Market Defensive or Offensive Strategy

Suppose the competitor analysis reveals that the American subsidiary of your firm's German competitor is about to broaden its product mix in the American market be introducing a new line against which your company has not previously had to compete in the home market. The environmental analysis shows that recent weakness in the dollar-Euro exchange rates is expected to continue, making American exports relatively less in Germany.

(a) Do you recommend a defensive strategy, or do you attack your competitor in its home? Discuss fully.
(b) How will you implement your recommended strategy? Provide evidence to support your position.
(c) Management learns from the economic analysis of Country A that the wage rates are expected to increase by 10 percent next year. Which functional areas of the firm will be concerned? Why is management concerned? Provide evidence to support your arguments.