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International Business Environment

Table of ContentsQuestion 1 2
Why did the contraction of the U.S. And Japanese economies and the rise in the value of Yen hurt Sony’s exports from Japan? 2
Question 2 3
In what other ways has the strong yen affected Sony’s bottom line? What would be effect of a weak Yen? 3
Question 3 4
Given instability in the currency markets, why do you think it is important for Sony to manufacture more products in the United States and Europe and to also buy more from suppliers in other countries in Asia? 4
Question 4 5
What are the major forces that affected the Japanese Yen prior to the global ?nancial crisis in the fourth quarter of 2008? What has had the greatest impact on the Yen since then, and where do you forecast the future value of the Yen? 5
References 6Question 1
Why did the contraction of the U.S. And Japanese economies and the rise in the value of Yen hurt Sony’s exports from Japan
The strong rise in the value of Yen and the contraction of US economy resulted in a sharp drop in exports from Japan. The decline in exports was primarily due to a lower demand for consumer electronic products in US due to the slowing US economy, as well as the strong rise in the value of Yen relative to US dollars or Euros making the exports more expensive or less affordable for foreign countries.
As exporters saw their sales and profits declining, they started cutting operating costs and slashing orders from their suppliers thus creating a ripple effect in the Japanese economy affecting both production and employment. These events and deflation caused a sharp contraction in the Japanese economy where consumers were delaying purchases in hopes that prices would continue to fall. Sony as well as other local companies were hesitant to invest more in technology and or R due to these uncertain conditions thus making their exports less competitive relative to competition.Question 2
In what other ways has the strong yen affected Sony’s bottom line? What…

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