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International Business High School - Essay Example
Before establishing operations in a foreign market, multinational corporations see it fit that they evaluate the economic profile of the country. Though the question seems to imply a dichotomy between economic and financial data to be used for forecasting, the latter can actually be categorized under the former…
Some specific items under the broad categories mentioned includes the amount of potential customers and their preference, trends in economic growth and operating expenses such as wages, costs of local supplies, taxes and other expenditures, operations and profitability of competitors, planned economic ventures and differences in currency denominations. Also included is the determination of availability of resources, inflation rates, external debt payments as a measure of the credibility and involvement of the governing institutions of the country.
Equally important issues that must be considered are risks such as insolvency of the buyer, risk of protracted default or the failure of the buyer to pay the amount due within six months after the due date, risk of non-acceptance and surrendering economic sovereignty. ...