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MKTG3310 Notes International Marketing
Contents MKTG3310 Notes .............................................................................................................................................................. 1
Week 1 – Intro................................................................................................................................................................... 7
Broader Stakeholder Environment ........................................................................................................................... 7
Why do companies go abroad? ................................................................................................................................ 7
Restraining Forces ..................................................................................................................................................... 7
Specific Rationales for International ......................................................................................................................... 8
Expansion Stages of Internationalisation .................................................................................................................. 8
Marketing entry strategies – Foreign marketing involvement ..................................................................................... 9
1. Ethnocentric Orientation: ..................................................................................................................................... 9
2. Regiocentric Orientation: ...................................................................................................................................... 9
3. Geocentric Orientation: ........................................................................................................................................ 9
4. Polycentric Operation: .......................................................................................................................................... 9
The Asian Century ................................................................................................................................................... 10
A Need to consider Alternative Perspectives -> not everything is good or bad also need to consider: ............... 10
Key Takeaway Points ............................................................................................................................................... 10
Week 2 - Environmental Analysis – Understanding Foreign Economic, Political & Legal Contexts ............................... 10
Role of Government .................................................................................................................................................... 10
Participator: ............................................................................................................................................................ 10
Facilitator: ............................................................................................................................................................... 11
Regulator: ................................................................................................................................................................ 11
Forms of intervention ................................................................................................................................................. 11
Rationale for intervention ....................................................................................................................................... 11
Political Stability & Risk ............................................................................................................................................... 12
Indicators of Political Stability ................................................................................................................................. 12
Sources of Political Instability ................................................................................................................................. 12
Types of Political risk ............................................................................................................................................... 12
Types of political risk and government intervention: ................................................ Error! Bookmark not defined.
Differing legal systems and jurisdictions ........................................................................ Error! Bookmark not defined.
Law and the Marketing Mix Internationally .............................................................. Error! Bookmark not defined.
Brand Piracy ............................................................................................................... Error! Bookmark not defined.
Economic Analysis .......................................................................................................... Error! Bookmark not defined.
Trends affecting marketers ........................................................................................ Error! Bookmark not defined.
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Stages of market development .................................................................................. Error! Bookmark not defined.
Regional Trade Agreements: ...................................................................................... Error! Bookmark not defined.
Measuring Markets .................................................................................................... Error! Bookmark not defined.
Exchange Rates .......................................................................................................... Error! Bookmark not defined.
8 Strategies for Recession Climates ........................................................................... Error! Bookmark not defined.
Week 4 – Chapter 4 –Social and cultural environment of international Mktg Chapter 6 - Environmental Analysis –
Understanding Foreign Cultural Dynamics ........................................................................ Error! Bookmark not defined.
Concepts of Culture: ...................................................................................................... Error! Bookmark not defined.
Analogy for Culture: ................................................................................................... Error! Bookmark not defined.
Levels at which a culture operates ............................................................................ Error! Bookmark not defined.
Elements of Culture ....................................................................................................... Error! Bookmark not defined.
Material Life ............................................................................................................... Error! Bookmark not defined.
Language .................................................................................................................... Error! Bookmark not defined.
Social Institutions ....................................................................................................... Error! Bookmark not defined.
Relations with the Universe ....................................................................................... Error! Bookmark not defined.
Aesthetics ................................................................................................................... Error! Bookmark not defined.
Impact of culture on international marketing: .............................................................. Error! Bookmark not defined.
Cross-cultural comparison studies: Hofstede ............................................................ Error! Bookmark not defined.
Cultural Influences on Promotional Messages .......................................................... Error! Bookmark not defined.
Culture and communication .......................................................................................... Error! Bookmark not defined.
Different context with communication: .................................................................... Error! Bookmark not defined.
Key cultural differences: ................................................................................................ Error! Bookmark not defined.
Hierarchy of needs between different cultural groups ............................................. Error! Bookmark not defined.
Cultural Adaption ....................................................................................................... Error! Bookmark not defined.
Global Consumers ...................................................................................................... Error! Bookmark not defined.
Global Tribes: ............................................................................................................. Error! Bookmark not defined.
Negotiation .................................................................................................................... Error! Bookmark not defined.
Cultural differences affecting negotiation: ................................................................ Error! Bookmark not defined.
Week 5 – Chapter 7 – Researching international markets and Chapter 8 – International market selection and entry
........................................................................................................................................... Error! Bookmark not defined.
