This website uses cookies to ensure you have the best experience. Learn more

Country Risk Analysis

2181 words - 9 pages

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, ...view middle of the document...

Information from formal relationships may also be helpful in reducing any risk.
Exchange and Repatriation of Funds Risk
Historically, Chinese currency was pegged to the value of the U.S. dollar. After receiving praise during the 1998 Asian Financial crisis, this policy came under criticism in 2003 following the decline in the value of the dollar, dropping the value of the Chinese Renminbi. This allows China to bring goods to market at increasingly competitive prices despite a growing economy. China changed this policy and began pegging the Renminbi to multiple foreign currencies, which stabilizes the price and availability for exchange (Poleg, 2005).
Despite the global economic downturn in 2008, China weathered the storm well. Despite a sharp decline in Foreign Domestic Investment (FDI), China released a stimulus package that afforded them GDP growth in 2008 and 2009 of 9.6% and 9.2% respectively, rising above their pre-crisis GDP in 2010 (Morrison, 2011). This led to unprecedented tax exemptions on repatriation taxes for certain American companies in an effort to encourage FDI (Marshall, 2007). However, the potential exists that with an up-turn in the economy and FDI that China will again re-impose a high repatriation tax for profits made in their country.
Exchange and Repatriation of Funds Risk Management
“The predominant way to manage foreign exchange risk is to offset foreign currency holdings or expected revenue with futures or forwards (ehow).” Demanding a level of stability by creating a foreign bank account for the organization, by creating this account the company can mitigate the effects of currency values. The fluctuation on revenues of foreign currency can also provide better returns, depending on the experience of the company’s accounting department dealing with investments as well as any tax shelters.
Competitive Risk
China has already embraced the concept of the electric car. China has invested in expanding infrastructure to support electric cars by expanding their power grid, especially in the southern region, and by installing electric car charging stations throughout most of their urban centers (Bradsher, 2012). However, they have fallen short as a nation in their commitment to going electric. Many agree that the problem most consumers have with the electric car is universal. Most electric cars do not have an appealing design.
Competitive Risk Management
A method of pushing the envelope against any company competing with the LUXX brand must start with mandates from the United States government as well as foreign policies and government officials. Creating an electric automobile market using government stimulus earmarks, encouraging the public by using the same products (federal electric vehicle fleets). Review the most popular car designs within the last 40 years and provide the body design and an interior that provides a functional and luxury balance. Teaming with energy companies to...

Other Papers Like Country Risk Analysis

Management Essay

302 words - 2 pages management: The identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. c) Risk appetite: The amount a business is willing to place at risk in the pursuit of its objectives d) Risk capacity: The amount a business is capable of loosing before it endangers its own sustainability 2. Comment on the following saying in relation to the risk management policies and practices of an organisation

Process Safety Essay

1712 words - 7 pages ). The results from these are used to analysis the acceptability of a particular chemical plant activity. * After frequency analysis is the consequences analysis. This look at the effect of any accident to workers, equipment, environment and the public. The risks of an accident can be expressed in two forms namely individual risk and societal risks. * The risks identified are now analysed for acceptability and tolerability. * If it is

Risk Management: Role in Justice and Security Organizations

720 words - 3 pages Risk Management: Role in Justice and Security Organizations Introduction Risk, as it applies to justice and security organizations means “the uncertainty of financial loss, the variations between actual and expected results, or the probability that a loss has occurred or will occur” (Broder, 2006, p. 3). Businesses and organizations all across the country have risk management programs in place to help minimize losses. Risk most often is

Oresund Bridge Project 1

1054 words - 5 pages allows for identifying Strengths, Weaknesses, Opportunities, and Threats. Once SWOT analysis is completed, I would move forward to defining control of the project to indicate the following variances such as cost, schedule, scope and quality. Furthermore, bring in Subject Matter Experts (SME) to provide their input for mitigation strategy. Lastly, other risks to be raised for each alternative is to develop a risk management plan, project planning

