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Risk analysis in doing business abroad : a case study of company X

Rouwenhorst, Dion (2018) Risk analysis in doing business abroad : a case study of company X.

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Abstract:Company X has experienced tremendous growth the last years, including extension to other countries such as Kazakhstan and Turkey. Due to the favorable agriculture circumstances in Kazakhstan and Turkey there are big opportunities for Company X. However, additional risks are also the result from the country specific climates. The occurrence of such country specific risks in Kazakhstan and Turkey could have a negative impact on Company X and its objectives in those countries. Therefore, this case study research investigated the foreign risk exposure of Company X in Turkey and Kazakhstan including the political, economic and financial factors. The research question of this case study is: What is the impact of the foreign risk exposure including the political, economic and financial factors by doing business in Kazakhstan and Turkey on the firm performance of Company X and what are available options to respond and how should Company X manage them? In order to investigate the impact of the identified risk factors for Company X in Turkey and Kazakhstan, qualitative methods have been deployed. A survey has been used to ask country specific experts, interviews have been held with managers of the concerning subsidiaries and documentation review has been conducted to assess the country specific data provided by several professional organizations. The results show a clear view for both countries. The risks identified for Company X by doing business in Turkey were generally assessed as relatively high risks. The most important risk for Company X by doing business in Turkey turned out to be the depreciation of the Turkish national currency, the lira. It is recommended to accept the risk of a depreciation of the lira because the costs of managing the risk are very high while the share of the company in Turkey is not high enough yet. The identified risk factors for Company X by doing business in Kazakhstan were assessed as significantly low risks, in contrast to the risks in Turkey. The exposure of the risk factors in Kazakhstan is in general limited, most risk factors are not alarming. Although, a depreciation of the national currency, the tenge, was assessed as the most significant risk for Company X by doing business in Kazakhstan. However, the exposure of the risks for Company X is not considerable and in addition, the results of Company X in Kazakhstan show an increased tendency. Therefore it is recommended for Company X to accept all the identified risk factors, although some specific risk factors deserve close attention.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics, 85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/75530
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