Rethinking Roraima's Global Industrial Strategy

Given the global and competitive climate of the industries economy, Roraima must reconsider its global strategy. Considering Roraima’s cautious entry into different markets thus far, many topics must be considered before moving forward with a new strategy. These topics include currency exposure, foreign location choices or foreign direct investment (FDI), organizational structure options, supply chain management and political risks.

Currency Exposure

When considering the currency exposure that would need to be managed by Roraima, three aspects must be considered. Transaction exposure, translation exposure and economic exposure. Transaction exposure would be when dealings would be “affected by fluctuations in foreign exchange rate values” (306). Translation exposure would occur when these exchange rate differences show up differently on the financial statements. And lastly, the economic exposure refers to a situation in which the projected “earning power is affected by changes in exchange rates” (307). Economic exposure is the concept that best reflects the overall process of managing foreign exchange risk because it deals with the long-term effects of a global strategy and earning power. The firm would have to be alert to changes in exchange rates enabling them to project their costs and

Roraima will need to determine, regarding the technological factors, if the costs involved will prove profitable in the long run. If not outsourcing might be a more cost-effective venture considering that the management team is focused on the current bottom line. Distributing strategies need to be discussed about how long it will take to get into the customer’s hand and how much shipping will cost based on which country it is coming from. Production factors include “product features, locating production facilities, and strategic roles for production facilities”