...Commercial Risk Commercial risk involves the ability of firms to strategize successfully and implement its strategy through effective tactics. The challenge is that any mistakes made abroad can be more costly due to local government regulations. Sudden changes in the trade laws and legal systems in other countries exposes international firms to regulatory risks. For instance changes in a country’s banking system may limit a firm’s access to funding or their ability to repatriate money to their home countries. A major commercial risk is usually lack of knowledge of the international market. If exporters, for example do not have in-depth knowledge on the area where its sales are being made, it is more likely to fail in international business. Commercial risk occurs as the result of inadequate formulation and implementation of strategies, tactics and procedures. These also include timing of the company into a particular market, the competitive intensity existing prevailing in the market, poor strategy execution and the weakness of the partner and also the various kinds of operational problems. It should however be considered that commercial risks are usually unpredictable and it is therefore essential for firms to lay down effective strategies in place to ensure that this risk is reduced. Currency Risk Currency or Financial risk occurs as a result of the daily fluctuations of different currencies against each other. It also includes the valuation of assets and the foreign...
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...In my perspective before any country decides to do business internationally, they must access the political risk in that country. Political stability is the biggest reason to attract foreign investment. Here are some common questions they should be asking themselves: 1. Is the government stable? 2. Is the government a democracy or a dictatorship? 3. Is power concentrated in the hands of a few? 4. What is the extent of government’s involvement in the private sector? Etc. Before foreign investment it is important to assess if a country believes in free markets or government control in industry. The country’s view on capitalism is also a factor for business consideration. I think that stable political system builds a strong economic environment. With proper legal policies in place, a country’s economy is bound to benefit. Bribery is an important issue in international business and unfortunately a living reality. Even though the FCPA was structured to help the U.S. companies understand what is and what is not considered bribery in a foreign land, it is not always clear what is considered a bribe. I guess perception also plays a big role. What is considered bribery by the U.S. may be considered as a gift by other countries. Countries with severe bribery conditions are known to be the ones where poverty and weak economic conditions exist. Today many companies have written and provided formal set of procedures to their employees to help them stay away from bribing anyone intentionally...
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...Assignment On Risk Management in International Business with Special Reference to Bangladesh Submitted to Dr. Shah Md. Ahsan Habib Crouse Instructor: International Business Submitted by Milton Kanti Das Id: 12364015 Program: MBA BRAC Business School 1::Introduction: Due to globalization, it’s hardly to find any business activities that are only associated within only in local market. Basically, today’s business means international business. On the other hand international business consists of lots of opportunities as well as lots of risks. Being success in the international business depends on handling of the risks properly. If these types of risks cannot handle properly doing business will be very difficult to sustain in international market. There are risks in international business among them some can be handled and some cannot be handled. Here in this page I will try to discuss those risks regarding international trade that can be handled by using different mechanism. There are different types of mechanisms have developed all over the world to reduce these risks. Throughout the paper I have tried to discuss these mechanisms also. 2::Objectives To discuss the theoretical aspect of risks and techniques of risk management in international business. To discuss the risk management tools of Bangladesh. 2.1:: Theoretical Aspect of Risks and Techniques of Risk Management in International Business: In international business firms have to face many risks due to political...
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...ENTRY USED BY INTERNATIONAL FIRMS TO ENTER INTO NEW MARKETS. TERMPAPER SUBMITTED IN PARTIAL FULLFILMENT OF THE REQUIREMENTS OF THE COURSE GLOBAL STRATEGIC MANAGEMENT, DEPARTMENT OF BUSINESS ADMINISTRATION, AND UNIVERSITY OF NAIROBI. DATE17TH MARCH 2012 Modes of entry used by international firms to enter into new markets. Introduction A mode of entry into an international market is the channel which an organization employs to gain entry to a new international market. International firms use several entry modes to expand their businesses globally, and to enter into new markets, there are some basic decisions that the firm must takes before foreign expansion like: first they determine which markets to enter, when to enter those markets, and on what scale. The decision on which foreign markets to enteris based on the nation’s long run profit potential.-The international firm looks in detail at economic and political factors which influence foreign markets.-Long run benefits of doing business in a country depends on following factors:- Size of market (in terms of demographics)- The present wealth of consumer markets (purchasing power)- Nature of competition. By considering such factors firm can rank countries in terms of their attractiveness andlong-run profit. The time of entry is an important factor to be considered. Entry is early when an international business enters a foreign market before other foreign firms and late when it enters after other international businesses. The...