Culture and Consumption .............................................................................................. Error! Bookmark not defined.
Common Mistakes: .................................................................................................... Error! Bookmark not defined.
International Research Decisions:.................................................................................. Error! Bookmark not defined.
Main decisions: .......................................................................................................... Error! Bookmark not defined.
Overcoming Global Marketing Challenges through Research ................................... Error! Bookmark not defined.
The research processes .................................................................................................. Error! Bookmark not defined.
1. Problem Identification: .......................................................................................... Error! Bookmark not defined.
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2. Selection of Research Design: ................................................................................ Error! Bookmark not defined.
3. Information/Data collection: ................................................................................. Error! Bookmark not defined.
4. Analysis and Interpretation: ................................................................................... Error! Bookmark not defined.
5. Dissemination of results: ........................................................................................ Error! Bookmark not defined.
International Market Research Issues - ......................................................................... Error! Bookmark not defined.
Research Design Challenges ....................................................................................... Error! Bookmark not defined.
International Market selection ...................................................................................... Error! Bookmark not defined.
Market Potential Index .............................................................................................. Error! Bookmark not defined.
Measuring Market Size .............................................................................................. Error! Bookmark not defined.
Week 6 – Chapter 9 – International competitive strategy ................................................ Error! Bookmark not defined.
National competitive advantage: ................................................................................... Error! Bookmark not defined.
Determinants of national advantage: ........................................................................ Error! Bookmark not defined.
Concept of clusters: ................................................................................................... Error! Bookmark not defined.
International competitive advantage and generic strategies ........................................ Error! Bookmark not defined.
Porter’s (1980) Competitive Positioning Strategies: .................................................. Error! Bookmark not defined.
Competitor analysis ....................................................................................................... Error! Bookmark not defined.
Porter’s 5 forces ......................................................................................................... Error! Bookmark not defined.
International strategies .................................................................................................. Error! Bookmark not defined.
4 basic components of an effective international marketing strategy: ..................... Error! Bookmark not defined.
Standardisation vs differentiation: ............................................................................ Error! Bookmark not defined.
Segmentation, targeting and positioning (STP): ............................................................ Error! Bookmark not defined.
Different steps: .......................................................................................................... Error! Bookmark not defined.
Segmentation Checklist – 4 measures ....................................................................... Error! Bookmark not defined.
Segmentation Scenarios ............................................................................................ Error! Bookmark not defined.
Bases for segmentation ............................................................................................. Error! Bookmark not defined.
Positioning ...................................................................................................................... Error! Bookmark not defined.
Stages of positioning Process: .................................................................................... Error! Bookmark not defined.
Positioning Strategies................................................................................................. Error! Bookmark not defined.
Week 7 - Chapter 10 -internationalisation, relationships and networks ........................... Error! Bookmark not defined.
Internationalisation ........................................................................................................ Error! Bookmark not defined.
Internationalisation Approaches ............................................................................... Error! Bookmark not defined.
Inward and outward driven entry in international markets ...................................... Error! Bookmark not defined.
Determining Market Entry Mode ............................................................................... Error! Bookmark not defined.
Modes of Internationalisation ....................................................................................... Error! Bookmark not defined.
Exporting .................................................................................................................... Error! Bookmark not defined.
Licensing ..................................................................................................................... Error! Bookmark not defined.
Franchising ................................................................................................................. Error! Bookmark not defined.
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Joint Ventures ............................................................................................................ Error! Bookmark not defined.
Wholly Owned Subsidiary .......................................................................................... Error! Bookmark not defined.
Strategic Alliance ........................................................................................................ Error! Bookmark not defined.
Contract Manufacturing ............................................................................................. Error! Bookmark not defined.
Relationships and Networks .......................................................................................... Error! Bookmark not defined.
Relationship Approach to marketing: ........................................................................ Error! Bookmark not defined.
Understanding Business Networks ............................................................................ Error! Bookmark not defined.
The network Mode: ................................................................................................... Error! Bookmark not defined.
Week 8 – Ch 12 - Planning and Adapting for International Markets ................................. Error! Bookmark not defined.
International Strategic Market planning ........................................................................ Error! Bookmark not defined.
Scenario Planning ........................................................................................................... Error! Bookmark not defined.
Challenges to International Marketing Planning ....................................................... Error! Bookmark not defined.
Internal reasons for marketing plan failure ............................................................... Error! Bookmark not defined.
