...Country Risk Assessments You are working for McDonalds Corporation. You want to do a Country Risk Assessment for Iran for the current year to decide whether you should operate a Franchise there. Explain how you would proceed? The first thing I would want to do is analyze the product and determine the risk measures of operating in Iran, and I would accomplish this by conducting a country specific analysis. I would try to surround myself with people that have a very extensive knowledge of the target areas in Iran that I am looking to conduct the risk assessment for. I would also make sure to identify all the pros and cons and the potential problems that I may face trying to sell these product in this country. I would visit the country myself to get a more hands on feel for the country and also determine some of these potential problems that I may face. I would look at creating a broadly diversified global portfolio to determine where the investments should be allocated among developed, emerging and perhaps frontier markets. I would want to make sure that the investments are spread among several other areas in Iran to maximize diversification and minimize risk. What data would you need; how would you use them? I would conduct a correlation coefficient and use this data to help limit my risk. I would conduct a forecast to determine the credit risk posed by Iran, including a regularly reviewed country risk rating. I would look at the currency, sovereign debt and banking sector...
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...Country Risk Analysis: John D. Young MGT 448 January 16, 2010 Stephen Thomas Country Risk Analysis When entering any market, analyzing the business risks is an important process. Many sources of risk exist and responsible organization will examine every possible source in preparation for managing a variety of issues. These risk types include political, legal, and regulatory risk, exchange and repatriation of funds risk, competitive risk, taxation and double taxation risk, market risk, distribution and supply chain risk, physical and environmental risk, social and cultural risk, and cyber-risk or technological risk. Political, Legal, and Regulatory Risks Politically, China faces some stability issues. China has a Communist government. In many cases, this regime has led to stability that has helped the country reach the more recent levels of economic improvement, despite some notable discontent among its people (Cai & Li, 2009). However, since reaching a more prosperous economy China has been at odds with itself. Balancing its communistic central government with capitalistic economic centers has been unsuccessful. Additionally, the development of the nation has led to a large disparity between the classes with some rural regions looking as they did decades ago whereas urban centers rival New York and Tokyo in excess (AMBest Co Inc., 2011). This generates a lack of trust in smaller regional centers and towns that threatens to create instability in China (Ke...
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...Country Risk and Strategic Planning Analysis Paper University of Phoenix MGT/448 Kathryn Hayman December 19, 2011 Team C has decided to conduct a country risk analysis for the country of Mexico. The selected business venture is about laptop computers. When it comes to global business ventures there also comes a great amount of risks. In the following paragraphs is an analysis of the following risks; political, legal, and regulatory risks, exchange and repatriation of funds risks, competitive risk assessment, taxation and double taxation risks, market risks, distribution and supply chain risks, physical and environmental challenges to entering and operating in a target market, social and cultural risks, and cyber or technology risks. A description of how these risks would be managed and a summary of the strategic planning process will be explained. Mexico has a moderate political risk according to AM Bests Country risk report. Mexico ties with large, developed countries that are very strong has help them in this aspect when it comes to their political risk. NAFTA North American Fair Trade Agreement also helps in this respect since it is now one of the largest free trade areas. This agreement was established between the Unites States, Canada, and Mexico and became effective on January 1, 1994. This alliance has brought economic growth and rising standards to the citizens of these three countries. There are many advantages of NAFTA, being that it has created...
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...Country Risk Analysis Germany By: Matthew Duby 103805300 Brett Benson 103682527 Due: Monday, March 30th Addressed to: Dr. Gunay Table of Contents Introduction……………………………………………………………………………………3-4 Supporting Information How does Germany’s bond yields compare with other countries?………………….................4-5 What is the rating of Germany’s government bonds?…………………………………………5 What are Germany’s interest rates (short, intermediate, long-term)…………………………..6 Who are Germany’s top 3 trading partners? Are they the same for imports and exports?........6-7 What is Germany’s current account balance? Has it been a surplus in the past few years?......7 Why might Germany be running a surplus?...............................................................................7 Are their top three trading partners running a current account surplus or deficit?....................8 What is Germany’s population, GDP, unemployment, money supply growth and inflation rates?......8 Do you think interest rates in Germany are going to increase or decrease? Why?....................9 Do the trends have a positive or negative outlook?...................................................................9 Do you expect Germany’s exchange rate to appreciate or depreciate against the USD?..........10 Conclusion With the acquired information, would you invest in Germany’s T-bills?..................................10 Was your hypothesis confirmed? What did you learn?...........................
