The Risks Associated with Investing in Foreign Markets - Example

The paper "The Risks Associated with Investing in Foreign Markets" is an outstanding example of a business capstone project. The aim of this report is to evaluate the risks associated with investing in foreign markets. The case study presented in this report provides an analysis of the risks associated with investing in India as a potential market base for Multinational Companies in the fast-food industry. Over the past decade, India has participated in global trades and liberalisation as a means to overcome the challenges linked to a falling economy (Chitra et al. 2012). The implementation of new policies that support free international trade to prosper in India, has opened new opportunities for several food chains to invest in the country. Furthermore, the globalization of many companies across the world has been a driving force for the administrative bodies in India to open its borders to interdependent trades with other countries.

According to Corset & Roy (1988) multinational enterprises operating in emerging markets are likely to be anxious about the cultural, social and political factors that will interfere with the decision-makers within these companies. Additionally, firms operating in growing economies tend to face challenges due to arising regulations that eventually impose unilateral policies, restrictions on revenue income, increased competition from local companies, employment and tenure restrictions. Corset & Roy (1991) affirm that all these factors are assumed to be due to the lack of support from the external environment such as the local government in the country. In order to have a clear understanding of the trends of foreign markets, a value chain analysis is conducted to evaluate the nature of the market. This report incorporates the use of the Pestle analysis, Swot Analysis, Porter’s five forces and the four sources of competitive advantage in its study.

According to Corset & Roy (1989) in order to counter the risks associated with investing in a new market companies are required to conduct a risk assessment and come up with an effective strategy.