RYCO CHEMICAL COMPANY

Using Countertrade
Ryco Chemical Company produces a wide variety of chemical products that are sold to manufacturing firms. Some of the chemicals used in its production process are imported from Concellos Chemical Company in Brazil. Concellos uses some chemicals in its production process that are produced by Ryco (although Concellos has historically purchased these chemicals from another U.S. chemical company rather than from Ryco). The Brazilian currency, the real, has been depreciating continuously against the dollar, so Concellos’s cost of obtaining chemicals is always rising. In fact, the company will probably pay twice as much for these chemicals this year because of the weak real. It probably will attempt to pass on most of its higher costs to its customers in the form of higher prices. However, it may not always be able to pass on higher costs from a weak real; its competitors make all of their chemicals locally, and their costs are directly tied to Brazil’s inflation. Its competitors sell all their goods locally. This year, Concellos planned to charge Ryco a price in real that was substantially higher than last year’s price.
Representatives from Ryco are flying to Brazil to discuss their company’s trade problems with Concellos. Specifically, Ryco wants to avoid its exposure to the high inflation rate in Brazil. This adverse effect is somewhat offset by the consistent decline in the value of the real, which allows Ryco to obtain more real with a given amount of dollars every year. However, the offset is not perfect, and Ryco wants to create a better hedge against Brazilian inflation.
Case Study Questions:

Describe a countertrade strategy that could reduce Ryco’s exposure to Brazilian inflation.
Would Concellos be willing to consider this strategy? Is there any favorable effect on Concellos that may motivate it to accept the strategy?
Assume that both parties agree on the countertrade terms. Why would the cost of obtaining imports still rise over time for Concellos? Would Concellos earn lower profits as a result?

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more