Risks affecting SKs decision to open a new company in Bolivia - Free Essay Example

Sample details Pages: 5 Words: 1427 Downloads: 2 Date added: 2017/06/26 Category Business Essay Type Analytical essay Did you like this example? Report Introduction SK As a catering companies in New Zealand, has opened in several countries, the company now plans to develop business in the Bolivia, the report covers the following seven risk will face, including political, economic, cultural, demographic, nature, technology and competitive environment. 1,Political Risk: Risk Investment risk is the most difficult to predict and analyze, but also foreign investors most concern is political risk. Some developing countries and developed countries prone to political instability and regime change, the continuing ethnic conflict, even civil war or secession, the possibility of the existence of political risk is usually relatively large. In addition, the host of the political risk also includes the risk of expropriation of foreign investors, the risk of exchange restrictions, government default risk, the risk of delayed payment, the risk of changes in policies and so on. Bolivia pursues an independent forei gn policy of peace and non-aligned, and safeguard national independence and sovereignty, equality of all countries adhere to the peoples self-determination, non-interference in other countries internal affairs, peaceful settlement of international disputes, highlighting how far diplomatic and pragmatic economic diplomacy (Chinese Commerce Department, 2010). Legal risk is the risk of loss due to legal reasons to investors. Due to the different political systems of the world, economy, history, geography, education and cultural level, to take economic development strategy, industrial and technology policies are different; each countrys legislation on the treatment of foreign investment there will be some differences. At present, international and multilateral investment and investment-related economic activity is still no uniform international regulations. Thus, multinational corporations must face the risk of multiple legal environment brought about institutional differences. Bolivias foreign trade management system currently consists mainly government agencies, non-governmental organizations as well as supervision and inspection agency. Constitution and Trade is the core of the system of trade regulations in Bolivia, Bolivias foreign trade is the basic guidance and regulations, but also the main basis for the development of the Bolivian other trade regulations (Chinese Commerce Department, 2010). 2,Economic Risk: Economic risk refers to changes in foreign exchange rates on international multinational enterprises bring uncertainty. Many factors impact of exchange rate movements, such as the balance of payments, the relative inflation rates, interest rates, foreign exchange reserves. (Fengpin, 2010) Bolivian government to encourage foreign capital into the domestic market, to develop the appropriate legal and policy: to encourage and protect national and foreign investments; recognition of foreign and domestic investors in the treatment of rights, obligations and equal protection; sinks into free capital, Export; technology transfer fee, remuneration freely remit, there is no limit other commercial loans; currency exchange freedom; access port freedom; signed free-investment insurance contracts; dispute arbitration freedom (Chinese Commerce Department, 2010). 3,Risk Culture: Culture risk refers to differences in language, customs, values and attitudes, religion and other aspects of the host country to foreign investment enterprises impact of uncertainty. Mainly reflected in three aspects: First, consumers and their host country differences in consumer spending habits, preferences and purchasing power; Second, the differences in the different cultural backgrounds of employees and other aspects of the formation of values; Third, differences in institutional culture. Bolivia is a multi-ethnic country, mainly in Africa, indigenous peoples and European immigrants. About 95% of residents were Catholic, can be seen in the main town of the ch urch building and scales (Chinese Commerce Department, 2010). 4,Demographic risk ¼Ãƒâ€¦Ã‚ ¡One risk populations also exist in Bolivia is multi-ethnic, mainly indigenous peoples. According to statistics, a total of 37 within indigenous communities in Bolivia, Max Mara Aida Quechua people and the population, were 228.1 million and 152.5 million, Guarani man 62600. As a food and beverage industry, we must understand the local eating habits, most peoples diet is meat-based, mainly cattle, pigs, chicken and lamb dishes are common on the table tomatoes, potatoes, onions and lettuce (Chinese Commerce Department, 2010). 