Final Assignment

Consider financial aspects such as the exchange rate that the company was expecting vs
what they are like now, interest rates, inflation levels, and others. What are the
implications?

Russia’s conflict raises financial risk stability and poses questions about the longer-term impact
on economy and the market. An example is with interest rates increasing when a country goes to
war. And we also can see that during and after a major war inflation is typically increased.

Consider political and social aspects, what does this mean to the company?

In this case, the offending countries find new trading partners of financiers before they start to
feel the impact. The more businesses pull out, the less economic sense it makes for others to
remain. The cost of doing business in Russia rises. And it makes it harder to find the goods
needed to keep the business running. It makes companies not being able to earn any money in the
Russian market. And even if they did earn money, they would have no ability to bring that
money back into the U.S. financial system.

What are your options now?

The options that the company has are one to stay as some of the pharmaceutical companies did
and just suspend all those non-essential business activity in Russia. This option is hopping a
100% that in a long-term the conflict within countries calms down, so the company could still
have all those benefits of having a subsidiary in Russia. Or in the other case to leave as many
other companies did, mostly companies that their origin countries are against Russia actions.

What is it that you could have done differently from the beginning?

What I would do different is to have a better conviction of how the relation between countries
was. Because in this particular case 3 years before now when this company stablished a
subsidiary in Russia, back then in 2019 the conflict between the U.S. and Russia reborn because
of a possible use of nuclear weapons in a disagreement.