A

CASE PRESENTATION
ON
BLADES, INCORPORATED

PRESENTED TO:

Prof. Sushil Mohanty
PRESENTED BY:
Zanza Patel (Roll no: F 21)
Kinjal Patel (Roll no: F15)

Blades. Inc. Case
Ben Holt is the chief financial officer of Blades Incorporate.
Blades Inc. is exporting its Speedos roller in Thailand.
Blades Inc. is importing rubber and plastic components from
Thailand.
This components cheaper than similar components in the U.S.
It is follows a policy of invoicing in Thai baht(Thailand Currency).
Factors Affecting Blades. Inc.
1) Inflation
2) National income
3) Exchange Rate (Currency Fluctuate)
4) Competitors
Blades. Inc. Case Solution
Q 1: How could a higher level of inflation in Thailand affects Blades
(assume U.S. inflation remains constant)?

Answer:
Higher level of inflation in Thailand can affect Blades. Due to inflation in Thailand
foreign goods will become cheap. Again inflation will increase in an increase of imports
and at the same time exports will go down. As a result imports of rubber and plastic
components from Thailand for Blades Inc. will suffer and it will increase their
production cost. On the other hand due to inflation in Thailand customers will get
products from Blades Inc. at a lower price relative to others, which will increase their
(Blade Inc.) export to rise. Eventually their sales will increase.
Cont..
Q 2: How could competition from firms in Thailand and from U.S. firms
conducting business in Thailand affects Blades?

Answer:
The main competitive advantage of Blade Inc. in this case is that they conduct their
business (both export and imports) from Thailand in Thai Baht (Thailands currency).
The other competitors who exports in Thailand invoice their exports in U.S. dollars.
On the other hand because of competitive advantage of Blade Inc. allows importers to
continue business without less consideration about paying different amounts due to
currency fluctuations. In case of export Blade Inc. has an advantage of providing
quality products and flexible pricing strategy, which gives them a good position in
Thailand.
Cont..
Q 3: How could a decreasing level of national income in Thailand
affects Blades?

Answer:
When national income of a country decreases that reflects in a decreasing demand for
foreign goods. As a result imports on the part of home country decreases. A decreasing
level of national income in Thailand will reduce their demand for Blade Inc. products,
which will decrease the sales of Blade Inc.


Cont..
Q 4: How could a continued depreciation of the Thai baht affect Blades?
How would it affect Blades relative to U.S. exporters invoicing their roller
blades in U.S. dollars?
Answer:
A continued depreciation in baht may affect Blade Inc. in their export. Though Blade
Inc. meet some of their expenses in Thai baht, but in case of currency conversion Blade
Inc. gets less amount of U.S. dollars because of Thai depreciation. As Thai baht
depreciates export in Thailand will unlikely to increase. Blade Inc. will be benefited
against other U.S. competitors because their competitors invoice their product in U.S.
dollar while Blade Inc. invoice in Thai baht. So if baht depreciates Thai importers have
to pay more baht to dollar in case of payment to other exporters.
Cont..
Q 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 assistances?

Answer:
If Blade Inc. increases its business in Thailand and experience serious financial
problems then Blades can call for loan from International Financial Corporation (IFC).
IFC not only provides loans to corporations but also purchases stocks. International
Financial Corporation acts as a facilitator. It provides loans to promote economic
development of private sector.

Thank you