Strategic Decision – which countries to enter & when .................................................. Error! Bookmark not defined.
Lead Market ............................................................................................................... Error! Bookmark not defined.
Lag Market ................................................................................................................. Error! Bookmark not defined.
Strategic Decision – Adaption or Standardisation ......................................................... Error! Bookmark not defined.
Why Standardise? ...................................................................................................... Error! Bookmark not defined.
Why Adapt? ................................................................................................................ Error! Bookmark not defined.
The Pyramids of global markets: .................................................................................... Error! Bookmark not defined.
BOP Consumers: What are they buying? ....................................................................... Error! Bookmark not defined.
Opportunities at the BOP ........................................................................................... Error! Bookmark not defined.
4 A’s of BOP Marketing – C.K Prahald ........................................................................ Error! Bookmark not defined.
The Leapfrog Effect .................................................................................................... Error! Bookmark not defined.
BOP Innovation Spreading to Developed Markets .................................................... Error! Bookmark not defined.
Branding in International Markets ................................................................................. Error! Bookmark not defined.
Global Brands ............................................................................................................. Error! Bookmark not defined.
Brand Equity: .................................................................................................................. Error! Bookmark not defined.
Week 9 – Chapter 14 – International Pricing Decisions ..................................................... Error! Bookmark not defined.
Price ............................................................................................................................... Error! Bookmark not defined.
Company Factors ....................................................................................................... Error! Bookmark not defined.
Customer Factors ....................................................................................................... Error! Bookmark not defined.
Environmental Factors ............................................................................................... Error! Bookmark not defined.
Technology Factors .................................................................................................... Error! Bookmark not defined.
Distribution Factors .................................................................................................... Error! Bookmark not defined.
Competitive Factors ................................................................................................... Error! Bookmark not defined.
Pricing Decision- ............................................................................................................. Error! Bookmark not defined.
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Pricing Strategies ............................................................................................................ Error! Bookmark not defined.
Full or Marginal Cost Pricing ...................................................................................... Error! Bookmark not defined.
2 Basic approaches to setting international prices: ................................................... Error! Bookmark not defined.
Responding to price changes in international markets – .............................................. Error! Bookmark not defined.
Dealing with Price Escalation ..................................................................................... Error! Bookmark not defined.
Trends in China: ......................................................................................................... Error! Bookmark not defined.
Price Discrepancies .................................................................................................... Error! Bookmark not defined.
Factors Influencing the Degree of International Pricing Strategy Standardisation ... Error! Bookmark not defined.
Rationalising Price Discrepancies ............................................................................... Error! Bookmark not defined.
Pricing Corridor .......................................................................................................... Error! Bookmark not defined.
The effects of currency fluctuation ................................................................................ Error! Bookmark not defined.
Pass-through Rate (PT) ............................................................................................... Error! Bookmark not defined.
Currency Quotation ................................................................................................... Error! Bookmark not defined.
Constraints on setting prices: ........................................................................................ Error! Bookmark not defined.
Global Pricing Strategies: ........................................................................................... Error! Bookmark not defined.
Transfer pricing: ......................................................................................................... Error! Bookmark not defined.
Determinants of Transfer Pricing ............................................................................... Error! Bookmark not defined.
Week 10 – Chapter 15 - Advertising and Promotion Across Languages and Cultures ...... Error! Bookmark not defined.
The communication process: ......................................................................................... Error! Bookmark not defined.
3 major elements: ...................................................................................................... Error! Bookmark not defined.
Constraints in international marketing communication ............................................ Error! Bookmark not defined.
Factors in international communication ........................................................................ Error! Bookmark not defined.
Influence of Culture on how we receive an ad .......................................................... Error! Bookmark not defined.
Cultural Characteristics Advertising Effectiveness .................................................... Error! Bookmark not defined.
Importance of Language ............................................................................................ Error! Bookmark not defined.
Level of education/literacy ........................................................................................ Error! Bookmark not defined.
Level of economic development ................................................................................ Error! Bookmark not defined.
Media Infrastructure .................................................................................................. Error! Bookmark not defined.
Government Regulation ............................................................................................. Error! Bookmark not defined.
Management of promotional communication .............................................................. Error! Bookmark not defined.
Planning Ad Campaigns .............................................................................................. Error! Bookmark not defined.
Factors for message strategy formulation: ................................................................ Error! Bookmark not defined.
