TREASURY & RISK MANAGEMENT - Essay Example

The TMEM’s president had to come up with a proposal, on how to reduce and even eliminate the losses, and present it to the company CEO in Japan. Therefore, this case analysis will seek to provide possible reasons that could have forced the company to delay shifting its manufacturing centers for European market to Europe. Also, analysis of both the effects that could have been experienced if the Euro had joined European Monetary Union and other factors on the company’s situation will be provided.

Next, possible problems leading to the losses being experienced by the company will be categorized into either short term or long term. The final part of analysis will provide recommendation of appropriate measures that the company should have taken to resolve the problems. There are a number of reasons that might have forced Toyota to delay in moving its manufacturing for European sales to Europe. The most probable reasons could be associated with the depreciation of Euro against major currencies, the expected costs of setting up the plant, availability of labor, anticipated risks of either losing their intellectual property as a result of theft, need for up-to-date innovations, strategic problems as well as feeling of being unprepared.

To begin with off shoring manufacturing to Europe without a clear thought of plan could have resulted into two strategic problems (Wood 2009). One of the strategic problems is logistical issues. Spreading out manufacturing activities without having a good plan in place could expose the company to unexpected disruption of important supplies. Although the need to offshore manufacturing to Europe could have been appropriate in enabling the company to compete with its rivals, responding to customers’ needs could have been a problem (Bessis 2011).

The other reason that could have resulted to a delay in shifting manufacturing to Europe