Response and thoughts on this opinion and info on Analyzing a country risk assessment, supporting info on
Question:
Response and thoughts on this opinion and info on Analyzing a country risk assessment, supporting info on the info/your opinion on this subject and what this means?
Analyze Country Risk Assessment. I think this is a very important topic to talk about. As international businessmen and businesswomen, we got to understand the risk of investing in a foreign country. Whether investing in a company in that foreign land or perhaps opening a shop of your own in that foreign land, you can incur a lot of risk. That is why I always felt doing a PEST (Political, Economical, Social, and Technology) is very important before you take part in any foreign affairs. The first two letters, in my opinion, are the most important of the PEST analysis.
For the political factors, you got to understand that country's current political climate. Countries like the United States, Canada, Switzerland, etc. should all be considered low risk. The political turmoil is very low and it is generally safe to do business in these countries. For countries like Venezuela, Russia, Somalia, etc. are all considered high risk in the political realm. In these types of countries, there is political uprising and/or human rights violations. Some of the consequences for doing business in these countries are clear and some are not as clear. With a lot of the political turmoil, a business can find itself doing business with the wrong types of customers or getting taken advantage of. One thing that businesses have to look for when dealing with these types of countries is the public relations kickback for dealing with some of these countries. There could be a severe outcry for doing business with countries that have a shady background. I remember when the war between Russia and Ukraine first started, McDonald's came under fire. While a lot of businesses pulled out of Russia when the war first started, McDonald's stayed there. There was so much public outcry that McDonald's eventually relented and pulled out of Russia as well.
When it comes to the economic factors of dealing with shady countries, the risks can be great. If there is a lot of political unrest within a country, economic factors could be at play. Countries like Somalia, Syria, Sudan, etc. all have economical issues. So when you decide to invest into a company within one of those countries, it is a high risk, high reward scenario. If the economy becomes too unstable, it could mean you will lose millions.
Applied Regression Analysis and Other Multivariable Methods
ISBN: 978-1285051086
5th edition
Authors: David G. Kleinbaum, Lawrence L. Kupper, Azhar Nizam, Eli S. Rosenberg