Explain problem areas that businesses need to examine when planning to do business in another country.

In addition to political risks, international business
also presents many other problems that have to be taken care of by
businesses.

One of these is financial risk. This includes a
change in profitability due to changes in exchange rate when funds are being invested
abroad and when it is time to repatriate profits. In addition, companies have to closely
consider the economic growth of the country and make realistic predictions about the
changes that can be expected in consumption patterns both in terms of the quantity
consumed as well as a shift in the type of goods
consumed.

Before entering a new country a company has to
understand the factors that would influence its operations there. This includes dealing
with a new socio-cultural environment. The labor practices differ between countries and
if a company tries to implement policies alien to ones that prevail in the country it is
entering, it will not be able to operate at optimal
levels.

In several countries, there could be a bias against
the nationality of the owners of the company or against their religious beliefs. If
these cannot be taken care of by using a reasonable amount of resources, there may be a
need to reconsider plans to start operations there.

The
legal framework in the country that the company is making an entry should also be
considered closely. If a country does not have laws that provide adequate security
against piracy, safeguarding proprietary information, etc., and the system is too slow
when it comes to trying to enforce agreements it could result in serious
problems.