Market Potential Indicator

In today’s global marketplace, doing business abroad has become as common as getting dressed each day. Technology has bridged the gap for entrepreneurs and corporate visionaries to expand into global markets with ease. Extensive risk analysis and market research must be communicated effectively to enable strategic financial steps that maximize shareholder equity and minimize company risk and exposure to be exercised. This paper will identify and discuss various factors that will impact global finance over the next 10 years

Expanding globally is a great opportunity for American business owners to increase profits and growth within their company. Going global offers businesses the opportunity to experience the benefits of reducing dependency on a single market, while gaining market share in a foreign market. At this time, only about 10% of American business owner’s are involved in exporting their products to other countries. Although there are great opportunities in global expansion, careful consideration must be given before committing to an expansion of this magnitude. Expanding into a foreign country can be difficult because of cultural diversities and practices, regulation, consumer behavior, economic stability, and many other reasons. In order to properly evaluate the markets in other countries an in

The economic freedom is measured on 10 variables: Business Freedom, Trade Freedom, Fiscal Freedom, Government

Today, firms have to deal with a global marketplace; marketers have no other choice. Participation in global marketing has begun to shift from a mere “option” to an imperative. The world is becoming more homogeneous. Distinctions between national markets

However, the investment was not without risks. There are four types of risks in international business called cross-culture risk, country risk, currency risk and commercial risk. Cross-cultural risk refers to a situation or event where a cultural miscommunication puts some human value at stake. Country risk describes the potentially adverse effects on company operations and profitability holes by developments in the political, legal, and economic environment in a foreign country. Currency risk is the risk of adverse unexpected fluctuations in exchange rates. Commercial risk refers to potential loss or failure from poorly developed or executed business strategies, tactics, or procedures (Boter & Wincent, 2010). Investment in Rulmenti Grei, Timken might face the salient risks of political and economic instability. Romania’s economic growth was slower, inflation was higher, and the labor force was more volatile. Furthermore, there might be a risk of re-nationalization. It is said that economic risk analysis tells corporate leaders the ability of a particular country to pay its debt while political risk analysis tells them whether that country will pay its debt. Political risk measures the stability of individual countries through the

started to plummet as the economy has begun this recession. It may seem as if the country that

The level of economic freedom varies greatly throughout the many countries as well as economies of the world, yet the disparities found within Middle Eastern nations are amongst the most unique. Economic freedom is a crucial aspect of any country as it not only affects the government, but also the lives of every individual in multiple ways. The result is higher income homes, a decrease in poverty and increase in job opportunities, as well as many more great benefits. Since it is viewed as containing some of the lowest economic freedoms, it is important for the people and the government of the Middle East to prioritize their quality of life, as it is directly associated with their economy. Rwanda is a powerful example as it

China is out ahead with 29.12% followed by Japan at 19.67, with America sitting quite far back at 3.55%.

Financial Times reports the performance of global indices - S&P for Americas, FTST Eurofirst 300 for Europe and Nikkei 225 for Asia-Pacific region, plus, the Nikkei 225 is comprised of 225 stocks that are selected from the Japanese common stocks in the first section ranked by trading volume of the Tokyo Stock Exchange (Nikkei indexes, 2014). Therefore, the Nikkei 255 is considered to be a good proxy of the Japanese market capitalization ( Ugbede, Lizam, Kaseri & Idachaba, 2013).

Country risk refers to the risk that would either positively or negatively affect the future prospect of a given investment, depend on the possibility of occurrence of the political events (Bouchet et al, 2003). The upcoming in-out referendum on the UK’s membership of the European Union (EU) has caught the attention of people around the world. A number of debates about the UK should remain in or leave the EU has been held. Undoubtedly, the upcoming referendum could bring country risk exposure, particularly country-specific economic risk. It is impossible to know the exact answer before the referendum. However, the trade-off that the UK would face would be the same regardless of it is inside or outside the EU (Dhingra and Sampson, 2016).

Economic freedom is the ability for an individual to prosper with minimal intervention from government. In an economically free society, individuals are empowered to succeed or fail based on their own individual abilities. Higher levels of economic freedom lead to higher levels of economic growth and income. The level of economic freedom varies among different regions and countries across the globe. Thus, levels of prosperity and wealth also vary widely across the globe. The Heritage Foundation, in cooperation with The Wall Street Journal, researches several factors to measure economic freedom across the globe. The Foundation issues the results of their research in the Index of Economic Freedom. The Foundation

Comprises of relevant new global markets, existing ones that are changing, important international political events, and critical cultural and institutional characteristics of global markets.

A risk analysis is a compilation of detailed factors weaved together to determine the likelihood of success or failure for a project, goal, or investment. Businesses use these to determine the viability or feasibility of a new product, initiative, or opening into a new market segment. A country risk analysis is simply the extension of a risk analysis to include an entire country. In essence, a country risk analysis is a tool used to identify the risks associated with opening a business, creating trade agreements, or investing in a country. A country risk analysis is very important because it takes into account many factors including the current and past political climate, economic risk, geography and climate risks, cultures, and laws pertaining to the country being analyzed. Often, countries are given a grade to enable a quick comparison to how risky investing in one country is compared to another country.

Diversification is a method of investing that been shown to increase portfolio return while reducing portfolio risk as measured by standard deviation. This method specifically increases the efficient frontier for investors. The challenge to an investing firm is an appetite by its customers for an ever increasing efficient frontier. One area to explore to obtain this increase is through further diversifying through international diversification.

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.