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...forward with plans to expand internationally to the country of Moldova, located in Eastern Europe, will conduct a country risk assessment. Any organization contemplating a business venture into a foreign country could encounter multiple risks. Therefore, prior to embarking on an international expansion, extensive, in-depth research of the target country is a necessity for success in the foreign marketplace. Team A will conduct a risk analysis of Moldova and its winery production and analyze all aspects of risk involved from entry to an exit plan. This paper will also describe the market risks and include a SWOTT analysis of the country. Political, Legal, and Regulatory Risks BDSD will encounter several risks when entering Moldova on a business level. A political risk is the current inability of the country’s parliament to elect a president. The country, divided over the election of leaders, disenchanted with the current leadership, and facing ongoing power struggles with neighboring countries has caused political deadlock. In addition, Moldova faces internal uprisings and tense relations with other nations in the region. If the country does not elect a president this year then the Moldovan Constitution calls for the dissolution of parliament. Dissolving parliament could have the potential to cause an uprising of the population creating an uncertain political forecast for the country (BBC News 2011). The legal risks of entering Moldova include financial, security, and...
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...Running head: COUNTRY RISK AND STRATEGIC PLANNING ANALYSIS PAPER Country Risk and Strategic Planning Analysis Pa University of Phoenix Global Business Strategies MGT/445 January 11. 2009 Country Risk and Strategic Planning Analysis Paper The following paper analyzes the risks associated with starting a global business venture in the Philippines. The business is the manufacture and sale of FOY, an anti-aging supplement that will revolutionize the health and beauty industry. A strategic planning outline will be included to manage risks, clarify the organization’s objectives, and implement the successful introduction of this product to the global market. The Philippines have laws that require all foreign organizations to open an office in a domestic subsidiary, in a foreign representative office, or in a foreign branch office. A business license from the Philippines, registration of the business, who is part of different government agencies, and certification of incorporation, are also requirements for starting a business in the Philippines (Culangen, 2009). Projects and businesses in the Philippines are at risk of closure due to the high percentage of corruption, this, in turn, forces political parties to reduce the improvement and growth of infrastructures. The political issue of corruption has prevented the Philippines from gaining investors from other countries (Political and Risk Consultancy LTD., 2008). The low rate analysis of the islands...
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...Exercise country analysis and country risk Venezuela Hypump, a US company producing hydraulic pumps used in oil producing industry, likes to investigate the possibility of starting a new subsidiary in Venezuela, and asked you to make a country analysis and country risk report. The facts, key indicators and back ground information of Venezuela you found after research are presented in the Appendix. Use that information to answer the following questions: Moderate poverty and inequality have decreased from 1998 onwards due to the program called ‘Missiones’ according to the World bank (see appendix). 1. Use the fact sheet Venezuela whether this can be confirmed with figures. Assess: a. Level of development b. Income inequality 2. Assess Venezuela’s export structure. What is it based on? Use GDP and expenditure components for Q 3 and Q4 to assess Venezuela’s attractiveness from the table: 3. How can you see 2014 and 2015 are forecasts? 4. Characterize the phase of business cycle Venezuela has faced in 2013 and 2014 (Explain which key indicator(s) are used to answer the question) 5. Make a ‘first level analysis’ of the aggregate components of GDP to explain the economic (GDP) growth during 2013. 6. Explain the influence of imports on GDP in 2013. 7. Make a ‘second level’ analysis of the aggregate components of GDP to find some reason(s) for the movement of the various components. ‘The decrease...
