Skii Case Analysis

Entering an untapped international market can strengthen a business tremendously—but what if the costs outweigh the benefits for the market itself? China has long been an important player on the global stage, but recent advances in manufacturing, natural resources, and energy production have catapulted the expansive country to the forefront of international trade. Currently the world’s fastest growing major economy, China is set to eclipse the United States as the world’s largest economy by 2016. Among various domestic and international plays, one of China’s most fascinating uses of its

2. Imagine that you’re a South Korean fashion magnate looking to expand your line of designer clothing into America. You definitely want to establish a small chain of retail locations, and you’re considering moving your entire manufacturing operation to America. Examining factors of production, risk, inflow of innovation, and competitive advantage, is America a good foreign market to invest in? What strategy will you use to break into the American market from nearly 7,000 miles away?

This case shows us that apart from transaction, translation and economic exposure to currency risk, firms also have the very real strategic impact on their competitive position from competitive exposure. Apart from GM’s exposure to the yen which is reflected in their financial statements, their competitive position vis-à-vis Japanese manufacturers is affected by a potentially declining yen. This is because a declining yen reduces the Japanese manufacturers’ $ cost, enabling them to pass on some of the benefit to US customers and thus taking some of GM’s market share. This will impact GM’s top and bottom line. However, GM has a difficult decision regarding managing this risk.

This looks at the possibility of how SK-II cosmectics product can be a booming brand in Japan for P&G company to grow their market share and have a profitable outcome to cover up for their loss in the last few years.

The goal of this case is to help Sandra Meyer develop a presentation to address Henry Bosse’s concerns about international investments. The general idea is to demonstrate to Henry the benefits of international diversification, if any. To achieve this goal, you need to have a view on 1) the impact of foreign exchange (FX) rates on the return and risk of international investments, and 2) the impact of having more assets on the return and risk of the investment portfolio To form views on these two points, answer the following questions: I. The impact of FX rates on the risk and return of foreign investments 1a) Using data in Appendix A, calculate the

Grove Street Advisors (“GSA”) is a leading fund-of-funds, focused on investing in “low risk” top-tier private equity funds that are not excessively large nor highly levered. GSA is faced with a number of strategic alternatives to help catalyze the firm’s next stage of growth. We propose that GSA expand globally and continue to build expertise in relatively underserved global PE markets such as China and India to help meet its objectives of satisfying customer needs, enhancing its international reputation, staying responsive to trends in private equity, and ultimately maximizing profitability.

A1. Global risks are usually predictable and have a high probability of occurrence but are often referred to as uncontrollable risks (Merna, 2008). Of the risks listed above, one that has more of a global aspect on marketplace activities is the political and regulatory risks. This would include potential losses from expropriation, nationalization, civil unrest, terrorism and significant changes to trade policy. Specifically,

General Motors Corporation, the world’s largest automaker, has an extensive global outreach, which places the firm in competition with automakers worldwide, and subjects itself to significant exchange rate exposure. In particular, despite most of its revenues and production being derived from North America, depreciating yen rates pose problems for the firm indirectly through economic exposure. While GM possesses ‘passive’ hedging strategies for balance sheet and income statement exposures, management has not yet quantified or recognized solutions to possible losses from the indirect competitive exposure it now shared with Japanese automakers in the U.S import

2. Some risks that are common between domestic and international funds are: losing money and management risk. Any investment has some type of risk. Losing money is the first risk that every investment has whether it is domestic or international. Management risk is the bad management decisions that a company makes. Some unique risks that only international funding has are: economic risk, country/regional risk, and currency risk. Currency risk is the chance that the value of a   foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in the currency exchange rates. Economic risk is the stability of a country’s economic. Country/regional risk is political, financial troubles, and natural disasters that will affect the value of securities issued by companies in foreign countries or regions.

In the 3rd stage the comparison the profile of both brands’s target market have discussed.

Due to internationalization these companies have been able to spread their risk. Therefore, if one market is not performing they can rely on the other (diversification)

The cosmetics business is a billion dollar industry. Every year, women are responsible for consuming millions of cosmetic products. The cosmetics industry is so large because of several factors. The media is a huge contributor to the intense pressure to look a certain way. The idea that "sex sells" is evident in gossip magazines, movies, advertisements, music, and more subtly- in the business world. People first notice what race someone is, how beautiful or ugly they are and what clothes they are wearing. Beauty is skin deep; however, first impressions are usually what others use to base their

Aspen has become a public company with more risk adverse investors who want to invest in the core business of the firm and not assume any foreign exchange risk. Foreign exchange risk is a core risk to Aspen’s business because they have many customers outside of the United States. We believe that transferring this risk to the customers would limit Aspen’s growth on the foreign markets: Aspen should keep its current marketing strategy, which includes credit installment payments and payments in local currencies for Japan, the UK and Germany. The current risk management program hurts the company because it doesnot consider Aspen’s expenses abroad that balance sales exposures to currency fluctuations. We then recommend that

As we all known, Sony and Matsushita are two of the largest consumer electronic makers in Japan or even in the world. And in this reading, it points out the different strategies Sony and Matsushita use when they were facing the fierce competition in China ----- Matushita was accelerating its pace on stretching the supply chain in China while Sony unexpectedly decided to shift some of its manufacturing business in China back to Japan. In this article, I will discuss the reasons that lead them to make different decision as well as analysize the advantages and the disadvantages of their decision.

• We recommand P&G to directly invest in this market by focusing only on Marketing and Distribution to roll out SK-II (a special product) in a foreign market. It should not be an advantage for P&G to acquire subsidiaries, or to license or to franchise because resources and capabilities of SK-II are located in Japan. It would be difficult to find same raw materiels to produce SK-II in another country. Exporting SK-II in a foreign market will be better, for that they should emphasize on: • Differentiation advantage, • Changing customer behavior, • Product positionning, • Pricing policy, • Advertisement, • Counseler team…