国际市场政策环境Political_Environment.pptVIP

MKTG 3002 Lec 4 2003 Teresa Davis Political Environment Structure of Government Political parties Ruling parties philosophy Communism vs Socialism etc Government policy regarding international trade and investment Sources of political risk Competing political philosophies (nationalism, socialism, communism) Competing religious groups Social unrest and disorder Vested interests of local business groups Recent/impending political independence Sources of political risk cont… Armed conflicts Internal rebellions for political power Terrorism New international alliances Political Risk Effects Confiscation: loss of assets without compensation Expropriation with compensation: loss of freedom to operate Operational restrictions: market share, product characteristics, employment policies, locally shared ownership, etc. Political Environment Loss of transfer freedom: financial, goods, personnel or ownership rights Breaches or unilateral revisions in contracts and agreements Discrimination such as taxes, compulsory subcontracting Damage to property or personnel from riots, revolutions, wars and terrorism Reduce Political Risk Ingratiate host government Contribute to government economic and political goals Increase exports to earn hard foreign currency Good Citizen Image Location Charity Community Joint Ventures With local firms Reduce Political Risk Expand investment base Involve other investors, banks etc Insurance EFIC: Export Finance Insurance Corporation Sell/license technology Rather than capital investment Assessment of Risk Grand Tour Tour country for strengths – detailed insights on micro level and profitability risks Tour country for weaknesses – static moment in time Old hands Businessmen, diplomats, journalists, educators etc Additional information – focus on macro Assets protection, investment recovery Assessment of Risk Delphi Factors that influence nature and magnitude of international risk factors are ranked on a predetermined scale, consistent meas