The major world economies are beginning to plan for a time when the coronavirus will not impinge on normal business activity. That time may be some months away. You are employed by a major international luxury goods company. Its headquarters are in Italy. The company sells its products mainly in the eurozone, but it also has a good presence in the United States. You have been asked by company management to assess various international finance factors that are expected to affect the company in the next year. Issues that were discussed in the last management meeting include, 1. Built up demand for products – some people have been unable to make purchases because they were not working or living on unemployment insurance. Even wealthy people who buy luxury goods may hold off on purchases under the current circumstances. It would be good to get real insight on this matter. 2. The likelihood that taxes will rise, perhaps significantly, tamping down consumer demand. People who want to buy expensive items may hold off so that they can get straight with the government. 3. Your company makes luxury goods. It has always seen itself as operating in a “special” market. What are the real prospects for luxury goods as the pandemic winds down? Some rules of the road: 1. See what the Wall Street Journal says on these issues. Opinions get old fast and may not have been accurate to begin with. 2. Absolutely do not fill the paper with useless definitions, with descriptions of what happened years ago or with opinions from blog writers. 3. Pay special attention to factors and trends that company management may not have been pursuing over the last year or two. Maybe art works are becoming more attractive. Real estate may be on an upswing. Savings might be increasing. Look for financial trends that may help in this assignment. 4. Avoid vague generalizations and opinions. Do not tell the company to go online. Everyone is online. Besides, luxury goods are rarely bought online. People like to see and touch expensive items. They also tend to pay in cash so that there is “no record” of the purchase. 5. Do not waste time giving vague, useless advice. For example, “We should do more research and development (R&D).” Or, “We should look for opportunities.” You must give specifics on opportunities and R&D areas. 6. Look for opportunities. This could involve specific new products, new services, new revenue streams, or the real likelihood that people will buy luxury goods in the near future. Who has money? What are they using the money for? 7. Management expects you to turn in a paper with good support that is clear and specific. Failure to do so may be “career limiting.” Telling management at a multi-billion dollar luxury car manufacturer or diamond exchange, for example, to sell online would irritate management.
