Mgx Assignment

Negotiated Agreements/eliminative/ prophylactic Techniques of Long-term Strategies ill. Use of Personal Relationships lb. Proactive Strategies 1 OFF it. growth Introduction The world of business is becoming overcrowded each day, and companies charter to bring on strategies on a global basis. governmental, legal, cultural and economic circumstances sidetrack significantly around the world. Even though investing in an outside(a) grocery store may require intensive capital, the reward of such a business ay be enormous.The sale of products and services in another do main(prenominal) enables the troupe to increase its sales, expand the products life cycle, improve brand recognition, and trend the risks of direct in a single market (Hill, 2009). Before choosing a contradictory countrified for business, legion(predicate) aspects incur to be considered. For instance, nonpargonil essential consider the nature of politics in that rural as rise as the political risks involve d. Political risks entail the hazardous impacts that political events or conclusions may have on a business. Such risks range from corruption, tax income laws, and protests to wars.To manage these risks, companies must carry out comprehensive research soonerhand. approximately countries may be extremely conservatives while others may be soft to do business (Harrison, 2009). This paper bequeath examine the political aspects touch on intro into an rising ground in comparison to entry into a less come a neighborhooded clownish. Special attention will be given over to brazil nut and Bangladesh. Political Aspects Related to Brazil There ar unalike political systems in Brazil that atomic number 18 likely to affect business. To authorized extent, these risks subject the estates investors and their investment at take.An examination of Braziers political environment indicates that Brazil is a federal republic made up of 26 states and a capital district. It has a dynamic mult i- party system of organization with 20 parties represented within its congress, this is to suggest that it is a democratic state. The quality and military posture of the government services and infrastructure are continuously being change by the government Jeffrey, 2011). Despite the massive improvements that have been witnessed in Brazil, the country still grapples with corruption related risks that may hinder business.These cases were most common during the reign of the former president Luis Niacin Lull Dad Silva. aft(prenominal) taking office in 2002, the president was instrumental in improving the countrys poor economic condition. However, scandals tainted his presidency especially in 2007 when it was observed that government officials were participating in trade of municipal properties. Political protests are a common sight in the streets of key cities in Brazil. This is commonly done by local groupings pushing for certain agendas to be intercommunicate by the gove rnment.Such protestors tendency to involve violence, looting and destruction of property. For instance, Brazil witnessed a considerable number of protests against ALCOA which intended to set up a hydroelectric power plant in the country in 2004. The protests were sparked by the environmental groups who wanted the company to consider mitigating environmental damages in its project (Hill, 2009). Another risk of doing businesses in Brazil is that of rampant police savageness and gang violence. It is estimated that approximately 50,000 homicides are reported every year in the country.It is also alleged that the police are often fag end numerous extra judicial executions. This has tainted the image of what is by far one of the most prominent economies in Latin America (Hefted, 2007). While the country presents numerous reasons that defend its position as a strong market, entry requires extensive research and planning. Regardless of the companys consideration, be it acquisitions or res tructuring, it needs to sympathise the strategic and fiscal impact of such decisions and the fore mentioned implementation risks.Appreciating where the opportunities and risks are positioned, the size of each opportunity and what opponents are doing will arm the company with the confidence to enter the Brazilian arrest (Derek, 2006). Political Aspects Related to Bangladesh same(p) Brazil, Bangladesh has also experienced massive growth in its political systems. For instance, the country has witnessed the transition of power to democratically elected leaders. Despite this significant change, there are still confrontational tendencies within the political front.In 2007, for instance, the government was laboured to declare a state of emergency after the aspiration protested against the feeling presidency of Sheik Hessian Waged. This has, over the course of time, had negative repercussions on strange business growth (Theodore, 010). Moreover, party politics between the opposition Bangladesh Nationalists Party (BAN) and Bangladesh Miami League (AL) catch ones breath rife. It seems neither of the two can cover song down from confrontations on how to run the government. The ongoing trails on war crimes likewise catalyst the political unrests.In fact, these tribunals still have a long bureau to go before issue of verdicts. However, the courts already issued the first ruling which is pass judgment to stabilize the political air. This goes a distance to remove the fear that Psalmists wars could have begun. The political climate is relatively tense for doing business. Recent cases of violence have been reported in areas around Southeast Chitchatting. Such violence is characterized by ethnic clashes between those in stand out of a democratic political science and those who desire the status quo to remain. The political risk is further heightened by a high level of poverty and inflation.It is estimated that roughly one in every three Bangladesh is afflicted wit h abject poverty. Moreover, thousands demonstrate in the streets against the arrest of their trade-union leader. Significantly, the government loses grip of maintaining law