Risk Analysis in International

Business
Presented byAdhish Kumar Sinha
TEMIN ANDREWS
ASHFAQ AHAMMED . P 2013-15
PGDM E-Biz
 INTRODUCTION

 Risk analysis is a technique used to identify and assess factors that

may jeopardize the success of a project or achieving a goal.
 RISK ANALYSIS
Political

Natural Economical

Reputational Social

Operational Technological

Cultural
 POLITICAL RISK
 Political Risk refers to the risk that a host country will make political
decisions that will prove to have adverse effects on the multinational's profits
or goals.
 A firm cant effectively operate to its full capacity in order to maximise profit
in such an unstable country’s political turbulence.

ECONOMICAL RISK
 Economical Risk are macroeconomic factors that affects consumers
purchasing power and spending . Market vary greatly in their level and
distribution of income .
 This comes from the inability of a country to meet its financial obligations.
 The effect of exchange-rate and interest rate make it difficult to conduct
international business.
 SOCIAL RISK
 Social Risk is related to the things that affect our attitudes, interests and
opinions.
 These forces shape who we are as people, the way we behave and ultimately
what we purchase.

TECHNOLOGICAL RISK

 Technological Risk exposure to loss arising from activities such as design and
engineering, manufacturing, technological processes.
 Lack of security in electronic transactions

 cost of developing new technology.

 COUNTRY RISK

 Country Risk: The culture or the instability of a country may create risks that
may make it difficult for multinational companies to operate safely,
effectively, and efficiently.
 Some of the country risks come from the governments' policies, economic
conditions, security factors, and political conditions.
 CULTURAL RISK
 Cultural Risk the possibility that business will go terribly wrong as a result of a
lack of understanding about executing in a new, culturally foreign market .
 The culture or the instability of a country may create risks that may make it
difficult for multinational companies to operate safely, effectively, and efficiently.

OPERATIONAL RISK
 Operational Risk typically viewed as risks associated with errors in planning or
executing ongoing systems (financial, quality assurance, manufacturing, and so on).
 Risk caused by the assets and financial capital in day-to-day business operations.
 Breakdown of machineries, supply and demand of the resources and products,
shortfall of the goods and services, lack of perfect logistic and inventory will lead to
inefficiency of production
 REPUTATIONAL RISK

 Reputational Risk reputation is damaged overseas, it can affect

your domestic brand.

NATURAL RISK
 Natural Risk identify the availability of natural resources and
whether business is feasible due to impact of environment
 TERRORISM RISK

 Terrorism Risk: These are attacks that may stem from lack of hope; confidence;
differences in culture and religious philosophy, and/or merely hate of companies
by citizens of host countries.
 It leads to potential hostile attitudes, sabotage of foreign companies and/or
kidnapping of the employers and employees.
 Such frustrating situations make it difficult to operate in these countries.