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...Running head: COUNTRY RISK AND STRATEGIC PLANNING Country Risk and Strategic Planning University of Phoenix Global Business Strategies MGT 448 Jun 18, 2007 Country Risk and Strategic Planning Taking a new business concept overseas and installing facilities in a foreign country involves a great deal of preparation and forethought. Introducing a fitness/entertainment hub such as City Beach to the Japanese people, despite positive preliminary evidence, could end up being a catastrophic failure. With any overseas business venture, there are inherent risks that one must take into account. Doing business in Japan begins by appointing a representative in Japan. This representative may be a person chosen from the headquarter office or a Japanese national. According to (Jetro 2007) The representative must have the decision-making powers to make sure that the initial venture happens without any setbacks. The major regulations of doing business in Japan include laws and regulations that apply to any business startup. Foreign companies can begin by establishing their business presence as representative office, branch office, subsidiary company, or limited liability partnership. Since the setup procedure for establishing a business can be very complicated, it is advisable to procure outside help from a professional service firm in Japan. Human resource management pertaining to Japan’s laws on labor and protection of workers include the Labor...
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...Turkey Investment Risk Analysis Introduction Today Turkey is preserved as one of the countries that offer a solid ground for foreign investment. According to the Republic of Turkey Prime Ministry Investment Support and Promotion Agency [PMISPA] (2015), the inflow of Foreign Direct Investment [FDI] has reached 12.5 BUSD in 2014 and the amount of countries with foreign capital is constantly growing. While the biggest Turkey’s assets are mainly related to soil and population, a set of political reforms targeted to support the investment, the close possibility to join the EU contribute largely to growing interest of foreign investors. On the other hand, doing business in Turkey requires deeper understanding of local culture, people and their approach to business and life values in general. When making a business decision on whether to invest to Turkey, mainly economic, political and cultural factors shall be taken into consideration. Strategic location Turkey with an area of 784 mil km2 (Central Intelligence Agency [CIA], 2013) can boast about its geographical location of high strategic importance. The country is located on the crossroads of 3 continents and has borders with 8 countries, which opens unique business opportunities in Europe, Asia, the Middle East, the North Africa, Russia and CIC. In addition to that, the attractive Turkish coastlines have made Turkey the 6th most popular touristic destination in the world (PMISPA, 2015), which is one of the advantages when...
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...Country Risk Analysis: Philippines As trade barriers continue to fall and technological advances accelerate, the offshoring trend will continue as companies strive for operational efficiencies by outsourcing production and labor and taking advantage of capital markets. International business is not a new phenomenom, however the volume of international trade has increased dramatically over the last decade. Today, every nation and an increasing number of companies are investing abroad. Private and public investors must determine which countries offer the best prospects for sound investments. The decision to invest overseas begins with a determination of the riskiness of the investment climate in the country under consideration. In this paper we will evaluate the country risk analysis of investing in Philippines. The Philippines is the third-largest English speaking country in the world, enabling its manpower to have a unique edge over neighboring countries in terms of labor quality. Flanked by the Pacific Ocean and the South China Sea, its strategic location makes it a critical entry point to some 500 million people in the Association of Southeast Asian Nations (ASEAN) market, offering vast trade opportunities, and an ideal base for business. It is also the best Asian country in terms of overall quality of expatriate life, considering its cultural compatibility with expatriates, housing, sporting and recreational facilities, quality healthcare, and first-rate educational institutions...
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...Country Risk and Strategic Planning Analysis TSI international consulting is a firm that provides services that support the United States and foreign businesses in globalization operations. TSI consulting international will be entering a 50/50 partnership with Setex consulting international, a Romanian integral investment company that provides tailored expert business services for global and national businesses who wish to extend business to the Romanian market and other foreign countries. TSI international partnerships with Romania will help develop the country's weak rural agricultural infrastructure. By providing 50% of the capital the government will have a vested interest in firm’s success. Our company will provide modern agricultural training techniques and machinery to the rural area citizens of Romania. The bigger strategy will be to drive revenue through export to the Eastern European region and eventually the members of the European Union. As a country that was previously a communist nation the minds of rural citizens will easily buy into the strategy where they see clear authority and a mode to enhance their standard of living. Launching a global joint venture can present a generous amount of risks that require analysis. The potential risks of TSI consulting opening and maintaining a partnership business venture in Romania with global ambitions will be vast and complex. To begin, TSI international will analyze numerous categories of risks ranging from legal to financial...
