Course Project

Introduction
Throughout this term your will create a small multi-national corporation (MNC) using creativity and current research regarding country and financial risks, as well as demand. The first task is to create an idea for your own MNC to conduct international business. Your idea should be simplified to the degree that you could possibly implement it someday. However, your idea should also be sufficiently creative to be successful if done properly. Your idea should focus on one country and one foreign currency, since many MNCs are focused in this manner when they are first created. So that you can recognize the issues regarding exchange rate risk that are discussed throughout this text, you should assume that you will receive foreign currency when selling your product. Your idea should be for a small MNC instead of a large MNC because even most large MNCs began as small firms.

Each week you will add components to your MNC creation plan using the concepts that were discussed in the course in the current week as well as outside research that will support your decisions and demonstrate future success of your MNC.

Activity Instructions
Provide answers to the following MNC components using both information and concepts from the text as well as outside research to support your statements and probable MNC success. You can organize your paper using the headings and statements below to make sure you include all of the appropriate information.

MNC Background Information
What is the product that you plan to sell?
What foreign country do you plan to target?
How will you sell the product in that country? (i.e., through a distributor? by mail?)
Is there some evidence that consumers in that country would buy this type of product?
Do you need to purchase supplies or to hire labor?
Will any expenses you incur from producing the product be in dollars or some other currency?
Assessing Country Factors That Will Affect the Demand for Your Product
Identify the factors that can affect the balance of trade between the United States and the country that you targeted for your business. Explain how each of these factors may affect the demand for your product.
Which of these factors is likely to be most important in affecting the demand for your product?
Assessing Trade Data
Determine whether the product you plan to sell is already one of the main exports to that country.
Accessing Import Controls
Review the import controls set by that country’s government.
Determine whether your business would be affected by trade regulations.
Using the Foreign Exchange Market
Explain how you will use the spot market for your business.
What bank do you plan to use to exchange the foreign currency received for dollars? What is the bid/ask spread on a recent quotation by that bank? (Call the bank to obtain quotations.)
Will you possibly need the forward market? Explain.
Accessing Recent Exchange Rates
Go to the Oanda Corporation’s website. Click on “Currency Converter” and then click on the “Historical Exchange Rates” tab.
Explain how the main foreign currency for your business has changed over the last month, the last three months, and the last year.
Monitoring Movements in the Foreign Currency’s Value
What key factors likely affect the value of the foreign currency of concerns over time?