As a business owner making a final decision regarding the international aspects of a business decision, you may decide to set up a table with the risks and weigh their relative importance against the rate of return you foresee. You also need to put a plan in place to overcome it.
Assume that your business is visible and an important member of the community. Would the government encourage a decision to expand? How would it affect the reputation of the business?
Your assignment is to fill in the table. The following are instructions for completing the table:
- Choose an industry with which you are familiar or have an interest.
- For each risk type listed in the table, indicate with an x in the appropriate column if you are taking the perspective of an importer or exporter.
- Also make an assumption of what type of business (large, medium, or small) you will be using for each risk type by marking L, M, or S in the column.
- These factors will be used to contribute to your answer on how to overcome the risk for the industry and the business.
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Risk
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Importer
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Exporter
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L/M/S
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How to Overcome It
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Economic conditions
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Fluctuations in industry
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Competition
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Technological change
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Change in preferences
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Costs and expenses
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Regulations
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Expropriation
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Interest rates
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Government monetary policy
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Government fiscal policy
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Internal and external wars
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Difference in culture and religion
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Ownership of factories and property
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Human resource restrictions
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Intellectual property
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Discrimination
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Red tape and corruption
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Blockage of funds or capital accounts
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Change in government
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