and order hence scaring off possible investors. It is no doubt that a country that needs democratic systems and effective leadership is move to repel economic growth. Political risks play a significant consumption of barring investors from investing in the country for fear that their businesses would be at stake.This comparison has shown the aspects of doing business in both Brazil and Bangladesh. Over the departed decade, Brazil has become a progressively attractive and profitable market for international companies. More companies are seen to shift their focus on this emerging economy. Entering Brazil is good, however its not easy ca intention of the Brobdingnagian competition and the availability of business know-how among other reasons (Peabody, 2005). On the other hand, Bangladesh is a less developed cou ntry whose economy major depends on the garments industry.Entry into this country is relatively easy because government restrictions are not deterrent to foreign business. All the same, Brazil is a favorite of many because of the immense authority for profitability. Regardless of a relatively splendid performance in the finishing two decades, the Bangladesh economy is plagued with numerous structural weaknesses, which are yet to be call offed. Some of the significant issues include an incapacitated public sector, intellectualized financial sector, lack of export diversification, poor infrastructure, and pervasive corruption (Scheme, 2004).The failure of the government to address these long-standing problems has adversely affected the investment environment. On the other hand, Braziers problems are on a lower scale, and the government is seen to put structures in place in order to develop all of its sectors. Compared to Brazil, Bangladesh is a poor economy characterized by a vast population living in rural areas. The main economic activity is agriculture armament manufacturing, but many businesses are seen to shift into the service and production industries. The case of Brazil is that of relative advancement.The country has a mature democracy, sustainable infrastructure and relative ease of doing business. Overcoming Political Risks Multi-national companies wishing to invest in the foreign market must develop long-term strategies based on intensive market research. They must be able to exercise their lively position relatively well and run across they maximize on their experience in order to succeed. Depending on existing strategies, companies should insider entering into a venture arrangement with the local representatives or distributors.This is cheaper and will be made easier if the venture company operates the same business. However, any entreat agreement should include terms that permit for local production done a Joint venture, an acquisition, or a impudently plant. Additionally, when entering by these avenues, companies should always embark on a due diligence assessment and channel analysis. This will go a long way in managing any potential political risks (Guppy, 2006). The use of existing advantages within the international company will enable it to have a bargaining rower over the foreign nation.This will work well with corporations who have vast economies of scale that can enable them to specify key business decisions in the host country (Hill, 2009). An entry strategy that maximizes on the use of person-to-person relationships will auger well with any foreign situation. Many foreign companies are known to license distributors or dealers to represent their products and services on a non-exclusive or exclusive basis. As these companies become more discovered in multinational company gains immense power ensuring that the host country doesnt interfere with its affairs.This is referred to as an integrative technique . Another choice that may diminish political risk would be the operation companies from distant offices situated in politically stable countries either in Southeast Asia or India. The whole company or a part of it may be operated remotely (Hefted, 2007). This is regarded as a protective technique. On other occasions, a multinational corporation may foresee certain future hardships while operating in a foreign country. In this case, it will be important to adopt a proactive approach to manage these risks.This strategy entails the use of campaign financing and intensive lobbying to push the host government towards discourse the foreseen adversities. By so doing, the impact of those risks will be reduced before they reach the company. Managing political risks requires the use of negotiated agreements that involve all the necessary stakeholders. For instance, ALCOA managed its risks by agreeing to terms demanded by the protestors. This included an agreement to compensate all citizen s who were resettle following the launch of the hydroelectric project.Similarly, they adopted the use of environmental consultants to function in the taxation of environmental damage (Hefted, 2007). Similarly, cases of corruption and economic risks may be managed through the hiring of transparent agencies or via diversification of products to other countries. However, sometimes the multinational company may consider withdrawing altogether if the terms are too hostile. Conclusion In conclusion, it is fundamental to note that any decision to enter into international business must be accompanied by an assessment of the potential risks and threats. Political factors form the most crucial part of this assessment.This is rue because the political environment of any country has the potential to influence how business is carried out (Itchy, 2010). Given Braziers financial stability and immense support from the state, many investors are streaming into the country. Bangladesh, on the other hand, still lurks behind in terms of political maturity and economic growth. It requires a peeled company to adopt various entry methods in order to remain viable. Nonetheless, by identifying and managing key elements that influence foreign trade, like political risks, new companies are likely to flourish. Adler, N. (2008).