5,Physical/natural risk: Bolivia is located in the middle of South America, is one of the two landlocked countries in Latin America. Northern and eastern borders with Brazil, Argentina and Paraguay and southern neighbors, west and southwest connected with Peru and Chile, respectively. Spring and fall are the best time to Bolivia, warm spring, and rainfall is rel atively small, and low humidity. Pleasant autumn weather, rainfall is very low, suitable for travel. Bolivia is one of the three big countries planted in South America, so enjoy the U.S., EU and Japan and other developed countries to give preferential policies for its exports. Regional organizations and bilateral agreements also provide for Bolivian exports preferential treatment. Bolivia, Venezuela, Ecuador, Colombia and Peru (Chinese Commerce Department, 2010). 6,Technical risks: technical risk is the overseas investment enterprises within a limited time frame ability to successfully develop new products, the uncertainty. Foreign relevant statistics show that the success rate of new product development projects only 1/6, the successful development of new products into the market after the success of only 2/3. This fully reflects the greater technical development risks, the likelihood of this risk is not only from the technical success, but also from the economic aspect, that af ter the success of a new product is being developed, but also the ability to gain economic . It depends on the situation at the cost of the established market demand conditions, market demand,will receive income, the opposite will be a loss(Chinese Commerce Department, 2010). 7, Competitive risk: For now, the main foreign investors in Bolivia, mining and oil and gas investment in areas(Chinese Commerce Department, 2010) ¼Ãƒâ€¦Ã¢â‚¬â„¢such as food and beverage industry and therefore investment, mainly adapted to the local peoples eating habits, it is able to overcome the risk of competition, as opposed to a single local diet, the introduction of foreign-style diet, for locals, is a shock and temptation. Bolivia fisheries developed, you can use local resources, launch the product in order to reduce competition in this country and the local industry costs, on the one hand New Zealand their own special products, on the one hand there are local products. Conclusion For th e risks set forth above: 1, Changes in foreign exchange rates on international multinational enterprises bring uncertainty. Many factors impact of exchange rate movements, such as the balance of payments, the relative inflation rates, interest rates, foreign exchange reserves. Foreign exchange risk species are trading risk, currency risk and economic risk categories. (Wenqiang,2010) Risk of future revenue when the volatility of international companies suffered foreign exchange rates occur. It is a potential risk. Changes in future income depends primarily on the size of exchange rate changes on the cost of the products, prices, production and other effects of the size. Effects are long-term, for international companies, the ability to avoid economic risk is critical, it is related to business investment or operating results overseas. Meanwhile, the accuracy of prediction of the potential risks of this will directly affect the corporate financing, sales and production of strategic de cisions (Fengpin, 2010) Exchange rate risk management mechanism should be established in advance of changes in foreign currency market may appear to take appropriate countermeasures. 2, through the acquisition of Bolivias way, not only to the rapid increase in the short-term assets, but also direct access to key technologies, improve the technological innovation capability and competitive advantage, reduce investment costs, leverage existing business networks and social relations Bolivia local businesses, difficult to manage and reduce operational risks.(Wenqiang,2010) 3, you can study the Bolivian peoples preferences, production closer to the local people love the product, more effectively improve the companys corporate image and reduce the resentment of the local people.4 ¼Ãƒâ€¦Ã¢â‚¬â„¢Because of the large size of the SK company and strength. With combined strengths in the New Zealand market competition excellence. Can rely on its existing brand or technology, or a combinat ion of scale and other advantages of absolute advantage, concentrate on the Bolivian market, to create an international brand for the center. Promote enterprise-wide work. Ultimate strategic goal of becoming the world-renowned multinational companies. Brands such intangible assets. Allows businesses to add value beyond the value of higher than normal, creating huge commercial profits for the enterprise. Enable enterprises to achieve rapid and sustained development. Brand should remain in the world. When companies become world famous brand development, it means that the broader market, as well as a large number of loyal customers and good corporate image of the country. Chinas Haier Group is to implement a typical such transnational business strategy.(Fengpin,2010) References ¼Ãƒâ€¦Ã‚ ¡ Wenqiang,W.(2010).International Finance Theory and Practice.Chengdu,China:Southwest University of Finance and Economics Press. Fengpin,Y.(2010).Exchange Rate Risk Management in Enterpr ise.Hubei,China: Hubei Institute of Rural Finance. Chinese Commerce Department. (2010). Foreign Investment and Cooperation Country (Region) Guide à ¢Ã¢â€š ¬Ã¢â‚¬Å" Bolivia. Beijing, China. 1 148631433 Don’t waste time! Our writers will create an original "Risks affecting SKs decision to open a new company in Bolivia" essay for you Create order

