Developing Countries

Developing Countries - the cost Potential Risks for...

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Although these countries are relatively poor, they are growing rapidly. 1. If the innovation does not come from first-world multinationals, there are any numbers of local firms that are ready to grab the market with low-cost products. 2. As the consumers and governments of many first-world countries are rediscovering the virtues of frugality and are trying to cut down expenses, these products and services originally developed for the first world may gain significant market shares in developing countries as well. 2. Example: GE has committed significant resources to developing products that meet the needs of developing nations, products that deliver adequate functionality at a fraction of
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Unformatted text preview: the cost. Potential Risks for International Expansion: A. Political Risks B. Economical Risks C. Currency Risks D. Management Risks A. Political Risks – Potential threat to a firm’s operations in a country due to ineffectiveness of the domestic political system. 1. The absence of The Rule of Law – This is another source of political risk. The Rule of Law is a characteristic of legal systems where behavior is governed by rules that are uniformly enforced. 1. Examples of Political Risks - Military, demonstrations, violence, terrorism, absence of the rule of law, etc....
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