Risk Management In Banking

9309 words - 38 pages Source: All the below analysis and interpretation is done from the survey conducted in Banks. 1. What is your assessment of your readiness for the new Basel proposals with respect to capital requirements? Table 4.1.1: Readiness for the new Basel proposal |  |CREDT RISK |MARKET RISK |OPERATIONAL RISK | |FULLY PREPARED

Equity Markets

885 words - 4 pages absolute deviation (MAD) -Which risk measures would you consider in the analysis of your own portfolio given your preferences? When evaluating a portfolio of my own I would most likely use all of the measurements mentioned above as I am very conservative when it comes to investing my money. By using more then one risk measurement I am able to better understand the relationship between risk and reward of the portfolio. For example as a risk

Effectiveness of Credit Risk Management on the Financial Performance of Philippine Universal Banks

1604 words - 7 pages . Credit risk management is a structured approach to managing uncertainties through risk assessment, developing strategies to manage it, and mitigation of risk using managerial resources (Achou & Tenguh, 2008). Its quality is the main indicator of the bank’s financial soundness. Boahene et all (2012) stressed that default of loans and advances shows serious setbacks not only for borrowers and lenders but also to the entire economy of a country

Corporate Governance

1714 words - 7 pages investor protection and corporate risk taking and the between of risk taking and growth. By the way from this interpretation could be due to two reasons where for the first one using a small sample and the proxy for the risk taking in the country level analysis is based upon a subset of the economy. Implication From the review, we can conclude that the investor protection is really important to support the country in order to sustain the firm

Indian Insurance Industry: Governance, Risk and Compliance 2015

610 words - 3 pages 7th Nov 2015, – Navi Mumbai, India: Market reports on India presents the latest report on “Indian Insurance Industry: Governance, Risk and Compliance 2015”. The report brings together research, modeling and analysis expertise, giving insurers access to information on prevailing insurance regulations, and recent and upcoming changes in the regulatory framework, taxation and legal system in the country. Synopsis 'Governance, Risk and

Finn630 Unit 5 Ip

744 words - 3 pages benefits for the foreign country as often time when a company makes this type of investment they will be looking grow that investment so often times this will still create jobs and grow the economy ( How would you incorporate political risk into the capital budgeting process of foreign investment projects? Incorporating political risk into a project is a two phase process. First the risk level of the foreign market must be assessed

International Management 7e (Deresky) - Ch.1 : Discussion and Analytical Questions

1607 words - 7 pages business in a country or region is called a macro political risk event. In many regions, terrorism poses a severe and random political risk to company personnel and assets and can obviously interrupt the conduct of business. The increasing incidence of terrorism around the world concerns MNCs. In particular, the kidnapping of business executives has become quite common. In addition, the random acts of violence around the world have a downward

Related Essays

Country Risk Analysis Turkey

2356 words - 10 pages 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

Country Risk Analysis China

3026 words - 13 pages the world economy. Team B will perform a country risk analysis to ensure that endeavors of investing into the Chinese markets are warranted.Initial ScreeningGreater China has been one of the most dynamic areas in the world economy. With the entry of the China into the World Trade Organization, China's financial markets emerge on the frontier of economic reform and openness. Financial services also provide the most exciting foreign business

Country Risk Assesment Essay

1695 words - 7 pages Risk Assessment Client: Region: Iran Consultants: C Date: 04/08/2009 Introduction We have been asked by to provide a brief security risk assessment on the country of Iran with specific emphasis on factors that may affect proposed future operations in the region concentrating on political, operational, terrorism, security and travel risks. Risk Analysis Political • Electoral Demonstrations Large scale demonstrations took place

Marriott Case Study

759 words - 4 pages INDUSTRY RELATED WORD LIST Investment Banking Consultant private equity Leadership venture capital Re-engineering techniques Corporate finance systems professional project finance strategic planning valuation case research methods financial analysis SAP forecasting BAAN competition analysis Peoplesoft country and risk analysis CFA MIS data modeling Commercial Banking relational databases lending