Name: Khizra Saleem
CMS#401475
Program: BBA 8th
Assignment: IBM
Submitted to: Sir Amjad
BLADES, Inc. Case
Question 1: How could a higher level of inflation in Thailand affect Blades (assume U.S. inflation
remains constant)?
Answer:
As per my understanding the higher level of inflation in Thailand can affect Blades because due to inflation
in Thailand foreign goods will become cheap this make an impact on import and export of Thailand.
Thailand people prefer to import the goods and services from overseas and exports of Thailand become
go down. So as a result the imports of rubber and plastic components from Thailand for Blades Inc. will
suffer and it will increase their production cost and on the other hand the customers will purchase
products from Blades Inc. at a lower price relative to others which will increase the export of Blade [Link]
their sales will also be increase.
Question 2: How could competition from firms in Thailand and from U.S. firms conducting business in
Thailand affects Blades?
Answer:
In this case Blades Inc. can conduct their business in Thailand in Thailand currency. The other competitors
who export roller blades to Thailand invoice their exports in U.S. dollars. Blades Inc. have competitive
advantage to do business in Thailand baht because of the competitive advantage of Thailand currency the
Blade Inc. allows importers to continue their business without less consideration about paying different
amounts due to currency fluctuations. In case of export Blade Inc. has an advantage of providing best
quality products and flexible pricing strategy to customers which gives them a good position in Thailand
and increase their sales in Thailand.
Question3: How could decreasing level of national income in Thailand affect Blades?
Answer:
As per my understanding if the level of national income decrease so it creates a problem for Blades. With
the low income Thailand customer is not willing to accept the high price product. They try to find a cheaper
product and ready to accept a lower quality of product so that is what Blades can face the problem if
national income in Thailand decrease. Blades has a high manufacture process, have a high quality product
with attractive design so the price couldn’t be low. So if Blade’s decide to reduce the price to attracted
customer it will affect the profit of the blades profit will go down or maybe it will consider as a loss for
blades. In this case the decreasing level of national income is not good for a Blades Inc.
Question4: How could a continued depreciation of the Thai Baht affect Blades? How could it affect
Blades relative to U.S. exporter invoicing their roller blades in U.S dollar?
Answer:
A continued depreciation of the Thai Baht is not good for Blades it will affect too bad to Blades because
Blades decided invoice in Thailand [Link] it is a disadvantage for Blades if the value of Baht go
down. The competitiveness of Blades also decreases. But the competitors of Blades which using US
dollar to exchange that is not a problem for them If the Thai Baht depreciates the importers will have to
convert more baht to dollars in order to pay for the dollar denominated exports.
Question#5: If Blades increases its business in Thailand and experiences serious financial problems, are
there any international agencies that the company could approach for loans or other financial assistance?
Answer:
As per my point of view if the Blade Inc. increases or expand its business in Thailand and experience
serious financial problems then Blades can take loan from International Financial Corporation. The
International Financial Corporation not only provide the loans to corporations but also buy the stocks
of that corporation. International Financial Corporation acts as a catalyst or promoter. International
financial corporation provides loans to corporations to promote economic development of private sector.