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...Country Risk and Entry Mode Selection Political, legal and regulatory risks Political, legal and regulatory risks, for example, exchange and repatriation of funds risks of our host country, Japan includes the following: Marketers must attempt to comply with the host country’s laws and regulations and keep up with laws and regulations that change frequently. Some examples of Political risks include: War, Social unrest, politically motivated violence, Social conditions, corruption, labor costs and tax discrimination. The political impact on economic transformation includes deregulation, privatization, and the creation of a legal system to protect property rights. The legal risks include the rules and laws that regulate the host country’s behavior; property rights, private and public actions. International property issues include protection of property by law enforcement and product safety and liability. This also includes competitiveness and ethics. Social and cultural risks There are so many risks when conducting business in an Asian country that you must consider before you decide to conduct business overseas. One of the first things you must figure out is will our product need to be adapted for Asian markets. Some Adjustment is ok, but we would need to figure out if wearing rings is a big thing in the culture. We also should look at which colors and metals are best to use and which are most popular. Another issue that needs to be looked at is how accessible would...
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...GDP, levels of consumer wealth and people’s propensity to consume, CPA (Country Portfolio Analysis) places all the emphasis on potential sales. It ignores the costs and risks of doing business in a new market. o Most of those costs and risks result from barriers created by distance • Distance: Not just geographic separation, but also has cultural, administrative and political and economic dimensions that can make foreign markets considerably more or less attractive. • Example: The amount of trade that takes place between countries 5000 miles apart is only 20% of the amount that would be predicted to take place if the same countries were 1000 miles apart. Cultural and Administrative distance produces even larger effects. A company is likely to trade ten times as much with a country that is a former colony, for instance, than with a country to which it has no such ties o Geographic distance, for instance, affects the costs of transportation and communications, so it is of particular importance to companies that deal with heavy or bulky products, or whose operations require a high degree of coordination among highly dispersed people or activities • Cultural Distance: A country’s cultural attributes determine how people interact with one another and with companies and institutions. Differences in religious beliefs, race, social norms and language are all capable of creating distance between two countries. o Some cultural attributes, like language, are easily perceived and...
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...Shell Now that I have gotten over my initial resignations about Kava, I can begin to get to business. I have to figure out how to make Bank of Americas presence here both profitable and essential for us and for the people who live here. The goal of Bank of Americas investment in Kava is both high risk and at the same time has the possibility of being highly profitable. The object here is to open banking centers and starts helping the people that live here go into business for themselves and to help bring other businesses to the area. We want to help Kava grow to its full potential. The Bank and its shareholders see all that Kava has to offer as a country. For example they are rich in exportable goods such as petroleum, coffee, cocoa, spices, bananas, and sugar. Also with the lands beautiful and scenic landscape there is a large opportunity for tourism. Especially within the fishing community as the fishing is Kava is said to be plentiful. Kava also has an abundance of natural gas which is an invaluable resource to some countries and they will pay well for it. One of the most promising qualities of Kava however is the inexpensive yet high quality labor that the country has to offer. Fifty percent of the population is over 15 years old and speaks English as well as some of the other languages that are indigenous to Kava. Their skill set and their eagerness to learn and bring a better quality of life to Kava is a desired skill set to any company. It will mean hard workers...
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...Latin America is quite a preferable location for auto manufacturers. Countries like Brazil, Argentina and Mexico are well known for manufacturing automobiles. As a Chinese automobile company who wants to set up their operation in Latin America, several major factors must be considered while selecting the country. Some of the factors which are considered when deciding on which country to invest are as follows: A. Infrastructure: Latin America lags behind in terms of infrastructure. This is a disadvantage for Latin America since it has a negative implication on its production and foreign direct investment. The proportion of paved roads in Latin America is comparatively low. i) Brazil: Brazil, the biggest economy in Latin America is ranked 104 in 2014 according to the “Global Competitiveness Report” by the World Economic Forum. This significantly increases the set up costs for new firms. ii) Argentina: Argentina lags even further behind Brazil in terms of infrastructure according to “Global Competitiveness Report” by the World Economic Forum published in 2014. This makes Argentina unsuitable for setting up new subsidiary. iii) Mexico: Mexico is ranked 73rd in the “Global Competitiveness Report” published in 2014, by the World Economic Forum. This shows Mexico is better in terms of infrastructure than Brazil and Argentina. Hence, Mexico will be the better choice compared to the other two countries. B. Barriers to Entry: Foreign Direct Investment has increased...
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