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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?
Here is what the list looks like. Your assignment is to fill in the table.
Risk | Importer | Exporter | L/M/S | How to Overcome It |
Economic conditions | ||||
Fluctuations in industry | ||||
Competition | ||||
Technological change | ||||
Change in preferences | ||||
Costs and expenses | ||||
Regulations | ||||
Expropriation | ||||
Interest rates | ||||
Government monetary policy | ||||
Government fiscal policy | ||||
Internal and external wars | ||||
Difference in culture and religion | ||||
Ownership of factories and property | ||||
Human resource restrictions | ||||
Intellectual property | ||||
Discrimination | ||||
Red tape and corruption | ||||
Blockage of funds or capital accounts | ||||
Change in government |
Comment on whether the U.S. government would support a business owner’s decision to expand internationally or import in light of the balance of payments and how the move internationally may affect the business’s reputation as a local small-business owner.