Interfin

BLADES, INC. CASE

1) Identify and discuss some of the benefits that Blades, Inc., could obtain from DFI.

Answer

* This is a perfect time to either establish a subsidiary or acquire an existing business in Thailand because the uncertain economic conditions and the depreciation of the baht have substantially lowered the initial costs required for DFI. Holt believes the growth potential in Asia will be extremely high once the Thai economy stabilizes.

* In Thailand is substantially below that incurred in the United States, Blades has managed to generate higher profit margins from its Thai exports and imports than in the United States.

* Raw materials at affordable prices in Thailand It will help reduce production costs.

* Expanding its operations to Thailand. There is more variety and reduces the risk of the US economy.

* If Blades acquires an existing business in Thailand or establishes a subsidiary there by the end of next year, it would fulfill its agreement with Entertainment Products for the subsequent year. The Thai retailer has expressed an interest in renewing the contractual agreement with Blades at that time if Blades establishes operations in Thailand the growth potential in future years is high.

2) Do you think Blades should wait until next year to undertake DFI in Thailand? What is the trade-off if Blades undertakes the DFI now?

Answer

Blades should wait until next year to undertake DFI in Thailand because of the Thai economy in the past have some problem and the depreciation of the baht. The blade undertake DFI in Thailand now. It may not make profit a return as it could be or it may be lost .If Blades wait until next year to make decisions it will have more firmly. The economy could be improved and may have less uncertainty associated with the investment. However, in that time it will has more competitors to invest in Thailand as well.

3) Do you think Blades should renew its agreement with the Thai retailer for...