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International Business

International Business. Risk Analysis. International Business.

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International Business

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  1. International Business Risk Analysis

  2. International Business • ABC, one of the leading Chemical companies in the world, manufactures a wide range of specialty and commodity chemicals for various industries like Textiles, Foods, Electronics, Steel and Chemicals. Its competitors are large, Globalized corporations. The industry is further characterized by Powerful regional / local companies especially in ASIA. Additionally, growing environment concerns have led to increase Governmental regulations locally, which add to the already high fixed costs. The Board of Directors feels that the company must globalize to survive and the primary focus in ASIA, EUROPE and LATIN AMERICA. The company wants at least 20% of its sales from overseas markets and 20% of the total sales from Asia in the next 5 years. The Board is concerned about cultural, economics, political and other aspects of Globalization and the impact of these on the firms. The Management is also well versed in EXIM-POLICY and aware of Risk Management.

  3. Export-Import Policy-2002-07 Highlights: -Quantitative Restrictions on Exports removed -8-9% Export Growth -India aims to capture 1% of Global Trade by 2007 -Special Focus on cottage and handicraft industry -20 Agro export zones notified -Transport assistance for agricultural Products -DEPB and Advance license and EPCG to continue -SEZ permitted to set up overseas banks.

  4. Export-Import Policy • External Commercial Borrowings in SEZ • Duty Free Imports for Handicraft sector • 100% retention of Foreign Exchange in EEFC accounts • Business Centre in India missions abroad • Links with CIS countries to be revived • Repatriation period for realization of export proceeds extended from 180 days to 360 days • Penal interest rate of bonafide defaulters to be brought down from 24% to 15%.

  5. Export-Import Policy • Exports exempted from service tax. • DEPB extended till march • New Export promotion scheme for hi-tech products

  6. Risk of MNC • The degree of business risk is higher in case of MNC • There is no safety net. Nothing to fall back when things do not go right. Exp: Coke/IBM • MNC may not be treated on par with local the firms • MNC has lesser credibility than a home grown company • The geographical, intercultural, economic, social, political and administrative distances may be far greater for an MNC than the domestic firms

  7. Risk Management Management is heavily centralized. Advice the Board on the Globalization move and entry strategies in different Asian Markets and also discuss Domestic Business and International Marketing?

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