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There are four types of international risks. Namely (a) Cross-cultural risk; (b) Country risk; (c) Currency risk and (d) commercial risk. Briefly describe each these risks.

Explain the advantages and disadvantages of a joint-venture or strategic partnership.

Why is air transportation and air express so widely used in exporting when ocean transportation is much cheaper?

Entering a new market through licensing is generally the best strategy because market potentials can be tested with little or no investment. Comment.

Briefly explain why has international trade in agricultural products been expanding at a slower rate than exports of manufacturing goods?

A multinational firm needs to have complete control over its subsidiaries in order to make optimum use of its resources and compete most effectively. Comment.

References

There are four types of international risks. Namely (a) Cross-cultural risk; (b) Country risk; (c) Currency risk and (d) commercial risk. Briefly describe each these risks.

Cross cultural risk:

Cross cultural risk identifies the risk of adjustment of different two cultures. In international business sectors most of the time mangers send their skilled and intelligent employees to the foreign sectors so that they can play a vital role in the business purpose. But sometimes employees as well as manager fail to understand the local need and demand through their cultural pattern (Moore, 1983). Then they cannot adjust with their foreign environment. They may find food dissimilarity, life style problem and many others think.

Country risk:

Country risk is a term which is used to define the probable risk of investing in foreign country. In the field of international or global marketing company has to invest a lot of money in the foreign country. But some time the government or local people may go against the company. So in consequences the company has to scarify their profit or even investment. Mass riot or social and economical unrest of the country bring enormous loss.

Currency risk:

Currency risk is also popularly known as foreign exchange risk. In the sector of international marketing a fixed price is always set by the two sectors to import or export. But due to natural disasters and international pressure this fixed priced can be highly modified. So one of the two sides has to carry the loss. Domestic inflation and economic unrest will affect this sector badly.

Commercial risk:

Commercial risk is the uncertainty or the probability of the return of the investment in the foreign country. In the field of international business all companies forecast their probable rate of return or the profit so they can understand their future in the market (Pearson, 1987). But duo to political unrest, change in the consumers living stander and the modification of the government regulation may affect it badly.

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Explain the advantages and disadvantages of a joint-venture or strategic partnership.

Advantage of the joint venture

Joint venture is the recent innovative and effective way of get together of two companies. It provides a lot of facilities to both sides that’s why the number of joint venture companies is increasing day by day. It offers both company to use their innovation and technological advancement. It also provides opportunity to use others regional market place. So the number of consumers will increase. As innovative ideas are bring out more in this sectors proficiency can be achieved through new technological improvement (Hall, 1984). The joint venture helps both companies to use greater natural resources, and more expert employees. That will surely increase their production amount. It also offers to their partners to share their mutual risk. Another important advantage is being elastic in the market place.Any company can act to their consumers quickly and thoroughly through joint venture. Joint venture also helps to understand the new market quickly and easily.