Nov 26, 2020 in Business

None

Risk

Importer

Exporter

L/M/S

How to Overcome It

Economic conditions

X

L

Develop flexible price policies

Fluctuations in industry

X

M

Study the external environment in depth

Competition

X

Analysis of the external environment and the competitors; focusing on the advantages of the business and improving it

Technological change

X

L

Invest into the technological development of the business

Change in preferences

X

S

Monitor the preferences and reaction for the demand

Costs and expenses

X

Create the relevant budget and control its realization

Regulations

X

M

Fully comply with the requirements of the legislation

Expropriation

X

L

Fully comply with the requirements of the legislation; hire a lawyer

Interest rates

X

M

Flexible financial policy

Government monetary policy

X

S

Use the services of central banks

Government fiscal policy

X

S

Use the services of central banks

Internal and external wars

X

M

Develop alternative transportation routes

Difference in culture and religion

X

L

Study the features of other cultures and religions, taking it into consideration in daily work

Ownership of factories and property

X

M

Control internal documentation

Human resource restrictions

X

L

Investment in the development of human capital

Intellectual property

X

M

Fully comply with the requirements of the legislation

Discrimination

X

Take into consideration the religious or national differences

Red tape and corruption

X

M

Establish clear communication policy

Blockage of funds or capital accounts

X

L

Using several accounts in different banks

Change in government

X

L

Fully comply with the requirements of the legislation

Taking into consideration the importance of business development, as an owner of a big local business, I have decided to enter the international market. I am the owner of the company that produces variety of confectionary products, such as candies, cookies, and different kinds of chocolate. I have been operating inside the country on the national level. My business has to be expanded to defeat the competitors and increase the income. However, entering the international market is connected with the variety of risks for the business and the industry. This important step in business development requires serious preparation, such as learning internal and external environments.

Economic conditions and fluctuations in the industry can have a negative impact on the activity and business expansion. Economic conditions, such as inflations, unemployment, fluctuations of the currency exchange rate can lead to the price increase. I will be forced to buy ingredients for producing higher prices or to increase the salaries. All these factors can lead to the negative economic consequences for my business.

Competition between similar businesses in the industry is another risk. Food industry is an important sector of the economy, and, of course, such a business has competitors. These competitors can enter the international market faster than my company. To overcome it, I, as an owner of the business, should monitor the external environment, foresee the competitors next steps towards international markets and react to these factors on time.

Technological change is another risk for the industry. Equipment for producing the confectionery products can be old. I should update manufacturing equipment because new equipment makes it possible to produce the confectionary production faster and of a better quality, thus increasing productivity.

The government would encourage the decision to expand the business. If my business will enter the international market, it will provide new opportunities for my business and local economics. There are many advantages of expanding my company for various stakeholders, such as government, employees, local community, international community and my business, of course. Access to the international markets will increase the companys incomes, which, in turn, will cause the increase in the amount of taxes paid to the state budget. International activities will positively affect the countrys image in the international space. In addition, this will improve reputation of my business in the local community (Dlabay, Scott, & Scott, 2010, p. 8).

Expansion of my business will allow creating new workplaces inside the country and abroad. Entering the international markets is possible only when using the modern methods of management. Detailed marketing strategy is important in the current conditions of the stiff international competition. As a business owner, I should implement a system of international marketing. International marketing is systematic, planned and active processing of international markets at different stages of the movement of confectionery products to the buyer. While implementing the system of the international market, I should take into consideration the features of the individual foreign markets. International market has put forward additional requirements for marketing. Research of external markets is more difficult than research of internal markets. After all, staff of the company has to estimate reliable sources of market information, specialized firms of consultants and other intermediaries. International marketing usually requires the use of unusual ways of the management, flexible and creative application of several of approaches to promote products in overseas markets. Together with my employees, I should ensure that the quality of the goods, packaging, design, and advertising is done according to the international business standards. Industrial complex of my company should match the modern scientific and technical levels. Staff in my organization should be able to develop strong relationships with foreign representatives and professionally organize international bidding, exhibitions, fairs, conferences and more (Zou & Fu, 2011, p. 8).

In addition, traditions and requirements of foreign markets matter. They are associated with national legislation, particularly the features and psychology of the local population, religious characteristics, mentality, and customs. As an owner of the business, I should take into consideration these factors when entering the external markets. Improving communication is an important step of business expansion. Effective international communications are essential for the business continuity. In the process of international communication, together with my employees, I have to overcome the communication barriers, such as language barriers, barriers of perception and influence of culture.

One of the main tasks that I can face is to coordinate and monitor long-term international operations, to study in details the complex of problems, associated with political risks, competition, and unstable exchange rates.

Entering the foreign markets is normally long evolutionary process. The systematic, gradual acquisition of experience in the foreign economic activity is the best way to the success. In any case, it will lead to the business development and contribution to the welfare of society.

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