'Financing Strategy Essay\r'

'There be m whatever an(prenominal) elections for expansion for a undergroundly held attach to. The Huffman hauling Company has options to expand the operations of the product line. The three trump options that the firm faces ar; overtaking public by an IPO, acquiring former(a) organization in the kindred industry, or merging with some former(a)(prenominal)(prenominal) organization. With distributively of these creation a possibility, there argon some aspects that mustiness be taken into consideration. First there be potencys of the option, as well as weaknesses. Each option also devolves with its admit opportunities as well as threats, which must not be over looked. slice there are pros and cons to any decision that exit be made as far as going forward is concerned, expanding operations is imperative to staying matched in the business world this day in age. Weighing each option depart resign The Huffman transport Company’s decision dressrs to come to the best conclusion when moving forward.\r\nGoing populace through an IPO\r\nAn initial public offering (IPO) is a wait on in which a private policy-making party issues shares of take to the public for the first time. a great deal times this process is known as â€Å"going public”. Regardless(prenominal) of how people refer to it though, it is passing main(prenominal) for Huffman hauling to consider this option for provided expansion (â€Å"Encyclopedia Of Business”, 2013). The strength in this approach is that it could generate r eveues that do not become to be paid back. The initial purchasers of the stock are buying a portion of the society in hopes that the nourish give attach. Huffman truck give the gate because use those funds to purchase new-sprung(prenominal) equipment, ingest more than employees, and more pregnantly to expand their attend to area in the United States.\r\nHowever, there are weaknesses in this decision. The current g o awaying power and management would digest a great deal of decision do power for the confederation. In an instant, the perfect management aggroup would have a group of stockholders to answer to. The experience savvy that got Huffman Trucking to where it is would become secondary to the whims of the stock holders.\r\nThe opportunities of this approach are legion(predicate), but primarily, it would put Huffman Trucking on the map. Increasing the recognition and reputation of\r\nthe family can go a long manner to increasing revenues. Also, going public would create a financing climate for the club that would provide even more opportunity to gain investment monies (when needed) for march on ontogenesis.\r\nThe major threat of this decision is that current ownership and management would be thrown divulge. If the stockholders felt that they knew allow on for the follow, steps could be taken to get transcend up of any sensation deemed detrimental to the company. This co uld mean that in a motion of years the original owner and every piece of the original management team could be withdraw from the company.\r\nAcquiring another Organization in the akin Industry\r\n other option for Huffman Trucking is to derive another organization deep down the trucking industry. Huffman trucking can already credit some of its growth in the past to acquiring other businesses, though each case is different and it’s important to consider the strengths, weaknesses, opportunities, and threats associated with another acquisition.\r\nAcquiring another business can tending Huffman Trucking to increase their capacity and business. This is a known strength for acquiring another business, because they already have a location that they bandaging as well as a guest base, and their name is known, associating Huffman Trucking with that name will table service their clients get hold comfortable offering their business to Huffman. Depending on how Huffman is alr eady staffed, a weakness of acquiring another business could be bringing on to umteen employees, or even having to let some of that company’s current employees go. If Huffman brings on those employees they have to make sure they have enough business to chip in for every last(predicate) of their labor, and if they have to terminate those employees it can give the company a negative public look for cutting jobs.\r\nThere are countless opportunities when acquiring another company in the same industry. It all depends on how the specific company handles the acquisition. One major opportunity is unlimited growth, if the acquisition goes well for both(prenominal) companies than Huffman will probably have the chance to father other businesses within the same industry and move to grow. A threat would be that there is in truth no guarantee how the other company will handle the acquisition. There could be negative forwarding or issues with current employees if Huffman doesnâ₠¬â„¢t handle the slur appropriately from the developning.\r\nMerging Organizations\r\nMany times, a company like Huffman Trucking probablely can body-build strength by merging with other organizations. wide-awake consideration and planning needs to take station before simply diving into any venture; however, if the company were to mesh itself with a company that is already holding itself upright, Huffman Trucking potentially could have more to offer its guests. In combination with the diverse servicing Huffman already provides, it can expand on these services. Especially, if Huffman aligns itself with another well-known company, consumers could still get their needs met by the former company while also be introduced to the products and services offered by Huffman.\r\nIn relation, if Huffman shares nearby territories with other companies that offer similar services, it whitethorn be a wise move to merge the companies into one entity. â€Å"It is novel to merge with, vic torful companies if the services complement each other. The acquiring company would have access to a new market and an already established customer base” (NFIB, 2013, P. 1). In this instance Huffman would serve as the main headquarters; the head honchos taking over. unite similar companies together potentially can go ballistic more power as a union, reinforcing the strength in numbers concept. â€Å"Merging is a route to encourage growth; it can be looked upon as a way to open up new channels and new markets” (NFIB, 2013, P.1).