International Busines Assignment 2022

INTERNATIONAL
BUSINESS 1
International Business
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INTERNATIONAL
BUSINESS 2
Introduction
The process of venturing new markets in anticipation of market opportunities can be
daunting. Global companies seek new opportunities in foreign nations following market
saturation in their home countries. Such opportunities may be in terms of access to new markets
which leads to a new pool of customers, lower costs of operations due to cost advantages linked
to sourcing resources in foreign countries and favorable government policies favoring foreign
direct investment (Bhhat, 2014). However, there are risks and uncertainties associated with
conducting business in a foreign nation such as political risks and cross-cultural risks. The
political risks can translate to uncertainties in business policies as different regimes take the
horns of power while cultural risks tend to affect the demand of various products following
language and norms associated with consuming certain products. It Is also crucial for global
companies to understand how branding and advertisement work in certain countries as this can
convey different meanings for the consumers in such countries.
Political risks
One of the obvious risks in global business is uncertainty and instability associated with
politics. Nations and emerging markets that may provide numerous opportunities for expanding
global enterprises may also lead to obstacles that established markets do not (Venkateswaran,
2012). Thus, before considering expansion into unfamiliar or new markets, it is imperative to
conduct a risk evaluation of the political landscape of a country. Matters such as ill-defined or
unfavorable policies and corruption practices can be catastrophic in emerging markets (Peng.,
2013). New governments following changes can translate to changes that may impact policy,

INTERNATIONAL
BUSINESS 3
legal parameters and interest rates which may be detrimental to the operations of foreign
enterprises and investment.
Application of theory
An emerging trend towards economic politicism leads to the prevailing political arena
uninhabitable for global enterprises (Ball, 2013). A good example is companies such as Facebook
which is banned from operating in China in preference for social networks based in China and
also because of government control over the content that gets published over the internet. Hence,
monitoring political arrangements and planning can mitigate risks associated with doing business
in foreign counties linked to political risks.
Opportunities
Markets
The more identical markets in various regions are, the greater the need for a firm to
globalize. Coca-Cola, for instance, is fairly identical across the globe since the demand for soft
drinks is significantly the same in every nation. The aircraft manufacturing dominated by Boeing
and Airbus is dictated by a highly identical market for its commodities that is airlines across the
world that have the same demand with regards to commercial planes.
Application of theory
It is also imperative to understand that new markets translate to access to new customers
which is an opportunity for a company to showcase its products. Coca-Cola, for instance,
identified a gap in customers' demand for zero sugar beverages. Coca-Cola thus went ahead and