Quiz 7: Dealing With Foreign Exchange


Jobek's situation from resource and institution point of view Jobek has to take a fallback position to overcome the financial exchange risk and give up some of its capabilities in order to survive in the market. Jobek shut down its plan and outsourced its production to Reed Isaac and also, signed a contract with Stern GmbH. Jobek Do Brasil also faces challenges from Brazilian Government by changing the rules of the game in order to minimize the risks arising from high inflation, low growth and failed stabilization policies of the government. Resources and Institution hindered Barny to cope up with the situation as having valuable resources and capabilities is not enough, but these resources and capabilities should be rare also in order to be competitive and also, resources and capabilities may not give a firm a sustained competitive advantage if it is not properly organized. Thus, with low rarity and less organized resources and capabilities, Barny was not able to cope up with the situation Simultaneously, Resources and Institution also helped him to turn his company around as with high value, hard-to imitate resources and capabilities and proactive strategy, Barny built up a strong brand according to the lifestyle of the Latin America and linked the brand with environmental friendliness.

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Exchange rate in dollar and euro: The trend of exchange rates over past few months can be recapitulated as follows: img The exchange rate trend shows that the euro has become stronger over past five months. Advantages from sales to European country: • The stronger euro will attract the exporters of United States. • The U.S. firms face less competitive pressure to keep prices low.