1-case, company, problems
the case tell the situation of two a language like german companies who supplied the automobile company DaimlerChrisler a single made loss, the additional mad revenue
- German business SMS Elotherm dealing with america company DaimlerChrysler german firm Keiper working also with DaimlerChrisler
1-3-issues: FOREIGN RISK EXCHANGE
One of these two companies has managed to possess a successful organization, the various other one knowledgeable dramatic reduction: issue may be the exchange charge which has inspired each organization in a different way:
• TEXT MESSAGE Elotherm (contract in 2004) manufactured their parts in Germany and after that exported those to the US, was payed in dollars by D§C then translated in euros: skilled serious deficits due to the translation exposure: the currency exchange level changed together impact on the benefits of the company. TEXT Elotherm could'nt rise its prices to cover its costs, because of market pressures which impose affordable: in this case, it might have been no more competitive
•Keiper (contract signed in 2001) stated in London and Ontario to offer in ALL OF US. At this time, 1€=1$. When the european had then appreciated against the dollar, the corporation had a true hedge up against the rising of the euro benefit, but , regardless if being located in Canada have been good mainly because close to ALL OF US, the US dollars has also depreciated against the Canadian dollar and secondly, Keiper was still adding from Philippines and € has also lowered against the Canadian dollar which had lead to rise the expenses of the Canadian plant
2-Analysis in the companies' problems
2-1-context: the foreign marketplace risk (currency rates)
•What is the exchange rate involving the U. S i9000. dollar as well as the Canadian dollar and €, what experience it been in days gone by, and and what will it look like in the future?
•Look with the published predictions (found very easily through websites, so only tell the main forecasts trends) Look at the economic fundamentals of...