Explain each of the four means of incorporating risk into ...

[xroflmao]

Explain each of the four means of incorporating risk into business strategies when companies employ an adaptation strategy.
 
  What will be an ideal response?

Question 2

When using the process of gradual elimination to screen potential country markets, a researcher should first, ________.
 
  A) delve into specific information
  B) obtain general information on macro-level indicators like population
  C) employ specific indicators, such as import statistics
  D) narrow down the choices with specific indicators, such as economic growth

[lin77x]

Answer to Question 1

Adaptation means incorporating risk into business strategies, often with the help of local officials. Companies can incorporate risk by means of four strategies:
1. Partnerships help companies leverage expansion plans. They can be informal arrangements or include joint ventures, strategic alliances, and cross-holdings of company stock. Partnering helps a company to share the risk of loss, which is especially important in emerging markets. If partners own shares (equity) in local operations, they get cuts of the profits; if they loan cash (debt), they receive interest. Local partners who can help keep political forces from interrupting operations include firms, trade unions, financial institutions, and government agencies.
2. Localization entails modifying operations, the product mix, or some other business elementeven the company nameto suit local tastes and culture.
3. Development assistance lets an international business assist the host country or region in improving the quality of life for locals. For example, by helping to develop distribution and communications networks, both a company and a nation benefit.
4. Insurance against political risk can be essential to companies entering risky business environments. The Overseas Private Investment Corporation insures U.S. companies that invest abroad against loss and can provide project financing. Some policies protect companies when local governments restrict the convertibility of local money into home-country currency, while others insure against losses created by violent events, including war and terrorism. The Foreign Credit Insurance Association also insures U.S. exporters against loss due to a variety of causes.

Answer to Question 2

B