BLADES, INC. CASE
Exposure to International Flow of Funds
Ben Holt, chief financial officer (CFO) of Blades, Inc..has decided to counteract the decreasing demand for Speedos roller blades by exporting this product to Thailand. Furthermore, due to the low cost of rubber and plastic in Southeast Asia, Holt has decided to import some of the components needed to manufacture Speedos from Thailand. Holt feels that importing rubber and plastic components from Thailand will provide Blades with a cost advantage (the components imported from Thailand are about 20 percent cheaper than similar components in the United States). Currently, approximately $20 million, or 10 percent, of Blades' sales are contributed by its sales in Thailand. Only about 4 percent of Blades' cost of goods sold is attributable to rubber and plastic imported from Thailand.