INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
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Question
Chapter 17, Problem 22PS
Summary Introduction
Case summary:
Mary Smith is an analyst of Bank of Ireland, hired for analyze wineries of French wine industry and present a report for examines competition on wineries market. Mary Smith analyzed past five years record and examine profit margin, market share and cost management system. Mary smith identified four major French wineries available for wine industry and made a table for characteristics of such areas. After examination of records available, Mary smith identified few key points about the bargaining power of buyers of French consumer. Mary Smith presented draft report to Mr. Ron VanDriesen for review. Mr. Ron VanDriesen reviewed report and discussed about the strength and weakness of such areas. Then Mr. Ron VanDriesen asked Mary smith for few correction in report and few matters for further analysis.
Character in this case:
Mary Smith, Mr. Ron VanDriesen
Adequate information:
Mary Smith is analyst of Bank for analyzing wine industry.
To select:
The impact of appreciation in French home currency against English currency on the competitive position of the East winery i.e. whether less, equal, or more competitive.
Introduction:
As per global economy system, exchange rate is the best factor that affects the international market competition between home country and other country. Any change in currency exchange rate affects market position of the products of that country in other country.
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Students have asked these similar questions
Your company located in the US imports raw materials from Europe. If the European Central Bank announces to lower the Euro exchange rate, what impact do you expect to see in your business?
A.
Your company will pay higher US dollar costs to import from Europe.
B.
Your company will pay lower US dollar costs to import from Europe.
C.
The Euro exchange rate doesn't have any impact on your company.
D.
It should reduce your competitiveness in your home market.
Compare Sweden's H&M and Spain's Inditex/Zara marketshares of their home country markets. Which company has space to
grow in its home markets? In other words, a firm with larger marketshare has less space to grow in its home market whereas a
firm with smaller marketshare has more space to grow.
O There is insufficient data in the case.
O Inditex because its marketshare in Spain is lower than H&Ms marketshare in Sweden
O Inditex because its marketshare in Europe is lower than H&Ms marketshare in Europe.
O H&M because its marketshare in Swede is lower than Inditexs marketshare in Spain.
In general, a firm that concentrates on local sales, has very little foreign competition, and obtains foreign supplies (denominated in foreign currencies) will likely ____ a(n) ____ local currency.
A. none of these
B. benefit from; depreciated
C. be hurt by; depreciated
D. be hurt by; appreciated
Chapter 17 Solutions
INVESTMENTS(LL)W/CONNECT
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