Country Analysis: Foreign Exchange Exposure
Using the same business and country for expansion that you chose in Unit I, address the items below. The webpage The World Factbook can be a helpful resource as you are researching.
- Briefly describe regional transaction exposure and approach, and then provide a fictitious example where a manager from your chosen business would use a strategy to address it.
- Briefly describe regional translation exposure and approach, and then provide a fictitious example where your chosen business would translate a financial statement for use in a different nation.
- Briefly describe regional operating exposure, and then provide a fictitious example where your chosen business would match currency streams of cash flows for different countries under its management.
Your final assignment should be at least three pages in length. Use at least two outside, reputable sources as references to support your research. Adhere to APA Style when creating citations and references for this assignment.
Tourism is currently among the most paying businesses in the world. For this case, the chosen business is travel and tourism. Travel and tourism can do well in any country so long there is a good relationship between the country and other international countries, and also peace is paramount to this business. We all have traveled around different places as tourists, either locally or internationally. Travel and tourism are very common factors that are being talked about by almost everyone. Travel and tourism travel from one place to another mainly for vacation, holidays, pleasure, attractions, historic places, and even scenic places.
Travel and tourism have been chosen in this case because tourism pays well. After all, it is well supported by the country and every institution. This makes the travel and tourism business operations easier since the government will rarely disturb this business (Inhorn et al. 2010). That is because the country also benefits from it in so many ways. The other reason why tourism has been chosen is that it is easier to operate travel and tourism in any place so long as the environment of the given country is conducive and if it supports travel and tourism. There are two types of tourism: international tourism, which means that tourists travel from one country to another. In contrast, domestic tourism means that the people, or rather tourists, travel within their own country.Tourism is a good business since it is profitable at any time since it does not necessarily require people or tourists from other countries to be successful. In recent years, people are making tourism the best thing to do during leisure, and even on any occasion, then tourism is the best business to operate in any given country.
The Emirate of Abu Dhabi has been identified as a place for development. To construct the United Arab Emirates, Abu Dhabi, Ajman, Al Fujairah, Ash Shariqah, Dubai, and Umm al Qaywan joined forces with the UAE and other nations. As a result, this country’s economy has been heavily dependent on oil, tourism, and foreign financial activities over the past three decades. The United Arab Emirates escaped the “confluence of falling oil prices, international banking crisis, or rather the Arab spring,” in large part because they had invested heavily in infrastructure for the poor northern emirates as well as in the aggressive pursuit of political reformers in the country’s northern emirates and other places.
The UAE has played an important role in regional affairs in the Middle East in recent years and will continue to do so. As a result, Egypt’s economy has stabilized in several ways. On top of that, United Arab Emirates was the first country that joined the alliance to destroy ISIS and, at the same time, participated in the Saudi-led military conflict in Yemen (Inhorn et al. 2010). The United Arab Emirates has also seen a considerable increase in tourism, with the bulk of this expansion occurring in Dubai because of its superb infrastructure.
Located in the Middle East, the United Arab Emirates has a border with the Gulf of Oman and the Persian Gulf and a location with Saudi Arabia. The location’s geographic coordinates are as follows: At 24.00 N, 54.00 E is the latitude and longitude. The Middle East is the geographical name given to this region. More than half of the world’s countries are smaller than the United Arab Emirates’ general area of 83,600 square kilometers. The total water area of the nation is 0 square kilometers, indicating that the country is completely made up of land. The two most important natural resources in the United States are petroleum and natural gas. The north-eastern region of the country has a disproportionately high concentration of people.
The three cities of Abu Dhabi, Dubai, and Sharjah are home to almost 85% of the population of the United Arab Emirates. According to the United Nations Population Division, the population was 9,915,803 in 2022.
Compared to the current residential area, the United States of America, the USA is located in North America, bordering the North Atlantic Ocean. Its geographic coordinates are 38 00N, 97 00 W. in the map, referred to as North America. It covers 9,833,517 sq. km, with water covering 685 924 sq. km of this. It has a total population of 337,341,954 as of 2022. The population distribution of the United States of America has a large urban cluster that has been spread throughout the eastern part of the country.
In the travel and tourism sector, it’s hard to see the price difference that could occur. But due to the demand and supply, the market price can change. This can be affected by the marketing mix elements such as the nature of the product and services, the distribution, the promotional strategies, and the price (Abed et al. 2001). The setting of prices in the travel and tourism sector is not an easier thing to do hence the reason why it’s quite hard for it to change. There are a few things that can make the price of tourism in the market change: prestige pricing, penetration pricing, taxes, and high demand when it comes to tourism. The high demand for tourism can be seen once the number of tourism activities has increased in a country; hence the pricing in the market will also increase.
Even though it is easier for everyone to start a business in the United Arab Emirates, a few difficulties might be faced, especially when it comes to the travel and tourism sector. The first difficulty is the harsh climatic condition. Most of the land is covered with desert, meaning the country’s temperatures are high. Another difficulty is the language barrier; most people in the area only speak Arabic, making it difficult to communicate with people who do not speak Arabic. In most cases, a translator will be needed.
Inhorn, M. C., & Shrivastav, P. (2010). Globalization and reproductive tourism in the United Arab Emirates. Asia Pacific Journal of Public Health, 22(3_suppl), 68S-74S.
Abed, I., & Hellyer, P. (Eds.). (2001). United Arab Emirates: a new perspective. Trident Press Ltd.