Communication tools ..................................................................................................... Error! Bookmark not defined.
Unique Market Traits ................................................................................................. Error! Bookmark not defined.
Receptivity to advertising ...................................................................................... Error! Bookmark not defined.
Sales Promotion ......................................................................................................... Error! Bookmark not defined.
Universal Appeals ....................................................................................................... Error! Bookmark not defined.
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Example of prototype advertising .............................................................................. Error! Bookmark not defined.
Country of Origin ............................................................................................................ Error! Bookmark not defined.
Country of Origin Effect: ............................................................................................ Error! Bookmark not defined.
Role of COO in marketing strategy ............................................................................ Error! Bookmark not defined.
What can governments do to support companies? .................................................. Error! Bookmark not defined.
Week 11 – Logistical Challenges – Avoiding Price Escalation & piracy .............................. Error! Bookmark not defined.
Distribution: The Simplest Marketing Task? .................................................................. Error! Bookmark not defined.
Role of Intermediaries ............................................................................................... Error! Bookmark not defined.
Distribution Criteria ................................................................................................... Error! Bookmark not defined.
Distribution Strategies - Channel Configuration Decision (3 Cs) ............................... Error! Bookmark not defined.
Third-party logistics (3PL) .......................................................................................... Error! Bookmark not defined.
Selection - Choosing the right partner ....................................................................... Error! Bookmark not defined.
Seven Rules of International Distribution .................................................................. Error! Bookmark not defined.
Supply Chain Transparency ........................................................................................ Error! Bookmark not defined.
Modes of Transport ....................................................................................................... Error! Bookmark not defined.
Factors to consider (Hollensen): ................................................................................ Error! Bookmark not defined.
Intermodal transportation ......................................................................................... Error! Bookmark not defined.
Who Pays when things go wrong in distribution? ..................................................... Error! Bookmark not defined.
Real or Fake? – What happens when there are fake products in the market? ......... Error! Bookmark not defined.
The Gray Market ........................................................................................................ Error! Bookmark not defined.
Possible Strategies companies take to protect themselves: ..................................... Error! Bookmark not defined.
Week 12 – Chapter 11 and 18 - Marketing Strategies in a Globalised World ................... Error! Bookmark not defined.
Globalisation .................................................................................................................. Error! Bookmark not defined.
Drivers of globalisation: ............................................................................................. Error! Bookmark not defined.
Characteristics of ‘Globals’ – the global firm ................................................................. Error! Bookmark not defined.
Global Strategy ............................................................................................................... Error! Bookmark not defined.
Multinational Strategy ............................................................................................... Error! Bookmark not defined.
Global Strategy Benefits: ........................................................................................... Error! Bookmark not defined.
Drawbacks: ................................................................................................................. Error! Bookmark not defined.
Global Strategy Levers (George Yip) ...................................................................... Error! Bookmark not defined.
Glocal - Think Global, Act Local .................................................................................. Error! Bookmark not defined.
Manage Brands’ Global Characteristics ..................................................................... Error! Bookmark not defined.
Global Advertising Approaches ...................................................................................... Error! Bookmark not defined.
The “brand status cluster” approach ......................................................................... Error! Bookmark not defined.
The “shared global culture” approach ....................................................................... Error! Bookmark not defined.
The “fundamental human truth” approach ............................................................... Error! Bookmark not defined.
The “unique product benefit” approach .................................................................... Error! Bookmark not defined.
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International Rivalries .................................................................................................... Error! Bookmark not defined.
Week 1 – Intro Broader Stakeholder Environment
Why do companies go abroad?
Market drivers
• Market needs/ client demands
• Market needs/ Consumer interest: people in other countries demanding products
• Product life cycle expansion: if these markets are distinct might move on i.e. DVD players no longer
needed/wanted here but still are overseas
• Governments: via the creation of policies and assistance measures that facilitate international
involvement and the creation of standards that are compatible with those in other countries.
Cost drivers
• Economies of scale: deriving from supplying more markets than just AUS or NZ can drive down research,
engineering, design, creative and production costs (manufacturing efficiencies)
• Cost savings: cheaper factors of production (e.g. clothing in Bangladesh).
o Rarely can development costs be recovered from one national market alone, which is why such
products like pharmaceuticals are usually launched on a worldwide basis.
• Technology/Communication advancement– Everyone aspires to latest technology, if a company can
manage technology in one country it has experience that is relevant to rest of the world.
