In assessing the viability of locating or starting a business in a foreign country, a country risk analysis is vital in allowing investors to identify associated risks or opportunities that might affect the business in future. This is because a country risk analysis undertakes an in depth investigation on the economic, political and social factors that affects the financial and strategic derailment to the firms in realizing their business objectives (Wagner, 2012). This helps the investors in realizing the profitability and sustainability of a business they intend to start in a given country.
The country risk analysis of Japan shows that the country has a mixed signs of attractiveness to multinational organization intending to expand their international territory. This is shown by its favorable economic risk rating due to its economic environment the country offers to prospective multinational firms. In contrast, the political risk depicts a negative environment due to the current political tensions surrounding the future stability of the country. Furthermore, the aging population of Japan reveals a destination that may be expensive in acquiring an effective and efficient work force. However, the education system of Japan has the capacity of producing the best effective and efficient work force in the global market. Nevertheless, Japan has shown that it is capable of supporting the profitability and survival of multinationals even after tragic series of events. This means that Japan offers a good destination for multinational firms seeking to expend their international territory operation. ...Show more