\r\nOccasionally companies experience vote down times, mostly because of market trends. On their own, they simply would digest steam and eventually fade into financial despair, unless another company chooses to offer a life raft. In these instances, a large company may swoop up in and â€Å"buy” out the struggling company. The strive can prove to be fruitful if the bigger company is undefeated at not lonesome(prenominal) turning a round profits for the struggling company but also building onto its own. Acquiring spare assets also helps to make a large company â€Å"look” better to investors.\r\nHuffman Trucking initially may desire to keep everything the â€Å"same.” It may even tell that employees will not lose their jobs. The reality, however; for any successful merger, is that change is inevitable and some employees will be let go. If Huffman attempts to retain too many employees it sets itself up for failure as the synergy processes can become strained. Within a given organization, lone(prenominal) so many associates are needed to look at the necessary departments. The action of merging with other companies automatically reveals the existence of several different â€Å"departments” of employees doing the same fictitious character of work.\r\nHuffman will have to determine how many workers are â€Å"needed” to fill these positions and then layoff, or relocate the rest. Lar ger companies merging with other large, successful companies may merge more smoothly with minimal layoffs, and such(prenominal) a condition would be ideal. The merging c antiophthalmic agentaign could unfortunately cause a temporary downwards trend in stock prices. Huffman may be tempted to get cocky with prices because it is now owner of many smaller entities. It may would reason that since it offers products widely want by consumers that pricing rests solely within their whim. Consumers, however, â€Å"may rebel when confronted by increased costs as they seek cheaper product alternatives within the marketplace” (Rimm & Media, Wint).\r\nThe opportunities are numerous when a merger is successful. deuce well-financed, profitable companies potentially can exponentially increase their net worth by joining forces. property lines of communication open among the entire company promotes enthusiasm from workers old and new. Acquiring companies can benefit from the broader customer base; in conjunction it can a great deal decrease expenses as they produce more of their own brand.\r\nAlthough the reality exists that some employees will be let go, there also lays potential risks. â€Å"Customer service may suffer as employees feel less motivated to go out of their way to help clients and shoppers” (Rimm & Media, Wint). A gradually weakening manpower fueled by employee stress and weakened team spirit will eventually ask the face of the entire company. Many merger efforts actually discourage employees from pursuit employment elsewhere, as they want the merger process to unfold smoothly.\r\nThis is no way guarantees job security department for workers long-term. Consequently, some employees will be intolerant toward the unknown. They feel unmotivated. Turnover is sure to spread among departments. As departments begin to weaken, remaining workers may start to feel the iron of added work load. During the merger, the company is unlikely to h ire electrical switch workers right away. The overall spirit within the company may slowly deteriorate as result.\r\nAnother potential threat is an already weak company deciding to merge with another weak company, assuming that combining the two will induce success. dickens broke companies will seldom find success together. More than likely, they simply will fail as one unit.\r\nHuffman Trucking should consider several factors when choosing to engage an international location. Financial decisions for Huffman Trucking will be affected by the decision to branch out into international markets. The usual factors that Huffman Trucking takes into consideration in the planning efforts of picture and demand will entangle new risks. These risks will â€Å"include unanticipated goodness price shocks, volatile exchange rank, and unexpected supply disruptions as a result of forces beyond our controls, such as physical disasters and terrorist attacks” (Neuman, 2005).\r\nThe compan y should consider involvement rates as this will affect the exchanges from one currency to another. Employment levels and economic growth expectations will also potentially affect exchange rates. move unemployment in another solid ground could bring the value of that country’s currency down, thus creating a less favorable exchange rate. The same is current for general economic conditions. If a country’s economy is not growing interest rates are likely rising and potentially affect exchange rates as well.\r\nAnother factor Huffman Trucking should consider when choosing a location for potential international expansion is the trade balance of the other country as well as its political and regulatory structure. A country wants to maintain a positive trade balance to keep a favorable demand for its currency. The political structure within a foreign country needs to be strong to help protect the investments of Huffman Trucking. The foreign country should possess clearly defined regulations. Strong regulations will also help protect the company’s investments. These critical factors will aid Huffman Trucking is determine where international expansion aligns with their operations.\r\nEach of the choices before Huffman Trucking are valid and each has its own strengths and weaknesses. It is important to note that expansion is an important part of successful business, but not necessarily a requirement. Huffman Trucking must decide if negative side effect of any of these choices is worth the gain.\r\n'