Competitive drivers
• Saturated local markets – need to move overseas to stay competitive -> may be less saturated over
there
• New foreign entrants
• Mergers and acquisitions – bought out by international companies i.e. vegemite
• Keep up/stay ahead of rivals
Restraining Forces
• Differences between national markets: usually sufficient to require adaption of at least some elements of
the marketing mix to suit local conditions.
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• May be a function of economic development, the political system, legal requirements, societal expectations
and cultural norms
• Countries have control over entry and access
to their market i.e. tariff and non-tariff
barriers
• Actual or perceived risk: commercial risks,
cross-cultural risks, country risks (political and
legal) and currency/financial risks.
Specific Rationales for International Proactive-Internal / External, Reactive–Internal / External
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Expansion Stages of Internationalisation External ring just for international marketers
Trying to understand forces outside of our control and
comfort zone. You need to shift between standardizing
and adapting. It is more economic to keep doing the
same thing but not as beneficial when we need to adapt
to different cultures.
<- There is no right or wrong and
no linear development (can
start/skip different stages).
Marketing entry strategies – Foreign marketing involvement • Four broad types of orientation of a firm towards foreign marketing:
1. Ethnocentric Orientation:
• A firm considers that the products, marketing strategies and techniques applicable in the home market
are equally so in the overseas market as well.
• All foreign marketing operations are planned and carried out from home base, with little or no
difference in product formulation and specifications, pricing strategy, distribution and promotion
measures between home and overseas markets.
• Firm generally depends on its foreign agents and export-import merchants for its export sales.
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2. Regiocentric Orientation:
• Firm accepts a regional marketing policy covering a group of countries which have comparable market
characteristics.
• Operational strategies are formulated on the basis of the entire region rather than individual countries.
3. Geocentric Orientation:
• Firms accept a worldwide approach to marketing and its operations become global.
• Management establishes manufacturing and processing facilities around the world in order to serve the
various regional and national markets through a complicated but well co-ordinated system of
distribution network.
4. Polycentric Operation:
• International marketing activities on a country to country basis.
• Each country is treated as a separate entity and individual strategies are worked out accordingly.
• Local assembly or production facilities and marketing organisations are created for serving market needs
in each country.
• Works better among countries which have significant economic, political and cultural differences and
performance of these tasks are free from the problems created primarily by the environmental factors.
The Asian Century
As Australia we are now more ‘regionally
focused’ on the countries closer to us that
have money like China. Used to be that we
would focus on countries similar to us like
the UK.
Trend now of Foreign trade arrangements
with Asian countries.
• The world’s 500 largest companies have spread more globally since the 2000s – no longer just a few main
ones
A Need to consider Alternative Perspectives -> not everything is good or bad also need to consider:
• Environmental impact
• Increases inequality
• Human and environmental rights abuses -> how this affects others and our brand
• Cross country reliance and exposure to crashes -> what is ethical balance with cross cultural differences
• Loss of local jobs, industry
• Cultural dilution -> are cultures diverging now that we eat drink see same thing as others?
Key Takeaway Points
• Marketing in an international context is conceptually similar but has additional challenges – language,
culture, political, logistical etc.
• Thanks to globalisation, almost every industry is influenced by international forces
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Week 2 - Environmental Analysis – Understanding Foreign Economic, Political &
Legal Contexts Goals:
• Introduce some of the macro economic and political/legal factors affecting marketing strategy
• Understand the risks involved in entering in foreign markets
• Consider contextual differences that influence foreign consumer decision making
Role of Government
Participator:
• Generally, government companies become more and more privatised.
• An extreme form of involvement is the state trading company (STC) which is
common in current and former communist countries.
• Government can control sale of certain products i.e. Canadian government runs
liquor stores – only distributor.
• A lesser form is the Australian and New Zealand situation of control over the
marketing of agricultural products by statutory marketing authorities
established by government and commercial interests.
• All countries have commercial activities undertaken by government, especially in areas of: transport,
infrastructure, defence, health, education and public welfare. in some of these, government is sole customer
i.e. water and sewerage.
• Privatisation: way for governments to reduce their involvement in commercial undertakings via privatisation
– this reduced involvement is driven by a need to sell off public sector enterprises to balance the budget or
because of rising costs of public sector activities.
Facilitator:
• Actively promote Australian goods in foreign market – they have officers in certain companies and provide
conventions and advice on how to set up and run internationally.
