Q1
In this particular situation, I would recommend the product to be produced in-house. This will have various benefits because it will ensure that the risks associated with an increase in currency are handled and the rising costs that the suppliers may set. When the firm has specialized and targets one supplier on investment, it would be very convenient. Outsourcing can only be beneficial when there is a failure when the burden is switched to the suppliers. In-house production can help the business attain higher profit levels because fewer costs are being incurred in manufacturing and distributing the product to the customers. In-house manufacturing can also help apply the right technology to a product, increasing the level of innovation and invention.
Q2
Different countries have different cultures, which means that their consumption patterns affect the costs of operating business. Culture refers to the norms that a particular group of people views as right and acceptable by them. This means that they tend to have choices in demand and consumption rates. When, for example, they are not interested in consuming a certain line of products, and an individual decides to start that type of business in the same area, it will negatively impact purchasing. This will increase the cost of operating a business because the investor will have to look for an optional business opportunity. An example of the culture that impacts business costs is political philosophies, wherein some countries like Iraq, the continued political unrest leads to turning away from potential investors.
Q3
The IMF plays a crucial role in establishing monetary policies and giving government loans to ensure that they finance their operations. On the other hand, it also plays a crucial role in handling issues such as the financial crisis and reducing government spending. Therefore, such monetary policies and reduced government spending are used in handling the issues of the financial crisis in countries. The IMF outlines the policies and regulates how the money given to such countries should be used. This also has various implications for international business. They are expected to reduce because most businesses will lack financial support from the government, and poor economic conditions limit investment options. International business is known to be fully supported by various governments, which means that they are involved in the country’s budgeting process. When spending is reduced, such support is limited to other basic social amenities of the country.
Q4
As a financial officer, I will consider the operations of the business to be changed in Peso. I will consider converting any form of payment ad labor in dollars to be done in Peso due to the expected decrease in the dollars. As an organization, I will do this because we are not yet losing money due to depreciation. In this way, any form of business activities that are going on between the US and Mexico should stop.
Q5
The major drive to the growth of the global market is technology. It has made the world a global village where businesses can operate their activities with more ease without necessarily straining their resources. This is expected to increase and continue to greater levels. The technology change is still advancing, and the research and development are being incorporated in the business sector. Every business activity, including production,
is incorporating technology in production.