International Finance, Markets and Management

International Finance, Markets and Management

Answer 1

Blades, Inc can have many advantages from importing goods and services from Thailand, because in current times, the economy of Thailand is suffering from huge downswing. This weak condition of Thailand's economy can certainly give advantage to Blade Inc by importing raw material from their country. Importing goods from Thailand can reduce the cost of products and Blades Inc can have good profit margin on them. It is important to analyze that if production of goods get expensive then it is better to import it from foreign countries in cheaper price. Moreover, the transportation cost of imported goods is lower than shipments within the boundaries of United States (Madura, 2008). Undoubtedly, the importation of supplies and raw material is cheap than production in the U.S.A. The cost reduction of products can reach on the good economic scale.

If we see the exporting side of the company, Blades, Inc can also take benefits from exporting goods as well. Blades, Inc might be the primary company, who would export its roller blades in Thailand. The process of export can also further enhance the chances of business growth in Thailand as it will offer an opportunity to build initial relationship with the suppliers of Thailand. Moreover, this can also increase the competition level, because there are many competitors who are exporting and importing goods and services from Thailand. But if we see the more benefiter side, we can conclude that importing goods and services would be more advantageous than only exporting to Thailand. Currently, the economy of Thailand is weak therefore; they might be not interested to get expensive export from U.S based company for fulfilling economic needs (Noble, 2013).

It's important for all competitive business to constantly look on the areas of improvement into the header of supply chain management while decreasing its cost in the process. The company of Blades, Inc can increase its profit margin by holding positive ways for achieving their primary target. Exporting and importing goods from foreign countries like Thailand can offer many advantages, such as high quality in low price, cheap labor, foreign association and chance to merge in foreign affairs. Therefore, it will be a good decision to have trade relationship with Thailand.

Answer 2

Certainly, there are some disadvantages in foreign trade to which Blades, Inc must consider them while operating in short or long term.

In short run, the company might face the following problems or disadvantages:

Risk of foreign Exchange

The fluctuation of currency might twist the shape of export. As Thai's economy is emerging, therefore; volatility the rules of foreign exchange might affect the cost related exports and also impact on the ratio of profitability.

Cost of Transportation

The transportation cost is very important to look at because Blades, Inc would first import raw material from Thailand, and then will again export the furnished product to other foreign countries. This can cause enormous cost of transportation for the firm.

Exposure to economic situation

The growing prices of goods should ...