Chapter 1 Case Questions: Blades, Inc. Case

1. The advantages of Blades importing and exporting to another country are that the costs would be lower when handling certain materials they might need. Another advantage is that because the assets are not just in one location, if the economy goes under in the United States the company won’t be completely hurt by the decline.
2. The disadvantages of Blades importing and exporting to another country is that jobs will be cut from the United States plant and employees might get upset and give the company a bad image. Another disadvantage is that it is a new country and rules will be different which might have huge fines attached to it if they aren’t followed.
3. One of the theories of international business that can have a long term effect on the company is exposure to exchange rate risk. Blades will convert everything to the currency that the plant is based in which means that if the economy changes and the rate for that currency declines then the business will suffer along with it which is a huge negative. International trade is a theory can has a short run effect on the company because it allows Blades to penetrate the market at very low risk which can save them money right away.
4. For a long term solution the company might want to either do acquisitions of existing operations or joint ventures. Doing acquisitions of existing operations would help immensely because the operation is already set up and the company just has to train the existing staff or hire new staff and it will cost less because everything is already built. Later on if the company grows at a good speed then eventually doing joint ventures might be a good idea to save costs because more than one firm is invested not just