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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Economic exposure
Hi,
“marketing strategies may be used to offset economic exposure. for example, if UK products were to become relatively expensive in the US due to the fall in the value of the dollar,a UK company might adopt intensive marketing campaign to create better brand or quality image for its products.” kaplan.
confirm my understanding of the extension of the above statement:
intensive marketing by the UK company will compensate the demand lost in the US as result of price increase in the US. so the sales lost in their US subsidiary will be covered by the new sales gained by the UK company to cancel out the risk of fall in the value of the company as a whole.
thanks, john.
Yes, your understanding is correct.
thank you.