Economic/ operating exposure: the impact of changes in real exchange rates relative to the MNE’s competitors, so what the effect is on the net present value of the MNE’s future income streams. D.R Lessard and J.B Lightstone made recommendations to minimize this impact, senior managers should strive to:
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Have a flexible sourcing structure; which means being able to shift production from one to another country quickly and efficiently.
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Attain the capability to engage in exchange rate pass through; which means the capability to raise prices in response to exchange rate fluctuations without losing sales volume.
Economic exposure is about the negative effects of large unexpected changes in exchanges rates on a firm’s competitiveness related to rivals. This is affected by the geographic configuration of its input and output markets. Firms with the strongest market position, the most differentiated products and the greatest flexibility to shift production will have the lowest negative impact of the fluctuations on its future income stream.
Even firms that are purely domestic, without foreign operations, can incur economic exposure if their rival MNEs are positively affected by exchange rates for internationally sourced inputs.
- Choice assistance with summaries of International Business Strategy - Verbeke - 2nd edition
- What are the conceptual foundations of an international business strategy? - Chapter 1
- Why are core competencies important for an international business strategy? - Chapter 2
- What is Porter’s diamond of national competitive advantage? - Chapter 3
- What is Ghemawat's distance theory regarding international business strategy? - Chapter 4
- How to involve the subsidiary businesses in the strategy? - Chapter 5
- How to exploit research and development subsidiaries internationally? - Chapter 6
- How to exploit foreign manufacturing plants? - Chapter 7
- How to manage an international finance strategy? - Chapter 8
- How to manage an international marketing strategy? - Chapter 9
- How to build an international managing strategy? - Chapter 10
- How to maintain foreign distributor relationships? - Chapter 11
- How to maintain strategic alliances internationally? - Chapter 12
- What strategies are there concerning mergers and acquisitions? - Chapter 13
- How to deal with merging economies? - Chapter 14
- What strategies are there concerning multinational enteprises from emerging economies? - Chapter 15
- How to involve corporate social responsibility in an international business strategy? - Chapter 16A
- How to involve corporate environmental sustainability in an international business strategy? - Chapter 16B
- International Business Strategy - Verbeke - 2nd edition - Glossary
- International Business Strategy - Verbeke - 2nd edition - BulletPoints
- Printed summary of International Business Strategy - Verbeke - 2nd edition
- Choice assistance with summaries of International Business Strategy - Verbeke - 2nd edition
- What are the conceptual foundations of an international business strategy? - Chapter 1
- Why are core competencies important for an international business strategy? - Chapter 2
- What is Porter’s diamond of national competitive advantage? - Chapter 3
- What is Ghemawat's distance theory regarding international business strategy? - Chapter 4
- How to involve the subsidiary businesses in the strategy? - Chapter 5
- How to exploit research and development subsidiaries internationally? - Chapter 6
- How to exploit foreign manufacturing plants? - Chapter 7
- How to manage an international finance strategy? - Chapter 8
- How to manage an international marketing strategy? - Chapter 9
- How to build an international managing strategy? - Chapter 10
- How to maintain foreign distributor relationships? - Chapter 11
- How to maintain strategic alliances internationally? - Chapter 12
- What strategies are there concerning mergers and acquisitions? - Chapter 13
- How to deal with merging economies? - Chapter 14
- What strategies are there concerning multinational enteprises from emerging economies? - Chapter 15
- How to involve corporate social responsibility in an international business strategy? - Chapter 16A
- How to involve corporate environmental sustainability in an international business strategy? - Chapter 16B
- International Business Strategy - Verbeke - 2nd edition - Glossary
- International Business Strategy - Verbeke - 2nd edition - BulletPoints
- Printed summary of International Business Strategy - Verbeke - 2nd edition
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