· Input Mix

Outright additions to facilities overseas accomplish a manufacturing shift. A more flexible solution is to purchase more components the flexibility to shift purchases of outsourcing. Outsourcing gives the company the flexibility to shift purchases of intermediate inputs towards suppliers least affected by exchange rate changes.

· Plant Location

A firm without foreign facilities that is exporting to a competitive market whose currency has devalued may find that sourcing components abroad is insufficient to maintain unit profitability. Third country plant locations are a viable alternative in many cases.

Many Japanese firms, for example, have shifted production offshore to Taiwan, South Korea, Singapore & other developing nations as well as United States in order too cope with the high Yen.

· Raising Productivity

Raising productivity through closing inefficient plants, automating heavily & negotiating wage & benefit cutbacks & work rule concessions is another alternative to mange economic exposure. Employee motivation can also be used to heighten productivity & improve product quality.