Ford Motor Company exports cars to Italy. However, the strong dollar against the euro hurts sales of Ford cars in Italy. In the Italian market, Ford faces competition from the Italian and French car makers, such as Fiat and Renault, whose operating currencies are the euro. What kind of measures would you recommend so that Ford can maintain its market share in Italy? Give at least two measures. [Hint: think of how to reduce forex exposure]
The ways that Ford Motor Company can maintain its market share in Italy:
1. Source products and maintain facilities locally to reduce cost of production and have a lesser selling price to sell more units. This will reduce the dependency on foreign currency transactions.
2. It can enter in to a forward contracts or option contracts to protect against receivables risk.
Ford Motor Company exports cars to Italy. However, the strong dollar against the euro hurts sales...
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