Impact of Political Risks on Tesco’s and Mcdonald’s and How They Can Evaluate the Risks Before Entering the Market Essay Example
Impact of Political Risks on Tesco’s and McDonald’s and How They Can Evaluate the Risks before Entering the Market
By: Ash if Uazzman
Course: - Ba (hons) In Business Studies (Greenwich)
Date: - 19/12/2011
Table of Contents 1. Introduction 3 2. Significance of Political Risk Analysis 3 3. Introduction of Tesco and McDonald’s 3 4. Impact of political risk 4 a. Firm-specific Risk 4 1. Impact of Risks 4 2. Managing Firm-specific Risks 5 b. Country-specific Risk 7 1. Impact 7 1. Managing Country-specific Risk 7 c. Global-specific Risk 9 1. Types of Global-specific Risks 9 2. Managing Global-specific Risks 9 5. Predicting Political risks 10 6. Conclusion 11 7. References 12
1. Introduction
Political risk is any probability that the government do to become the barrier between the business and the country the business is trying to enter and operate in. A business needs to have a certain stable and regulated climate in which he business come in and have fewer or no barriers in running the business. The regulations set by the government for foreign businesses have an influence on the foreign business. Simultaneously the nature of the international business also has an influence on the political activities going on inside the country. A MNE needs to classify and define the political risk in order to identify measure and manage the political risk in that country. Political risk is divided into three levels of risk: firm-specific risk, country-specific risk and Global specific risk. 2. Significance of Political Risk Analysis
Political risk analysis plays a key role in the international business for MNE’s. If the MNE is informed about the political risk in a country of interest they will be able to make a decision if it will be feasible for the MNE to move into the country. Political risk analysis is a great way to take decisions on which country will be fit for the MNE. The MNE will also be able figure
By: Ash if Uazzman
Course: - Ba (hons) In Business Studies (Greenwich)
Date: - 19/12/2011
Table of Contents 1. Introduction 3 2. Significance of Political Risk Analysis 3 3. Introduction of Tesco and McDonald’s 3 4. Impact of political risk 4 a. Firm-specific Risk 4 1. Impact of Risks 4 2. Managing Firm-specific Risks 5 b. Country-specific Risk 7 1. Impact 7 1. Managing Country-specific Risk 7 c. Global-specific Risk 9 1. Types of Global-specific Risks 9 2. Managing Global-specific Risks 9 5. Predicting Political risks 10 6. Conclusion 11 7. References 12
1. Introduction
Political risk is any probability that the government do to become the barrier between the business and the country the business is trying to enter and operate in. A business needs to have a certain stable and regulated climate in which he business come in and have fewer or no barriers in running the business. The regulations set by the government for foreign businesses have an influence on the foreign business. Simultaneously the nature of the international business also has an influence on the political activities going on inside the country. A MNE needs to classify and define the political risk in order to identify measure and manage the political risk in that country. Political risk is divided into three levels of risk: firm-specific risk, country-specific risk and Global specific risk. 2. Significance of Political Risk Analysis
Political risk analysis plays a key role in the international business for MNE’s. If the MNE is informed about the political risk in a country of interest they will be able to make a decision if it will be feasible for the MNE to move into the country. Political risk analysis is a great way to take decisions on which country will be fit for the MNE. The MNE will also be able figure