Finance Essay Example | Topics and Well Written Essays - 1000 words - 2

Finance - Essay Example The business organisations in order to expand on both its sales and revenue paradigms focus on expanding into international territories where they would be able to get hold of newer markets and newer customer segments. Body This process of international expansion is made possible by the business corporations depending on certain premises like conducting trades related to exporting of commodities to foreign nations, through rendering investment in business units created in foreign territories, opening up of new production units in the foreign locations. Further the business corporations can also move to conduct business in international areas through the creation of contracts with support firms to gain both managerial and technical expertise. Finally the business houses can also go for selling intangible assets like trademarks and patent rights through effective licensing schemes or can also expand into foreign territories by working on franchising activities. The method of exporting used by business to probe into international markets helps to gain wider recognition in such areas at reduced cost.Business corporations can focus on gaining control over foreign firms through the rendering of high amount of investments in such. Business organizations by focusing on opening up newer production zones help in generating economies of scale . These external business units can work on getting cheap local labour and also get a better understanding of the foreign markets and business territories. The method of forming external business contracts with firms located in foreign soil helps in outsourcing business expertise to these areas in return for an appropriate fee structure. Through licensing activities the business organisations can also gain more revenues and stake in foreign firms by selling knowledge assets top foreign firms. Finally through the franchising activities the business corporations can gain enhanced access to foreign markets where the cost of investments and risks involved is low (Global Business Strategy, 2001). Conclusion The above context describes the different methods which the business corporations can take to expand its business in international markets. Such activities reflect both cost intensive and market expansion strategies which helps the business corporations to enhance both their revenue and market structures. 2 Discuss the different types of risk that can impact upon an organization trading on an international basis. Introduction The potential business risks which the business organisations face while doing business in international markets are related to the transportation of commodities in international zones, risks pertaining to commercial activities, the large amount of political risks pertaining to the different international zones, other risks relating to the financial and economic conditions and other risks owing to the emergence of adverse business conditions. Body The first risk involved relates to the damag e to the products involved owing to improper transportation which amounts to breakage and spoilage of the goods involved. Again risks arise from the product interface owing to unavailability of the right amount of payment. Product risks are also involved owing to faulty manufacturing practices wherein production of faulty products leads to loss of business by the seller. The segment pertaining to commercial risks reflect that insolvency position of the buying community leads to loss