Market Competitiveness, Risk and Economic Return: The Case of the Limassol Juice Company

Harvard Institute for International Development, Development Discussion Paper No. 380, July 1991

68 Pages Posted: 28 May 2001 Last revised: 14 Dec 2016

Savvakis C. Savvides

Queen's University - John Deutsch Institute for the Study of Economic Policy; Cyprus International Institute of Management (CIIM)

Andreas Andreou

C.N.H. Capital Markets Ltd.

Glenn P. Jenkins

Queen's University - Department of Economics; Eastern Mediterranean University

Date Written: July 1, 1991

Abstract

This paper evaluates the strategic options available to a juice drink manufacturing company in Cyprus who is facing serious problems of survival in an aggressive and rapidly changing market environment. Following an initial screening of possible investments, based on a qualitative evaluation of the market, the two most promising strategies are formulated and appraised for financial and economic viability.

The financial appraisal analyses the projected cash flows from the owner's and total investment perspectives. The economic appraisal is then presented along with the workings for the derivation of the economic discount rate, foreign exchange premium and several economic conversion factors for Cyprus. The distributive analysis identifies the externalities generated by the two alternative strategies and allocates them to the various affected groups in the economy. The investment decision is further enhanced by the application of sensitivity and risk analysis which compares the risk profiles of the two strategies.

Keywords: Project Appraisal, Environment, Economic Analysis, Risk Analysis, Competitiveness

JEL Classification: G31, H43, C15, D62, O13, M31

Suggested Citation

Savvides, Savvakis C. and Andreou, Andreas and Jenkins, Glenn P., Market Competitiveness, Risk and Economic Return: The Case of the Limassol Juice Company (July 1, 1991). Harvard Institute for International Development, Development Discussion Paper No. 380, July 1991 . Available at SSRN: https://ssrn.com/abstract=266727

Savvakis C. Savvides (Contact Author)

Queen's University - John Deutsch Institute for the Study of Economic Policy ( email )

Canada

Cyprus International Institute of Management (CIIM) ( email )

P.O Box 20378
Aglandjia
Nicosia, CY-2151
Cyprus

Andreas P. Andreou

C.N.H. Capital Markets Ltd. ( email )

5 Limassol Avenue
2nd Floor
CY-2112 Nicosia
Cyprus
+357-2-719999 (Phone)

Glenn P. Jenkins

Queen's University - Department of Economics ( email )

99 University Avenue
Kingston K7L 3N6, Ontario
Canada K7L 3N6
613 533 6556 (Phone)
613 533 6818 (Fax)

Eastern Mediterranean University

Gazimagusa, Mersin 10
Turkey

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