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International Market Expansion: Abercrombie & Fitch into Brazil - Research Paper Example
Author : quincy68
Finance & Accounting
Pages 6 (1506 words)
International Market Expansion: A Case Study of Abercrombie & Fitch Entry into the Brazilian Market Name Institution International Market Expansion International Market Expansion: A Case Study of Abercrombie & Fitch Entry into the Brazilian Market Introduction Getting into the international market or expanding to other markets in the global economic spectrum is never an easy task for businesses…
Some foreign markets may appear attractive with good incentives and tax holidays, when the true condition on the ground is poor consumer behavior towards newly arriving products or businesses. Some may also depict law costs of production characterized by cheap power, raw materials, labor and transport, but with very high tax rates and strict laws for involvement in social corporate responsibilities. Since Abercrombie and Fitch is one of the multinational companies forecasting to open and expand new market in the rapidly growing and stabilizing Brazilian economy, it must first consider understanding various risks likely to occur in its foreign mission in Brazil. Risk of Foreign Currency on Operations of Abercrombie & Fitch Foreign currency risks involve risks accruing from the periodical fluctuations in the value of the foreign currencies. One type of financial risk accruing from fluctuation in foreign currencies, and likely faced by Abercrombie and Fitch is the transaction risk (Mullineux, 1987). Exporters and importers are the likely business people to experience such risks, as they need to deal with different currencies to stamp their trading. ...