Welcome to the World of Sony- Unless the Yen Keeps Rising Essay

Welcome to the World of Sony- Unless the Yen Keeps Rising - Essay Example It is also crucial to note that most of Sony’s customers are in the US and Europe and, therefore, making the products in these regions would save the Sony Company a lot in terms of saving on export rates. Welcome to the World of Sony- Unless the Yen Keeps Rising Contraction of the economy causes a lot of financial downfalls in many countries. Japan and the United States of America are not independent. The contraction of the economy made currencies fall, and some of the products became too expensive. The living standards become too expensive for the normal person to survive, thus† luxuries† such as televisions, mobile phones and play station games are not a priority to many. When there was the financial crisis, Japan’s business Sony got into problems. With the fall in the financial market, there was less demand because of the products were too expensive. This, in turn, led to a fall in the company’s profits. With the Japanese Yen extraordinarily strong, the export price was remarkably high and the products were too expensive. There was also a reduction in the demand of the goods. This is because of the high prices set by the company to make a profit. This made a substantial reduction in the sales, and there was a considerable drop in the export earnings. With the dollar being weak, commodities in every part of the world become quite expensive. The money got from Sony in the United States was tremendously reduced. When the dollar becomes weak, other currencies become stronger making it difficult for exporters to export because of the high export rates. This in turn makes exports less competitive, so, people would rather go for local products that are cheap.