Global Business Risks

A global business involves complicated processes and transactions. Since you’re already conducting the business across different borders, global business risks will always be present. Countries have potentials and it varies as well.

The woes of doing business are natural and as the owner, you must ensure that you’re equipped with the right strategies.

The risks are divided into different categories like strategic, operational, political, country, technological, environmental, economic, financial, and terrorism. Strategic risks are those that can have a great impact on the business’s competitiveness. This can include new entrants or businesses, substitute goods, competition intensity, and the bargaining power of both consumers and suppliers.

The operational risks are those caused by financial and/or assets that aid in the everyday operations such as the machinery breakdowns, lack of logistics, and production inefficiency. There are times when the risks are related to the actions of top government, instability, and political actions. These are considered as political risks found in the country where you are doing business. The country risks can refer to instability of culture, economic conditions, government policies, security factors, and other local conditions.

Technological risks are those that result from electronic transactions, outdated technology, and new technology failure. This can have a huge impact in the international arena. Environmental risks are those that can affect the health of people due to air and water pollution, brought about by the operations of the business. Such risks can affect the reputation of the company.

Economic risks pertain to changing monetary policies of a country, investment, exchange rates, and interests. These problems are usually encountered by different countries. There are also times when local governments are the ones that make it difficult for firms to adjust to the financial situations which will lead to financial risk. Another risk is terrorism. Risks can originate from lack of confidence, hope, and differences in philosophy, culture, and religion.

With these various global risks, do you think your business still stands a chance in succeeding in your chosen industry? These risks can be enormous and without the right strategies, your business can fail. You must develop a plan of action to address these different areas.


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