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Analysis of Andrew Jackson and Martin Van Buren free essay sample

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South Carolinian planters saw that the protective tariff, passed by Congress in 1 824, as oppressive since most of the revenue made from it was invested in the northeasts manufacturing industry. They were more infuriated when the tariff was raised in the summer of 1828 (Brinkley 207).The South Carolinians and Vice President John C. Calhoun saw the taxes as blatantly unconstitutional, exceeding Congresss powers to raise necessary revenues and oppressing one section of the country while enriching others (Willets 63). A nullification document written by Calhoun known as the South Carolina Exposition and Protest was passed by the state legislature in 1 832 as a response. This text announced that any state could declare its original sovereignty and disregard federal laws that are found offensive in their borders.In retaliation, Jackson sent federal troops to South Carolina to enforce the law, but before any violence could ensure the state backed down Brinkley 207). 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Power Of The Atom Essays - Telephony, Lady Gaga Songs, 24 Hours

power of the atom The unleashed power of the atom has changed everything except the way we think? Technology has developed and changed so much over the past century. Each day new things are being developed, and new things are released to the buyer's market. Who would ever thought we'd be able to talk live with someone who lives on the other side of the world. It's truly amazing all the luxury's we have, and it's amazing how one those these inventions has the capability to change the world in a very drastic way... Could you imagine a place with no electricity, no communication, and no transportation other then a horse and buggy? Believe it or not, but there was a time when these things were non-existent. At one time people sent messages to other towns through a thing called ?wiring? basically it's communication using morse code. They also had an extremely slow mailing service, that took weeks to meet it's desired destination, because they had to walk on foot or on horse back. There were no cars, and there were no airplanes, only there own two legs, and a horses. Something needed to be done. It took way too long to get into contact with people, and it took the same amount of time to get a response. In 1886, a man by the name of Alexander Graham Bell developed an interesting object, that gave you the capability of talking live with one person, other then yourself. This object later became known as the well respected telephone. Although when Bell first invented the phone there were many kinks that needed to be worked out. And over time, after being constantly worked with and being revised the telephone was close to perfection. It took sometime for the phone to really catch on, but when people began to see how convenient it was, families everywhere went out and purchase one. Imagine going one day, 24 hours without using the phone once. I don't know about you, but I can't go more then a couple of hours without holding that receiver against my ear. Being grounded off the phone, is a fate worse then death. It's hard for me to imagine that my own forefather's lived in a time were there were no computers, and there were no telephones. Communication continues to progress daily. With computers getting better with every passing moment. Who know's soon, maybe computers will replace the telephone. Or they'll have a 911 dispatcher hooked onto e-mail incase something happened to you while you were on-line. It's hard to envision the technology that we'll have in the future, maybe nothing major will be invented, but maybe something as big as the telephone. Everyone uses the telephone, from the poorest man in the world to the President of the United States. It's a great way of communicating with someone who lives to far way to go see. I'm grateful for the telephone, because it allows me to talk to my family who lives over 2,000 miles away. It's good for long- distance relationships because, it enables you to hear someone's voice instead of just seeing their hand writing. Talking on the telephone is a luxury that most take for granted. I'd like to see this world get by for 15 minutes with absolutely no electricity. We rely on technology to do everything for us. Machines are taking over the jobs of humans, humans are being replaced by metal. I think that new inventions that really impacted our world, have the power to change the way we think. The whole procedure of inventing something is a learning process. This learning may not involve the whole public, because the public lacks the knowledged to build these things, but once it is put onto the market, it can really impact the public. The computer has opened a lot of peoples minds, people may not know this but, while they're surfing the net their learning. After a while of learning the brain begins to change the way it thinks. But, we think a lot less, because we have other things such as machines to think for us.