Strategic options in banking and financial institutions

Strategic Options With Banks

The process of globalization has determined companies to expand their business on international level in the attempt of increasing their market share. Therefore, these companies had to modify their global business strategy in accordance with the requirements of the international business environment. The Acme Company is a successful business that is specialized in the construction of aggregate materials that can be used in most industries.

In order to expand its activity, the Acme Company's managers have established several subsidiaries in South America and Asia that must focus on importing materials and assembling them for export. However, this activity requires a series of modifications in the company's processes. For example, this activity requires centralized cash management processes. This allows the company increased control on the cash management. The company's activity in South America and Asia require local lending sources that can be used in order to operate cash. The company's excess cash balances require investment vehicles that can be used on short-term. In addition to this, the Acme Company needs foreign exchange and forward market services.

There are several banks that provide multinational cash management services that focus on combining banking and foreign exchange management. Bank of America provides some products and services of this kind, but not as properly organized so that they could easily satisfy Acme Company's needs (Bank of America, 2011). Bank of America offers foreign exchange services, global execution services, and investment solutions. Regarding foreign exchange, the bank manages currency exposure and focuses on executing international payments for multinationals. In the case of expanding companies like the Acme Company, the bank has initiated management of export and import currency exposure. The solutions developed by the Bank of America in such cases are represented by treasury management services that are integrated into the online cash management platform, retail services, advisory services that allow the bank's customers to benefit from different analyses, and electronic trading services.

Another bank that provides similar cash management services that the Acme Company could use is represented by HSBC. Its services are differently organized than in the case of Bank of America. Regarding international services, HSBC focuses on checking, borrowing, savings, insurance, cards, and other services (HSBC, 2011). Corporate banking services that are provided by HSBC focus on collections management, financing, foreign exchange, global markets, Internet banking, payments and cash management, trade services, and others.

In addition to this, HSBC provides services regarding trade and supply chain that can be used by the Acme Company in order to increase the efficiency of its supply chain management in South America and Asia. HSBC also provides several services that multinational companies can address in order to manage their business accounts. The bank also focuses on developing foreign exchange solutions.