The management team of the company, Target, is concerned about the economic factors that could impact the organization, particularly as the company transitions from being national to a global organization, expanding into SWITZERLAND. They would like you put develop a presentation for them that describes, discusses, and analyzes essential economic factors for their company.
For this assignment, your requirement is to create a presentation that covers
1. The role of banks and how they can use foreign exchange in the purchasing and selling product in the selected market place. (SWITZERLAND)
2. Present how exchange rates within your selected Country’s market (SWITZERLAND) will impact the US bottom line. **Give a specific example.**
3. Present recommended techniques the company can use to protect them from future changes in exchange rates
Needs robust analysis. Supportive relevant quantitative information and analysis. Include: statistics, facts, data. $$, %%%, quantify analysis and perspectives, and show examples. Cite & Support critical facts, statements, and concepts with in-text citations added to the Speaker’s Notes section and the slides of the PowerPoint presentation.
You are to have at least one chart, graph or table
Length: 5-6 slides
(with a separate title and reference slide, not counted towards 5-6 slide requirement).
Notes Length: Have at a minimum 80-200 words for each slide – these notes should be in the Speaker Notes section of the PowerPoint slides.
Be sure to include citations for quotations and paraphrases with references in APA format and style. Make sure your presentation follows good PowerPoint design principles (e.g., readable font, uses one template, one inch borders around the slides) and MUST contain transitions, builds, and animation when appropriate.
Link for info:
The Banking Industry in Switzerland offers flexible loans at low interests as the public debt stands are 34.1% of the GDP as of 2016 (Cai, Kalandarishvili, Miagkyi, Lopez, & Zhang, 2017). Fiscal policies are relatively low and favors free trade providing an extremely favorable conditions for entry into the market. While the Swiss National banks offers attractive asset financing for global businesses the SNB is likely to cut off capital inflows to reduce inflation which currently stands at 0.57% which is one of the lowest rates in the world. With the recent transition, Switzerland is a conducive environment to set up local stores to help the company manage their risks by doing business in the local currencies. Target can buy Swiss products for few Swiss Francs and sell them into the Europe or US market in dollar to add a small profits margin . The company should source their products from suppliers who offer fixed currency rate exchange to cushion them against the forex risks in the country
As of April 2020, the Switzerland Exchange rate stood at 0.970(CHF/USD) (Thorbecke & Kato,2018). Since 1957 the Swiss Franc has remained unshaken due to the large capital inflows, flexible fiscal policies and free trade. These policies have caused major changes in the Swiss Franc therefore fluctuating the exchange rates from time to time. The Switzerland exchange rate does not affect trading relations with other countries. The exchange rate has minimal impact on the economy’s production structure as well as the export and service industry.
Switzerland is a economically stable country with fluctuating exchange rates due to the large change in the Swiss Franc. However, fluctuations in the exchange rates do not affect the export, stock returns and profits of highly manufacturing companies. As evident during the 2007 financial crisis the exchange rate of the Swiss franc appreciated by 30% did not deter the SNB bank from creating a safe haven capital inflows for investors (Thorbecke & Kato,2018). The rise in the exchange do not have major effects on the advanced sectors of production such as pharmaceuticals and watches but have a moderately significant impact medium-high technology products. Following the economic crisis of 2007, did not alter the volume of goods exported from Switzerland declined by a 9 and 13 % with an exception of the service sector. Ideally the exchange rate appreciation or depreciation do not affect the stock and goods prices for watches and pharmaceuticals but topples over machinery and capital goods prices.
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