Amplifon Case Study

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time there is the risk of not grasping them. Therefore, the management board of Amplifon boosts their marketing operation to follow these trends and influence them by developing the suitable communication channels.
Technological innovation plays an important role in the growth of the Amplifon Group; therefore, the corporation has set up a workgroup to monitor technological development in fitting the product, and informing Corporate Managers on all innovations and changes. The workgroup is also studying and developing alternatives to hearing aids and new marketing methods. Relationships with the medical profession
Another crucial consideration for the Amplifon Group is to keep the good relationships with the medical profession when there …show more content…

Foreign exchange transaction risk exists when the future cash transactions of a firm are affected by the exchange rate fluctuations. In the Amplifon Group, the foreign exchange transaction risk is highly limited thanks to the autonomy of the business operation of each country, incurring costs and revenues in the same currency. However, there still exists the transaction exposures arising from investments in listed financial instruments denominated in a different currency to the investing company’s functional currency.
Foreign exchange translation exposure results when an MNC translates each subsidiary’s financial data to its home currency for consolidated financial reporting. Foreign exchange translation risk arises from investments in the following countries: United States, United Kingdom, Switzerland, Hungary, Turkey, Poland, Australia, New Zealand, India and Egypt. The functional currencies of the subsidiaries in these countries are different from the Euro …show more content…

The Amplifon Group’s strategy is to increase the cash outflows to offset the cash inflows of these currencies.
The intercompany loans between the companies in Australia and New Zealand, and an intercompany loan granted by Amplifon S.p.A to its English affiliate, are considered equity investments in sofa as they are not interest bearing and are not expected to be repaid. Any change in exchange rates are, therefore, changed directly to the translation reserve without impact the income statement.
However, for insignificant amounts of other intercompany transactions and investments in quoted instruments in the foreign currency, the Amplifon Group does not give them the hedging. This can be because that the hedging costs would be high and it is not necessary for the small

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