To begin with, in this world of rapid technological advancements, the customer’s perceptions about their desired products and their criteria of selection of these items have been markedly changed. In my view, if a company is building a good relation with its customers in this era, it is managing a lot of process like satisfying the needs of all its stakeholders, and managing of operational, marketing, and financial departments at optimal level. As a business student, I can tell you that it requires much effort, most importantly when you come at financial aspect of each department. So a manager who is qualified with the subject of financial engineering can gear all the process and departments with good revenue and sales.
As most of the organizations have their finance departments and they deal with all the accounts of company but if every department constitutes of at least one Financial Engineer, it can enhance the company’s production at minimum resources. For example, five corporations having their headquarters; three in United States, one in Mexico and one in France were the seller and producers of gas, chemicals, cement, oil and electricity. Though their goals were very straight forward and they were using traditional approach to achieve those, but unfortunately nothing was working in the favor of companies’ objectives and every time a rise in cost or risks was revealing. What they did to tackle this tough situation? Nothing much; they just applied the same innovative approach by using different tools, concepts, and markets of financial engineering which I denoted before.
It is obvious from the example that financial engineering can have a marked impact on the corporate strategy of a firm and can result in good results if it is applied. Collaboration between general Staff Managers and Financial Engineers can provide a competitive edge to the company over its rivals; by differentiation of items via enhanced delivery and price plans, by an increase in the production capacity with variety of flexible alternatives as compared to capital investments, by alteration of characteristics of risks associated with products included in holding stock, and by creating a win-win situation for placement of strategic mergers on the track.
In summation, a company can increase its progress and can get a competitive advantage by application of Financial Engineering and immersion of this aspect at every level of organization. I would suggest following Financial Engineering tools and concepts to monitor evaluate and manipulate company’s process and management.
Financial Engineering 