! Case Study 6 Foreign exchange hedging strategies at General Motors: Transactional and translational exposures ! General Motors (GM) was the largest automaker in the world‚ and the unit sales in 2001 was 8.5 million vehicles which occupied 15.1% of the total vehicle market. With the expansion through the world‚ GM faced more risk in the foreign exchange (FX). In other world‚ it would create gains or losses due to the changes in FX rate. According to the exhibit 2 and exhibit 3‚ Latin
Premium United States dollar Currency
1. Did Schindler make the right choice in assigning Silvio as general manager of India? I do not believe Schindler made the right choice in assigning Silvio as the general manager of India. Silvio had little to no "real world" international experience. Silvio had much success in Sweden but there are several factors that limited his success in India. Silvio had high "warrior" and low "monk" attributes. Silvio was a task oriented individual. This management style is not well received in India
Premium Management
engineering‚ on the other hand‚ can create plants with the exact desired trait very rapidly and with great accuracy. Not only can genes be transferred from one plant to another‚ but genes from non-plant organisms also can be used. Some advantages of the GM foods are 1.Herbicide tolerance: Farmers only require one application of herbicide instead of multiple applications‚ reducing production cost and limiting the dangers of agricultural waste. 2.Disease resistance: There are many viruses‚ fungi and bacteria
Premium Genetically modified food Genetic engineering Genetically modified organism
Brittany Matthews Principles of Management Case Analysis #1 Which of the four basic strategy types were used by GM? Explain your rationale. It seems in the beginning it was the Analyzers‚ GM has been following the trend of most other car companies‚ making more and more cars and offering such a large selection but with sales not following that trend it hurt them financially to the point that had it not been for a bailout that they would of had to of filed for bankruptcy. It wasn’t until the bailout
Premium Automobile Vehicle Vehicles
However‚ GM has a difficult decision regarding managing this risk. GM can quite easily justify hedging its transaction exposure to yen‚ as well as its yen denominated assets and liabilities. However‚ taking measures to manage currency risks stemming from competitive exposure is tricky because of various reasons: • Difficulty in accurately measuring exposure‚ leading to high estimation cost. • Justifying any measures as non-speculative. • Conducting transactions that take GM away from its
Premium Cost Currency Japan
Ford is 120 percent while the current ratio of GM is 89 percent. The current ratio measures the company’s ability to pay short term and long term obligations. As Ford has the higher current ratio over GM‚ it depicts that Ford is more capable of paying its obligations to the creditors. The quick ratio of Ford is 110 percent while GM has 73 percent. Quick ratio is an indicator of company’s short-term liquidity. As Ford has the higher quick ratio over GM‚ it shows that Ford has more abilities to meet
Premium Balance sheet Financial ratios Asset
Executive Summary GM plans to release a new 5 door sedan‚ extended range electric vehicle which will be known as the Volt‚ a promotional image can be seen on the report title page. Our goal is to achieve 100% customer satisfaction so our focus will be on product quality; The Chevy Volt‚ an advanced technology with standard equipment features. We will be the first automobile company to enter this specific industry so to take advantage of our launch of the most fuel efficient car that we will do
Premium Plug-in hybrid Electric vehicle Chevrolet Volt
------------------------------------------------- FE Hedging Strategies at GM Should MNCs hedge foreign exchange rate risk? Multinational firms hedge foreign exchange risk in order to ensure operational and financial functionality. A MNC should hedge foreign exchange risk so it can prevent cash flow effects of the foreign firm and the decline in value of the equity holder because of the movements in exchange rates. It will also help them to reduce transaction costs when obligated to make payments
Premium United States dollar Currency Foreign exchange market
Choice Is Your Choice How would you feel if you went to the store and you were told what to buy? What if you were told what to do? What if you had no choice in where to go or what to wear? How would you feel if these choices were limited to just two or three choices to choose from? In this day and age‚ the variety of choice has grown to almost limitless. This abundance of choice gives people the opportunity to be different. Individuality would mean nothing if we all wore the same clothes‚ ate the
Premium Decision making software Choice Thought
would send his own explorers to find a new passage‚ Columbus was the best choice for this mission. It was not because he was the best explorer available‚ but because he was the only one willing to make the trip and because Spain did not want to send its best navigators on such a mission. At this time‚ Spanish explorers were perfectly comfortable with traveling around Africa to India. The chosen path was always close to land and was well known. Few wanted to travel into unchartered ocean to find
Premium Christopher Columbus Spain United States