3.7. (Step 2) Controlling of strategy and consideration the contract as investment project

The Step 2 means that managements try to predict and mitigates all risks of company. The company starts to design strategy and the first problem is handling all levels of risks. They are main risks: global risks, country risks (including f/x), bank system risk, industry risks, extraordinary risks, corporate risks, and corporate financial risks. The main risks of company depend on business environment and finance technique which was chosen by the company. For example this is the Analysis business risk – Porter Model.

Figure 2.1¹⁰

The very interesting method of analysis business environment used to American company GE, Motorola, and other top it is named “Six Sigma”. Six Sigma: A comprehensive and flexible system for achieving, sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinvesting business processes.

The Six Sigma Roadmap

Figure 2.2¹¹

3.8. Transformation the contract to the invest project

The main cross-border strategy of company is controlled by options of cross-border contract. The first remarkable options of contract are the delivery terms. The transformation of contract I am starting with delivery terms.

Risk of delivery (for buyer)

	TERMS	RISK WEIGHTING OF BUYER
1.	CEXW	+	+	+	+	+	+	+	+	+	+	+	+	+	(0.9)	MAXIMUM RISK
2.	CFCA	0	+	+	+	+	+	+	+	+	+	+	+	+
3.	FAS	0	0	+	+	+	+	+	+	+	+	+	+	+
4.	FOB	0	0	0	+	+	+	+	+	+	+	+	+	+
5.	CFR	0	0	0	0	+	+	+	+	+	+	+	+	+
6.	СIF	0	0	0	0	0	+	+	+	+	+	+	+	+
7.	CPT	0	0	0	0	0	0	+	+	+	+	+	+	+
8.	CIP	0	0	0	0	0	0	0	+	+	+	+	+	+
9.	DAF	0	0	0	0	0	0	0	0	+	+	+	+	+
10.	DES	0	0	0	0	0	0	0	0	0	+	+	+	+
11.	DEQ	0	0	0	0	0	0	0	0	0	0	+	+	+
12.	DDU	0	0	0	0	0	0	0	0	0	0	0	+	+
13.	DDP	0	0	0	0	0	0	0	0	0	0	0	0	+	(0.1)	MINIMUM RISK

Figure 2.3

Secondly transformation of the cross-border contract to invest project is techniques of payment or payment term of a contract. Techniques of payment are the main indicator of realization the strategy of company and it is strongly connecting with finance risks.