaining its tax rates and the tax laws very competitive for following a holistic approach. The design and the development in the organizational structure of Singapore has compelled or forced firehouse to invest or carry out its franchise business in Singapore. The government of Singapore has adopted the pro business policy in order to face the crisis and the economic situation that includes the reduction of the corporate tax for carrying out trade activities, decreasing the central provident fund. Therefore Singapore has been considered and regarded as the most favorable and the easiest place for the conduct of business in Singapore. The main reason for investing and carrying out its business in Singapore is that for the development of the organizational structure in Singapore is that it is designed in such a way that it facilitates the entry and the stay for the entrepreneurs for carrying out its operation or business in Singapore. Singapore business and the trade policies in relation to the organizational structure is designed in such a way that it facilitates the investors to enjoy the smooth entry and exit from Singapore with the issue of special passes and visas. Singapore is considered as an ideal location for the investment and the establishment of the new business and franchise. The companies generally prefer Singapore because its organizational base is trusted and stable in nature and it also facilitates the companies in gaining competitive advantage. The country has people of different culture. Therefore for establishing Firehouse business in Singapore the company must have an organizational culture which will support different cultures. It should have effective policies and strategies for establishing an environment which will enhance cross cultural activities. The retail organizations in this company have warehouses which helps the company to manage its wide range of products in an efficient way. The company has to build good warehouse facility to run its business successfully. The culture of Singapore strongly supports different corporate social responsibility of different companies doing business in there. The company have to develop its organizational structure in such a way that it will influence the company in performing various activities of associated with corporate social responsibility. It should make a dedicated team or department who will handle this issue. As it is a private company the legal guidelines of Singapore which affects the affects business structure. The company should have a registered office in this country which will act as a first step in establishing this organization (Zhu .and Kraemer, 2005). The organizational structure of Firehouse should be formed in such a way that it will give value to its shareholders. This organization needs to have a proper registration of its business process and its structure with the government of Singapore for developing a structured business in Singapore. The company will need a large number of employees for performing its business functions in this country. For this reason it must build different teams who will operate various business processes in an efficient way. References Bartlett, A.C. and Beamish, P.W. (2008). Transnational Management.New York: Mc Graw Hill. Carling, R.G. (1995). Singapore: a Case Study in Rapid Development. Singapore: International Monetary Fund. Standard and Poor. (2012). Banking Industry Country Risk Assessment. Singapore: McGraw Hill. Tan, C.H. (2002). Singapore Financial and Business Sourcebook. Singapore: NUS Press. Touffut, J.P. (2003). Institutions, Innovation and Growth: Selected Economic Papers. New York: Edward Elgar Publishing. Zhu, K. and Kraemer, K.L. (2005). Post-adoption variations in usage and value of e-business by organizations: cross-country evidence from the retail industry. Information Systems Research. 16(1). pp. 61-84. Read More