Just as there are reasons for entering global markets and benefit from global markets, there are also risks involved in the search for companies in certain countries. Each country can realize their full potential, but also has its difficulties associated with transactions with large companies. Some of the rogue states, all natural minerals, but the risks in the countries involved in more profits. Some of the risks in international business are:
(1) Strategic Risk
(2) Operational Risk
(3) Political Risk
(4) Country Risk
(5) The technical risks
(6) Environmental Risk
(7) Economic Risk
(8) Financial Risk
(9) terrorism risk
Strategic risk: the ability of a company to make a strategic decision to respond to the forces that are a source of danger. These forces also affect the competitiveness of a company. Porter defined as: threat of new entrants into the sector, the threat of substitute products, goods and services, the intensity of competition within the industry, the bargaining power of suppliers and bargaining power of consumers.
Operational Risk: This is caused by the assets and financial capital to help in day to day business. The breakdown of machinery, supply and demand of resources and products, lack of goods and services, lack of perfect logistics and inventory lead to inefficiency in production. By controlling costs, reducing unnecessary expenses, and improving processes can improve the delivery time, variance and contribute to the efficiency of globalization.
Political Risk: Actions and political instability may make it difficult for businesses to operate efficiently in these countries due to negative publicity and impact of individuals in the top of the government created. A company can not work effectively at full capacity to maximize the benefits of political turmoil in a country as unstable. A new enemy and the government may expropriate the assets in a friendly and abroad.
Country risk: culture or instability in one country might risk make it difficult for multinational companies, no doubt, you can create an effective and efficient. Some come with the country risk of government policy, economic conditions, political conditions and safety factors. Solution of these problems, without any problems (in total) and not enough on risk mitigation in the country.
Technical Risks: Lack of security in electronic transactions, the cost of developing new technologies and the fact that this new technology can fail, and if all this with the existing obsolete technology together, the result can be a dangerous effect of creating in stores internationally.
Environmental Risk: air, water and pollution can affect the health of citizens and lead to public outcry of citizens. These problems can cause damage to the reputation of companies doing business in this area.
Economic risk: This comes from the inability of a country to meet its financial obligations. The change in foreign investment and / or national tax or monetary policy. The effect of exchange rate and interest rates make it difficult to conduct business internationally.
Financial Risk: This area is the exchange rate, the government more flexibility, as companies repatriate profits or funds imposed outside the country. The devaluation and inflation will impact the company’s ability to operate an efficient and remain stable. Most countries make it difficult for foreign companies, mutual funds forcing these companies to repatriate their funds in a less optimal level of investment. Sometimes the company took over the assets and contributes to economic losses.
Terrorism Risk: These attacks can come from the lack of hope, confidence, differences in culture and religion, philosophy, and / or hatred of the companies only for the citizens of host countries. This leads to potential hostile, sabotage by foreign companies and / or sequestration of the employer and employee. Such frustrating situations it difficult to operate in these countries.
Despite the benefits outweigh the risks of international business, companies must have a risk assessment of each country and also intellectual property rights of bureaucracy and corruption, human resource constraints and restrictions on the acquisition of goods in the analysis, dare to keep all the risks before any country.