Blades Inc. Case

Billabong may diversify its production by foreign direct investments in the U.S. e.g. set up local production plants. In case of appreciation in AUD against USD, the price competitiveness of products would not be weakened as compared with local products. Flexible sourcing could be applied to allow switch of production from one country to another. Learning from Stanley Black & Decker, Billabong could reduce its import to the U.S. and export more from the U.S. production plant to other countries when USD depreciate against other currencies. This help to create long-term economic competitiveness in the U.S. market.

* Exchange rates may affect profitability on the business if they are sourcing materials (all the ingredients used to

With their production facilities being located in the US the stability of the dollar can have an impact on the corporation in multiple ways. Weak dollar can decrease assets and ability to acquiring credit. Sales can be less profitable in foreign markets in comparison to foreign currency.

Overall Exchange Rates change every day and depending on how it changes can affect inbound and domestic tourism.

When the firm exports to the other nation, there are several risks that they should concern about. The fluctuation of currency exchange rate is the primary issue. When the domestic exchange rate is depreciated, it is the great opportunity to export more to the other foreign nations. However, when it gets appreciated, it will increase the price of the product for the foreign customers. It will lead the decline of export to the other nation due to lack of attractiveness to import from foreign countries. It happened to the Deere & Company in 2015. The U.S. dollar was depreciated during 2013 to 2014, which attracted other nations to import their products. However, once it got appreciated, their export has declined substantially. It also let declines of stock

Concern for Economy: The unexpected increase in inflation will leads the exports to be more expensive than other countries. Then the exports will decline.

The stronger dollar has allowed to the lowering of production cost. Therefore, production in the mining industry has increased causing an excess supply. Meanwhile, demand has weakened and sales decreased in the international market.

After a decade of sustained growth, the current situation in Thailand is one of unprecedented economic turmoil. The countries exports have halted, foreign investors have become hesitant with their money due to the account deficit, the stock market plummeted, and big loans made by banks have caused a large accumulation of debt. Typical causes of an economic crisis, such as: high debt, large current account deficit, deregulation of the banking industry without proper controls in place, and a semi-fixed exchange rate are all at the forefront of the nation’s current economic state.

In the case of appreciation of the yen, the following impacts could occur to Japanese firms

Economic Considerations: Thailand is great developing country because of the smart economic policies but political environment is not stable so there is effect for investors to pay attention much to invest.

On August 5, 1997 the government of Thailand announced it had reached an agreement with the International Monetary Fund (IMF). The reform included the closing of another 16 finance firms, in addition to the 42 finance firms that were suspended earlier in that year. These firms were asked to merge with banks and other companies or submit other rehabilitation plans. This package

Currency risks are majorly involved with expanding into foreign markets. Due to the fluctuations of exchange rates, apples profits can vary due to demand and supply. The value of a currency is varied due to currency depreciation and appreciation and this fluctuation and

Research into Thailand showed that Thailand’s budget deficit narrowed to $4.2 billion (USD) from $5.1 billion (USD) in 2009. This demonstrates that the government is committed to meeting its foreign debt obligations and has not overextended itself concerning external borrowing. The baht (Bt) will remain strong against the United States dollar and the Bank of Thailand (central bank) will continue to intercede in the market if necessary to limit currency instability. Thailand’s banking sector is currently in a healthy state. It is adequately capitalized and has recorded strong profits in the last couple of years. Thailand’s political risk remains high due to the impending passing of the king and the difficulties that the prime minister has had with the House of Representatives. The economic structure risk is minimal even though the GDP growth has been low in the recent years, but Thailand has demonstrated a strong rebound in 2010 (Economist Intelligence Unit: The Economist [EIU], 2011).

Question 2: How can Better Way stay on the top in Thailand while it looks to expand internationally?

Inflation, in the economic, can be described as the sustained increase in the level price of goods and services over a period of time. The effects of inflation can be diverse in the economy. It can affect the economy in positives and negatives ways. One of the negative way in which inflation affects the economy is that it increases the opportunity cost of holding money, in others words, it decreases the real value of money. A high and prolonged rate of inflation can also discourage saving and investment. Inflation is told to occur when there is an excessive increase in the money supply. Although, an excessive money supply does not necessarily causes inflation. Among the positive effects of inflation in the economy, we can talk about that it allows the central bank to