What options are available to sony in strong yen environment

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Reference no: EM131027089

Assume that, on an average, Sony spends ¥30,000 to manufacture its products in Japan and spends $30 on marketing and distribution in the United States. Sony sells the product in the United States on an average at a price of $350 per product. Sony sells 20 million units in the United States.

If the exchange rate changes from USD 1 = JPY100 to USD 1 = JPY 75. How this impacts Sony’s cost of the product? Support your answer with numbers.

If Sony were to keep the price at $250, what will be the impact of change in the exchange rate mentioned in part a on Sony’s profitability?

What options are available to Sony in strong yen environment?

If the same products were manufactured in the United States at a cost of $150 per piece and 40% of the parts were imported from Japan, what would be the impact of new exchange rate on Sony’s cost and profitability?

Reference no: EM131027089

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