International Business Risks

As there are reasons to access global markets and the benefits of global markets, there are also risks to the location of companies in some countries. Each country can have opportunities; At the same time, your revenge is associated with doing business with large corporations. Countries of the customs union may have natural minerals, but the risk of doing business in the country goes beyond the benefits. Some of the international business risks include:

(1) Strategic Risk

(2) Operational risk

(3) Political Risk

(4) Country Risk

(5) Technological risk

(6) Environmental risk

(7) Economic risk

(8) Financial risk

(9) Risk of Terrorism

Strategic Risk: A Business's ability to make a strategic decision to respond to the threats. These forces also influence the competitiveness of a company. Porter defines the threat of new entrants in the industry, the threat of substitute goods and services, intensity of competition within the industry, the bargaining power of suppliers and the bargaining power of consumers

Operational risk: this means and financial capital that supports daily business. Machine failures, supply and demand of resources and products, lack of goods and services, lack of perfect logistics and lack of stock lead to inadequate production. By controlling costs, unnecessary waste will be reduced and improvement in the process can increase lead times, reduce variance, and contribute to the effectiveness of globalization.

Political risk: Political actions and instability may make it more difficult for companies to function effectively in these countries due to the negative publicity and the impact of individuals created by the supreme government. The company can not efficiently work with full capacity to maximize profits in the political turmoil of such an unstable country. A new and hostile government can replace friendly and thus foreign assets

Country Risk: A country's culture or instability may pose a risk that can make it difficult for multinationals to operate safely, efficiently and efficiently. The risk of some countries comes from government policies, economic conditions, security factors and political circumstances. Solving one of the problems of all the problems (cumulative) together will not be enough to mitigate country risk.

Technology risk: The lack of security of electronic transactions, the cost of developing new technologies, and the fact that these new technologies are compromised, and if all this goes hand in hand with outdated existing technology, the result can have a dangerous impact on business in the international arena activity.

Environmental Risks: Air, water and pollution can affect the health of the environment. citizens and the general public attracted the citizens. These problems can also damage the reputation of companies operating in the business.

Economic risk: This is due to the inability of a country to meet its financial obligations. Changes in foreign investment and / or domestic fiscal or monetary policies. The impact of exchange rates and interest rates complicates international business

Financial risk: This area is influenced by the exchange rate and the government's flexibility to allow companies to attract profits or cash out of the country. Devaluation and inflation will also have an impact on the company's efficient capacity and stable operation. Most countries make it difficult for foreign companies to repatriate funds, thus forcing them to invest their funds at less optimum levels. Sometimes corporate assets are confiscated and contributing to financial losses.

Terrorism Risk: These are attacks that may come from lack of hope; trust; differences in culture and religious philosophy, and / or corporate hatred by citizens of host countries. This leads to potential hostile behavior, sabotaging foreign companies and / or destroying employers and employees. Such frustrating situations make it difficult to operate in these countries.

Although international business benefits outweigh the risks, companies need to carry out a risk assessment in each country, including intellectual property, bureaucracy and corruption, and property restrictions in the analysis, in order to take all risks into account before they would enter any of the country.

Source by sbobet

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