Global Competitiveness - The impact of movements in exchange rates - 4.2.5.
Global competitiveness - is the ability of a business, usually a MNC, to perform better than its rivals across markets in different countries. This can be achieved through performance on price and quality or customers' perception of these factors. Exchange rates - is the price of one currency expressed in terms of another e.g. £1 = $1.65. This means that an American would need to pay $1.65 to buy each £... or, we would need to pay 65p to buy each $. The exchange rate decides how much currency has to be spent by a business in order to buy a specific amount of another currency. Exchange rate movements are fluctuations in value between currencies, which can result in losses to businesses that import and export goods and to investors. EXCHANGE RATE APPRECIATES... This means that; Exports are less attractive in terms of price competitiveness and businesses will find it harder to compete with competitiors as their products will be more expensive in terms of the local currenc...