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Discuss whether (or not) Levi's should manage the uncertainty caused by currency fluctuations and make recommendations...

Discuss whether (or not) Levi's should manage the uncertainty caused by currency fluctuations and make recommendations on risk management strategies accordingly.

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Answer #1

Levi's has to manage the uncertainty caused by currency fluctuations as it is an international company that has operations worldwide. The currency fluctuations around the globe would have an impact on its revenue. The company must protect its cash flow and profit margins by effectively managing the currency fluctuations. The following are the recommendations to manage the uncertainty caused by currency fluctuations.

  • The company has to focus more on markets having strong and rising currencies.
  • The company can make use of the currency-hedged funds for overcoming the risk of currency fluctuations.
  • The company has to diversify its business further especially to emerging markets.
  • The company must review its operations on a continuous basis to understand the currency fluctuations.

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