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...this assignment is to grasp a comprehensive understanding of the critical aspects of British Petroleum’s internationalization process, the implications it holds for the international business environment and achieving their internationalization objectives through contemporary context. Overview of organisation When discussing globalization it is critical to emphasis the importance a multinational corporation holds over the international business environment. A Multinational corporation (MNC) is an organisation that has registered facilities and assets in business endeavors in more than one country. MNC’s are highlighted for their success in incorporating products, ideas and cultures from more than one country in order to achieve a common goal. With reference to the definition of a MNC, British Petroleum (BP) is undoubtedly a MNC as it undergoes its business ventures throughout the entire world and in countries such as China, Australia, Canada and Mexico. A key aspect of MNC’s is to multi nationalize every aspect of your organisation when aiming to expand internationally, BP are successful in ensuring that every branch of BP around the world has the common sustainable goals. BP has a direct correlation in Foreign Direct Investment (FDI). A FDI is when an organisation finances into production or business ventures in an external country to the one they are operating in. There are many forms of FDI, however, BP are directly investing through expanding their own operations...
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...US and the entry strategies it adopted in international markets, and discusses the various risks faced by Starbucks and the effect of these risks in its revenues in international markets. Problem Major Problem The major problem of the case was the not so well planned international operations of Starbucks compared to its US operations and the entry strategies it adopted in international markets. Minor Problem The minor problems were: The pricing of the products offered. The high level of prices of the products of Starbucks is generally caused by too expensive cost of production that causes suffering to its customers. The operation problems encountered by the business due to lack of a trained workforce. The inappropriate and unsuitable real state/location for its store. Objectives To solve the problems of this case study. To recommend advices and solutions regarding the problems encountered of this business. Facts *Alternative Course of A*ction To study and think carefully about the decision of entering international markets. To go for a supplier of cheaper items needed in the operation that would enable the business to lower the prices of its products and make it affordable and attract those middle as well as low profile consumers. To hire trained applicants to ensure the smooth flow of daily business activities. To plan and find the appropriate...
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...[pic] Ministry of Higher Education Colleges of Applied Sciences Department of International Business Administration International Business Environment (BUSN 3401) FALL SEMESTER (2012) This assessment contributes to 15 % of the final mark. Submission Date: December 12th 2012 by 2pm Note – ▪ Late submissions will be penalized by 5% per day. ▪ Assignments should be word-processed as per the instructions given. OUTLINE OF ASSIGNMENT: The assigned task is to analyse the international business environment impacts on a representative company (focal firm) in a particular industry. The report must trace the global environment impacts on the representative company. The company may be a locally owned enterprise or a subsidiary operation. It is expected that you will consult firstly newspapers, trade/industry reports, and magazines such as The Economist, Commerce, Business Week, Fortune, etc to identify international business trends, forecasts and changes. A possible outline that includes major topics for your report is: 1. Introduction 2. Political Environment (political system, structure, political parties, political risk) 3. Legal environment (legal system, legal issues in international business, legal risk) 4. Economic environment (economic system, main products and services, economic risk) 5. Monetary environment (currency system, currency risk) 6. Trade environment (major exports/imports, main trading partners, regional...
