CIMA Strategic Case Study Nov 2017 - Steelcast
Steelcast has been considering the use of technology through making of smart watches for the entrepreneurs who are young and wealthy. It has been thinking of tapping this market before its competitors in the high-end markets approach with a new design. However, doing this may result into Steelcast moving out of its conventional designing of watches and offer a smart, sophisticated watch.
While the Steelcast's management is keen to explore this idea, there could be a risk of losing its reputation of manufacturing the classic watches with conventional appearance.
You may draft a report suggesting whether the decision above is going to impact the share prices adversely or positively? Your report should also contain the possible challenges associated with above decision and the ways how these should be addressed.
The new product has worked well with the upcoming economies, seeking demand for Steelcast new range of smart watches. However, customers find it inconvenient to to pay in H$, and therefore Steelcart does not have a choice but to invoice the customers in their local currency. This adds to the risks of foreign currency exposure already faced by the company. Additionally, the repair work undertaken for the customers may be done at the authorised centers at respective locations across countries. However, those authorised dealers also expect the proceeds to be received in their local currency rather than in H$.
The company is considering whether or not to hedge for such exposures, since the currency fluctuations may be positive or negative.
You are required to discuss the implication of not hedging for such risks. Include those risks which have a high impact and a high possibility.
You are required to discuss the