Toyota Research Paper

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Contents
Executive Summary3
Introduction4
Exchange Rate Risks5
traffic5
Derivatives5
Globalization6
Translation8
International Risk Legal, Economic and semipolitical Risk8
Conclusion9
Appendices11
References13


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Executive Summary
This report is an in discernment case analysis of Toyota Motor Corporation, and how it ?
Introduction
Toyotas strategy consists of manufacturing the volume of its products in Japan and exporting them to the worldwide market. This strategy carries with it about threats, which include an exposure to win over rate risk. In its day-to-day operations the company deals with a fall of currencies which is complemented by exchange rate risks; specifically consummation, translation and operating exposure.
Unlike Toyota, its competitors (Honda and Nissan) do not concentrate their production in Japan. This poses a number of problems to the company, the main one being, its sensitivity to the fluctuation of the Japanese pine specifically with the U.S. dollar and Euro. The strengthening of the Yen could have a signifi stomacht negative effect on Toyotas monetary result due to the fact that automobiles sold worldwide forget need to be retailed at a higher price, this in turn will create a huge injury for Toyota.



This problem is amplified when considering the scope of Toyotas market and all the contrary FOREX fluctuations that the company is exposed too. Toyota has a substantial market lot in North America, Europe and South America, and these markets bring Toyotas major competitors General Motors, Ford in the U.S. and Volkswagen, BMW, Daimler AG in Europe (Hub Pages, 2011). Unlike Toyota, its competitors have decided to protect themselves from the transaction exchange costs by limiting their markets locally and having a production strategy that is domestically concentrated.
By using pecuniary derivatives such as interest rate swaps, forward and options contracts Toyota can minimize its exchange rate risk. However,...If you want to get a full essay, order it on our website: Orderessay



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