Question

You are the Chief Executive Officer (CEO) of Landsdale Corporation, LLC, with headquarters in New York City. Landsdale manufactures medical equipment. For fiscal year 2019, Landsdale’s profits were 5 billion dollars. Landsdale opened a subsidiary in Mexico in February 2019. Business was good in Mexico until coronavirus struck in January 2020. International travels have now been suspended indefinitely and supply chains have been disrupted. Explain in detail your policy prescriptions and business decisions relative to maintaining the subsidiary in Mexico.

Please be specific relative to the following:

A) Coronavirus B) Exchange rate volatility C) Consumer demand

Answer 1

Business decisions relating to the specific factors should be mentioned below-

A. Coronavirus-it can be seen that the company has opened a subsidiary in Mexico and the international trade has been halted and it will mean that the crisis is going to impact the company in a negative way because there is no visible certainty of reopening of operation any sooner because there is no availability of vaccine so it can be seen that the business of these two units will have to be working in isolation till the coronavirus crisis is existent.

B.business decision related to the exchanges rate volatility would be immense to this business because the currency of emerging markets has fallen drastically and Mexican peso has also fallen drastically so it will be leading into a translation with related to foreign currency exposure on the books of the parent company and it would be decreasing the value of the overall profits of the company.

C.the consumer demand across the globe has fallen drastically amid the concern of coronavirus so There is decrease in sales and there is decrease in profits and the curve is likely to remain downwards because there is no visible certainty of reopening of operations as the cases are spiking and there is also a fear of contagion among employees so the company should be looking to conduct more businesses and accept demand online and try digital business.