• Act as facilitator at the macro level via having a national industry policy that develops those factors of
production considered to be essential to success. i.e. Sometimes have free trade agreements to encourage
and facilitate trade with other countries
• National plans often focus on development of resource conversion industries or high value-added industries.
• Policies create new capacity and capability through government assistance provided to companies. i.e. tax
incentives to encourage investments in specific industries or activities, low-interest loans to attract capital to
designated activities, education programs to create a pool of skilled workers and investment in
infrastructure relating to targeted activities.
• Facilitate on micro level via export incentives i.e. remission of taxes paid as with rebate of payroll taxes, the
provision of tax deductions in relation to the volume of exports generated and grants to offset promotional
expenditure in international markets.
Regulator:
• Government protects consumers – gives advantage to own companies to protect local sellers i.e. putting
tax/limit or regulation on foreign company goods to encourage local produce.
• Governments regulate in terms of setting mandatory standards and by imposing conditions for the
repatriation of profits, dividends and royalties, as well as imposing rules covering foreign exchange and by
setting exchange rates.
Forms of intervention • Tariffs – tax that exists on foreign product on their company
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• FDI restrictions – limit to how much a foreign company can buy shares/water/farm land in Australia
• Quotas – on how much can be exported/imported
• Anti-dumping duties
• Countervailing duties – if one country puts a tariff on us we will counter balance and do the same to
them or subsidise our local industries
• Embargos – a stop on trade to particular countries
• Export bans – i.e. stopped live trade of cattle rom Aus to Indonesia
• Product standards – to protect Australian consumers with a level of standard for imported products
Rationale for intervention
• Protect domestic employment – put local interests first
• Protect consumers – from imported human, animal and plant health risks
• Protect environment/agriculture – uncontrolled inward foreign investments can result in lower local
product, reducing food self-sufficiency and the export of lower value-added resources
• Infant industry argument – if you are starting out in an industry that other countries are more advanced
in then they protect local start-ups and make them more internationally competitive
• Support domestic firms
• Self-sufficiency to achieve national security
• Retaliation – official investments and export promotion are needed to compete with countries that do
the same
Consider the effects of Intervention (i.e. sanctions) on;
• Companies
• Consumers
• Governments
Political Stability & Risk From marketing perspective, change is key concern. Needs to be gradual and non-violent when it occurs to have
minimum adverse effect on a business’s activities in the country. Hence need awareness of political stability.
Indicators of Political Stability
• Degree of social unrest due to economic hardship, internal dissension and racial, religious and
ideological difference
• Frequency of regime change – hard when you don’t know who leader is going to be/ what policies are
going to be to make decisions. May affect attitude towards business if there is now different
socioeconomic approach
• Degree of nationalism – openness to other countries
• Cultural/ethic divisions - political boarders often contain separate national groups.
• Religious/linguistic diversity – i.e. Tamil and Sinhalese in Sri Lanka
Sources of Political Instability
• Political sovereignty –
o idea of countries being able to make own decisions and to what extent that is happening.
o Lead nations to try to exert control over foreign-owned enterprises operating within borders.
o Mostly issue with developing nations who increase taxes on foreign corporations for example to
protect local firms and protect political independence from foreign economic domination.
• Political conflict –
o Categorised as turmoil, internal way and conspiracy - disagreements of what country is doing
o Not always lead to a less favourable business climate in the long term, although the climate may be
adversely affected during the period of conflict.
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• Political intervention
o Occurs when decisions by government(s) in the host country force the foreign firm to change its
strategies, policies or operations i.e. intervening in operations to further their own interests.
o Expropriation – foreign country taking foreign owned factories/product or stores. Recognised in
international law as a right of a sovereign state, provided foreign party is given compensation.
o Domestication – less extreme but making that company more and more national/ local instead of
international
Corruption: big form of risk. Even though something may look ok, there are laws and people can surpass/avoid to
trade in business dodgily.
Types of Political risk The possibility that a country’s political environment will adversely impact on a firm’s ability to operate effectively
and profitably in a country one day and the firm may find itself vilified by its government the next.
1. General Instability – internal threats i.e. coop, uprising, change in laws -> things changing and being hard
to predict
2. Ownership – risk to property and the lives of the expatriate employees -> not being able to retain
ownership of investments
3. Operating – interference in the ongoing operations of the company overseas -> will you maintain control
of operations and work how you want to