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A decade ago, the Japanese yen stood at about 120 Yen/$; 10 years later, the Japanese yen is trading at about 105 Yen/$. Consider the
- A decade ago, the Japanese yen stood at about 120 Yen/$; 10 years later, the Japanese yen is trading at about 105 Yen/$. Consider the case of the heavy earth-moving equipment industry, consisting of essentially two major players globally, US-based Caterpillar and Japan-based Komatsu.
- What has happened to the Japanese Yen and how does it affect the relative competitive positions of Caterpillar and Komatsu? Explain your answer clearly and briefly.
- How should this affect the strategic behavior of the two firms? You may wish to answer this question first from the short-term perspective, and then from the long-term perspective.
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