Question

1. Apply your understanding of the concepts learned on risks associated with international markets (political, economic, and cultural risks)

2. Answer the below question using any examples from the internet search. (please do not use the examples which we talked about in the book or in lecture slides)
3. This is an individual submission. Limit your response to 1 page in your write-up. - Submit the document on the canvas before 10pm on Sunday, Mar 26th, 2023.

Choose a firm and an industry you would like to operate in. Which country/countries you would like to foray into given the nature of the business of the chosen firm? Evaluate and elaborate on the political risks, economic risks, and cultural risks?

Answer 1

When a firm considers international expansion, it must assess political, economic, and cultural risks. A technology company entering Brazil might deal with strict digital service regulations, volatile economic conditions, and distinct consumer behaviors that necessitate app localization and specialized marketing.

Step-by-step explanation:

Evaluating the political risks, economic risks, and cultural risks associated with entering international markets is critical for any firm considering global expansion. For instance, a technology firm aiming to enter the Brazilian market must be aware of the country's regulatory environment that might pose political risks such as changes in government policies impacting digital services. Additionally, economic risks could arise from fluctuations in currency exchange rates or varying levels of economic growth which may affect consumer spending. Furthermore, cultural risks include understanding local consumer behavior, language barriers, and preferences that may necessitate adaptation of the firm's products or services. An example of a company navigating these risks could be a mobile app developer adapting its software for the Brazilian market, taking into account Portuguese localization and the need for cross-cultural marketing strategies tailored to Brazilian consumers.