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...BU5003 International Business operation Tutor Dr Neil Moore Assessment number G35691 Number of words 2015 Date 14/11/2012 Essay topic: “The decision to develop and grow business operations can be a daunting prospect for any galvanization. In particular, the decision to expand into overseas markets generates a broad range of challenges and issues. Using contemporary examples and concepts considered in this module discuss the challenges and issues faced by business organizations as they decide whether or not to internationalize their operations.” As a company expands, it begins to get itself involved in marketing programs that may not have been part of the original business plan. Businesses evolve, and plan change and a company may begin to realize that it needs to get involved in international markets. Obviously, it has a lot of benefits when a company enters into a foreign market. Expanding sales, acquiring resources and minimizing risk are the three principal operating objectives that why companies engage in international business. Normally, these three objectives guide all decisions about whether, where and how to engage to be international business. So in order to seek high sales and profits, gain global market share and reduce dependence on existing markets, it is inevitable for any companies to go abroad. However, it also generates enormous number of challenges and issues...
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...Section A: 1) What is international business? What are the primary reasons that companies engage in international business? Answer: International business is a term used to collectively describe all commercial transactions private, governmental, sales, investments, exports and imports in and out of the country to any other country around the world. 1- To diversify sources of sales and supplies. 2- To acquire resources. 3- To minimize competitive risk. 4- To expand sales. 2) In a short essay, identify and explain three competitive factors that influence international businesses. Answer: Consumers know about and want foreign goods and services, governments are removing international business restrictions, Competition has become more global. Section B: 1) What is the difference between a monochronic and polychronic culture? How do such cultural differences affect business practices for international firms? Answer: Monochronic cultures like to do just one thing at a time. They value a certain orderliness and sense of there being an appropriate time and place for everything. They do not value interruptions. They like to concentrate on the job at hand and take time commitments very seriously. Polychronic cultures like to do multiple things at the same time. A manager's office in a polychronic culture typically has an open door, a ringing phone and a meeting all going on at the same time. 2) What is the difference between a polycentric, ethnocentric...
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...Cork Institute of Technology Bachelor of Business (Honours) in Information Systems – Award (NFQ – Level 8) Summer 2007 International Business (Time: 3 Hours) Instructions Answer: Section A: Answer all question one on case study Section B: Answer three (3) from five (5) questions. % of marks allocated for this exam: 70 Do not write, draw or underline in red. Examiners: Ms. C. O’Reilly Mr. L. Elwood Section A: Case study - John Higgins Answer all Question 1 Leonard Prescott, vice president and general manager of Weaver-Yamazaki Pharmaceutical of Japan believed that John Higgins, his executive assistant, was loosing effectiveness in representing the U.S parent company because of an extraordinary identification with the Japanese culture. The parent company, Weaver Pharmaceutical, had extensive international operations and was one of the largest U.S. drug firms. Its competitive position depended heavily on research and development (R&D). Sales activity in Japan started in the early 1930s, when Yamazaki Pharmaceutical, a major producer of drugs and chemicals in Japan, began distributing Weaver’s products. World War II disrupted sales, but Weaver resumed exporting to Japan in 1948 and subsequently captured substantial market share. To prepare for increasingly keen competition from Japanese producers, Weaver and Yamazaki established in 1954 a jointly owned and operated manufacturing subsidiary to produce part of Weaver’s product line. Through the combined effort of both parent...
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...Objectives: • Define multinational enterprise (MNE) • Identify various operations modes in internationalisation • Understand the changing global environment- Chapters 1 and 11 Implications of the increasing presence of Multinationals: easy to change the world What is Multinational Enterprise (transnational)? Any business that have productive activities in 2 or more countries Research, marketing, manufacture Broader definition: any firm that engages in international trade and investment Multinationals are rootless cosmopolitans (- more of a mindset or mentalit? Headquarters- represents the distribution of the world economy. Reasons to become international Decisions, risks that come with it Significance of multinational corporation: Not all MNE are equal: United Nations trans nationality index – measure of multinational-ness • Size/resources • Geographical scope/ diversification • Experience: process of internationalisation management attitude and structure • Degree of control over foreign operaitons • Total sales/assets and employment Single macro-environment- more countries added to equation = different kinds of environemtns that are made up of the elements Different countries varies- understanding Interface of different countries Role of MNE • Provide standard products • Facilitates the convergence of consumer tastes: eg Apple • Main actor of global production • Facilitates global trade of intermediate...
