Question 1

RKT Group Plc is a British multinational consumer goods company headquartered in England. It manufactures and markets branded products in the health, hygiene, and home sectors. It sells a comprehensive range of products through over 60 operating companies into nearly 200 countries. The companys brands include air fresheners, household cleaners, laundry products, furniture polishes and dishwashing detergents. It also makes over-the-counter pharmaceuticals such as analgesics, antiseptics, flu remedies, and gastrointestinal medications and offers products for hair removal, denture cleaning and pest control. The companys business is structured through a matrix of three geographical segments: Europe and North America; Latin America, North Asia, Southeast Asia and Australia and New Zealand; and Russia, Middle East, North Africa, Turkey, and Africa. These segments consist of a centralized category development, global sales, supply, and support functions such as finance, human resources, and information services. The group also has two non-core businesses: ABC Pharmaceuticals and Food. The central category development function is responsible for strategies, brand equity programs and best practices, and new product development, namely research and development and consumer and market research, for implementation by the geographical segments. The supply function is responsible for all procurement, production, and logistics globally, and is directly responsible for the operation of the companys production facilities worldwide. Information services function is responsible for the companys global systems infrastructure and global systems, including enterprise resource planning systems.

Required

(a) Analyse and review the four (4) factors RTK Plc need to consider before deciding whether to hedge the risk using the foreign currency markets.