Discussion 3 : Global Marketing Management
TonKung
Discussion3.docDiscussion 3
"Politics, Laws, and Research" Please respond to the following:
· Watch the video titled, “Costs and revenue opportunities associated with risk in the technology industry”, (2 min 38 s) located below. You may also view the video at http://youtu.be/6la2BKzvppQ . Your textbook also discusses the threat of economic risk, financial risk, or political risk for organizations engaged in global trade. Select one (1) of these risks and discuss the scope of the threat. Next, formulate a solution that companies can utilize to neutralize the threat. Provide support for your response.
· Suggest which research data (primary or secondary) you would select to support the solution you proposed previously. Next, compare and contrast the advantages and disadvantages related to your data selection (primary or secondary). Using the research data you selected, provide support for whether you believe your solution would still work to help neutralize the threat.
Response 1 (David) :
Thanks for sharing the video. The information that Kevin and David provided was very informative. They spoke at the speed at which technology is progressing and the threats that come along with these changes. This increase creates a deeper need for privacy and security. This new risk present new challenges, but also present new opportunities for companies moving forward. Companies need to know who they’re doing business with the countries the companies are located in potential threats that may be presented.
The book mentions three types of risk when dealing with global trade. The risk that I choose is Economic risk. The country I’ve used for this example is Mexico. They currently have all three types of risk going on, but I’ll narrow it to one.
The book mentions the current climate in Mexico. The rampant violence, drug-related crimes, and comprimised government have contributed to the slow down in Mexico’s GDP.
In this case I would use both types of data. I would first start by using secondary data. I would look to countries like the Philippines and Brazil to see what methods they used to change the violent stigma of the country and regain control over its government. I would then conduct primary research from an outside non-affiliated company to determine how we can use both sets of information to neutralize future threats.
https://www.investopedia.com/articles/investing/011416/4-economic-challenges-mexico-faces-2016.asp
Response 2 (Ardecia) :
· Watch the video titled, “Costs and revenue opportunities associated with risk in the technology industry”, (2 min 38 s) located below. You may also view the video at http://youtu.be/6la2BKzvppQ . Your textbook also discusses the threat of economic risk, financial risk, or political risk for organizations engaged in global trade. Select one (1) of these risks and discuss the scope of the threat. Next, formulate a solution that companies can utilize to neutralize the threat. Provide support for your response.
Political risks are risks that affect an investment’s returns because of the political changes or the instability in a country. These changes can stem from the government, foreign policymakers, legislative bodies or military control. Although, there are limited case studies when discussing an individual nation the political risks are hard to measure. Political risks may be insured against other government bodies of international agencies. Political risks outcome can bring down the investment returns or remove the ability to withdraw capital from an investment. Some type of political risks that can affect an individual business, industries and the economy would include spending, taxes, currency valuation, regulation labor laws (minimum wage, and environmental regulations) and trade tariffs. On the other hand, regulations can be set at all levels of government, including state and local, federal, and other countries. It is imperative for marketing manager understands the political factors of a country to make informed decisions. Political risks insurance (provides financial protection to investors) can be purchased by companies that operate internationally to remove certain political risks. In doing this it will allow investors and management to focus on the business fundamentals while knowing losses from political risks or limited or avoided (which would include the act to convert currency, acts of terrorism and war).
· Suggest which research data (primary or secondary) you would select to support the solution you proposed previously. Next, compare and contrast the advantages and disadvantages related to your data selection (primary or secondary). Using the research data you selected, provide support for whether you believe your solution would still work to help neutralize the threat.
The advantage of developing markets can present a good opportunity for business growth. However; the disadvantage is that the developing markets can present greater risks than developed markets. Having assets to decline because of political turbulence can cause assets to be destroyed, decline in value, or lose value permanently. For example, if a new government came into power and decided to change regulations that would prohibit any form of Artificial Intelligence (AI) from entering the country having the political risk insurance would cover the AI company’s loss.
Businesses would be reluctant to operate in developing countries because of political instability that threatens their assets. Companies that would purchase political risk insurance would be exporter, banks, multinational corporations, and infrastructure developers. Political risk insurance can cover one or multiple countries while having lengthy terms and having a multimillion-dollar coverage amount. The primary goal would be to purchase insurance that will allow the business to lock in the insurance policy for 10 years or more with one major issuer. Business opportunities require years to carry out, so protecting your asset due to political conditions are necessary, since there is a chance of political risk happening at any given time