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...INTERNATIONAL HRM The emphasis throughout this book has been on HRM as it is practice in organizations in the United States. But many of these firms also engage in international trade. A large percentage carry on their international business with only limited facilities and representation in foreign countries. Others, particularly Fortune 500 corporations, have extensive facilities, and personnel in various countries of the world. Managing these resources effectively, and integrating their activities to achieve global advantage, is a challenge to the leadership of these companies. We are quickly moving toward a global economy. While estimates vary widely, approximately 70 to 85 percent of the U.S. economy today is affected by international competition. Recent popular books have suggested that many U.S. companies need to reassess their approach to doing business overseas, particularly in the area of managing human resources. To a large degree, the challenge of managing across borders boils down to the philosophies and systems we use for managing people. In this chapter we will observe that much of what is discussed throughout this text can be applied to foreign operations, provided one is sensitive to the requirements of a particular international setting. The first part of this chapter presents a brief introduction to international business firms. In many important respects, the way a company organizes its international operations influences the type of managerial...
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...inception in the 1880's. By nature we do not trust other countries other than our own but globalization is beginning to change all that. There was one way to describe country-to-country relations back then: non-existent. Well at lease when we talk of relations that is founded in trust and understanding. We forge alliances only because of the things we get from it. But globalization has formed some semblance of unity among all us and the concerns of other nation that back then were opted to be resolved on their own are now an issue with other countries as well and all unite to propel themselves to a solution. Globalization is often used for its financial connotations. The influence it has however is not contained solely to the economy. Other international aspects such as social relations, political discourse and psychological manifestations are also a part of globalization. We have constantly heard the globalization pros and cons and the debate of these globalization pros and cons continue up until now. Here is a bit of a crash course of the pros and the cons of globalization. Pros of globalization are that more accessible market for anyone all over the world regardless of color, race, and social class. “Steady supply of cash to developing countries and even the well established ones. There is an increase in the production capabilities of companies and because of this they now have more freedom to customize their services and products fitted to the needs of the consumers. Political merging...
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...firms to local markets. 1989, came the idea of the transnational firm is described as a less bureaucratic firm that has differentiated subsidiary roles and control is mostly based on organizational culture and administrative heritage. It continues to examine the global multibusiness firm (GMBF), a more appropriate model, incorporates insights of earlier model but also identifies evolving business technologies and managerial management which have changed the strategic face of global business. Strategic assembly involves constructing firms in a forward looking manner with the aim of gaining and maintaining competitive advantage. There are three stages of international firms, multinationals, transnational and global multibussiness. And finally, the article talks about, more recent concept of transnational firms which has shifted focus of global strategy away from tension between local market and scale based economies. International companies of today are embedded in a turbulent environment which is direction and pace.GMBF construct proposes which are changing the international business environment. It identifies the resources needed so as to gain competitive advantage and also the strategic purpose of the resources. A case study of Renault group and Renault Turkey identifies the nature of relationship and dynamic character of global assembly. NAME: IRUNGU MARY...
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...Words Sitting alone on a West Midlands train, I buried my face in my hands wondering what on earth I should do. “I can’t do this,” I told myself. I’d just spent the day calling international schools in Europe trying to sell them an education package for a friend’s business. I think telesales is one of the most soul sucking activities in the entire business world! “I can’t make money for other people for the rest of my life,” I said. “I won’t.” It was the summer of 2005, and it was my seventh day back on British soil after serving an 18-month mission for the LDS church in the US. I graduated with a degree in international business management before my mission, but now the prospect of pushing paper for a career, like all the other business minions, was not appealing. Like the sunny countryside whizzing by, my own train of though was working its way through hills and valleys of possibility. By the time I stepped of that train in my hometown, I had decided to go back to school and leave the country. Speech-language pathology was my ticket out of town. Five months later I had a confirmation of my choice. Without ever asking for it, I received a brochure in the mail from a college in Boston about my chosen program. As I pored over the booklet, one sentence, one word reverberated from the page: “Emerson college desires compassionate students.” Compassion. One word, seven sounds, was reason enough for me to pack up my life, sell everything that didn’t fit in my black...
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