More and more businesses are realizing greater profit potential by selling their

Question

More and more businesses are realizing greater profit potential by selling their products and services in other countries on an international scale. However, there are challenges that businesses face when exposed to foreign exchange risk in addition to standard business and financial risk. Identify two United States companies that have entered the international arena and report their success of failures in offering their products to the international market. What financial risks, if any, have they incurred throughout the process. Your anwser must be atleast 150 words in length.

Explanation / Answer

The two United States companies that have overseas sales are Apple and Wal-Mart. Apple has its loyal customer base throughout the world and has been very successful in selling its products. There are challenges in the business environment in different parts of the world and the ease of doing business is especially difficult in emerging markets like India and China. A critical aspect for Apple is pricing its products so that customers in these markets are attracted to it and this has its own risk. Apple has overcome this difficulty and has made good profit margin in almost all countries it entered. However there are still some challenges in business environment when it came to China.

On the other hand retailers like Wal-Mart have been unsuccessful in selling the products with American vision in emerging markets like India. Wal-Mart entered India through a joint business venture with Bharti (an Indian company) and has been largely unsuccessful in tapping the Indian markets because it lacks in understanding legal and cultural environment in India

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