Companies: Economics and Basic Macro Data Essay

Submitted By blevinski
Words: 409
Pages: 2

Economic issues must also be considered. Companies must realize that basic macro data, i.e. GDP/GNP, should be weighed lightly as most of this data will be government controlled and fails to accurately evaluate the market. This means that in order to get a true evaluation of the economy the company is going to have to visit the marketplace for themselves. Key issues should include: ownership of natural resources, food production, workforce skills, unemployment rate, amount of foreign debt, stability of the currency, trade policy and associations, ease of acquiring capital, tax laws, and repatriation laws. Particularly companies must realize that capitalism exists in a different capacity outside of the US, and that the state will play a much larger role in the economy of the country than most executives will be accustomed to. Another concern to take note of is that many foreign economies are driven by powerful families which dominate the country both economically and politically. These risks should the organized into a risk factor matrix. This matrix will include a list of risk factors which are evaluated on a scale of 1-5 on two different criteria: the degree of risk, and its relative importance. This risk matrix gives companies a tool by which to evaluate countries as a whole, which can be used to evaluate each country in a side by side comparison and allows a detailed compare and contrast. By comparing each suspect country in this manner a company can see exactly how the countries rate against each other and gives an idea of which countries will be the most feasible to enter. In order to…