What to do when exchange rates have a negative impact on revenue?

31.October, 2009

Let’s say that an exchange rate has a negative revenue impact of -4 to -6%. What do you do? Would you decrease your advertising in that country, increase prices, limit the number of products shipped there? What would be the best strategy?

Since oil is pegged to the US $, Oil cartels increase prices, right?
If they do not increase oil prices, their dollars received for a barrel of oil is worth less in foreign markets. Buying power decreases for them.

This may become a common occurrence with the US $.
China is feeling it. Their prior investments are worth less that they paid in principle. Treasury bonds are now issued for 3-4 years. Unheard of in past years, but it’s a result of the $ deteriorating in value over long term.

You still should be competitive with all other imports, as they all are experiencing the same phenomena.

The last consideration should be demand for your product and competitiveness. If those are diminished, you may need to restyle or revamp your marketing strategy or product lines.

It’s not unheard of to cut the quality of a product, although that can be negative.

Posted by: admin in: revenue 1 Comment »

1 Comment für “What to do when exchange rates have a negative impact on revenue?”

  1. jake sagt:
    01.November, 2009 um 4:26 am

    Since oil is pegged to the US $, Oil cartels increase prices, right?
    If they do not increase oil prices, their dollars received for a barrel of oil is worth less in foreign markets. Buying power decreases for them.

    This may become a common occurrence with the US $.
    China is feeling it. Their prior investments are worth less that they paid in principle. Treasury bonds are now issued for 3-4 years. Unheard of in past years, but it’s a result of the $ deteriorating in value over long term.

    You still should be competitive with all other imports, as they all are experiencing the same phenomena.

    The last consideration should be demand for your product and competitiveness. If those are diminished, you may need to restyle or revamp your marketing strategy or product lines.

    It’s not unheard of to cut the quality of a product, although that can be negative.
    References :

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