3 Do you think Blades should renew its agreement with the Thai retailer for another three years?...
Question:
3 Do you think Blades should renew its agreement with the Thai retailer for another three years? What is the tradeoff if Blades renews the agreement?
For the last year, Blades plc has been exporting to Thailand in order to supplement its declining UK sales.
Under the existing arrangement, Blades sells 180 000 pairs of roller blades annually to Entertainment Products, a Thai retailer, for a fixed price denominated in Thai baht. The agreement will last for another two years. Furthermore, to diversify internationally and to take advantage of an attractive offer by Jogs Inc., a US retailer, Blades has recently begun exporting to the United States. Under the resulting agreement, Jogs will purchase 200 000 pairs of ‘Speedos’, Blades’ primary product, annually at a fixed price of $80 per pair.
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