Title: Risk assessment in the selection of countries for market entry

Authors: Don McCarren; Jack T. McCann

Addresses: School of Business, Lincoln Memorial University, Room 132 Business and Education Building, 6965 Cumberland Gap Parkway, Harrogate, TN 37752, USA ' School of Business, Lincoln Memorial University, Room 106 Business and Education Building, 6965 Cumberland Gap Parkway, Harrogate, TN 37752, USA

Abstract: Assessment of corporate strategic risk is difficult and very complex. Therefore, it is not uncommon that gross assessments are made in lieu of utilising a methodology to define risk and its degree of acceptability, especially when selecting a country for market entry. It is the objective of this paper to present a methodology which incorporates a quantifiable approach to risk assessment. It is based on conducting a thorough evaluation of the cultural, political and economic factors as well as other relevant criteria and prioritising their degree of importance and relative risk thereby generating a numerical score which is then compared with the scores of two alternative country choices. This simple tool aids in the decision making process but is dependent on the arbitrary values assigned to each pivotal criteria. The last section of the paper offers guidance on the organisational issues arising from the process of implementation of an emerging market strategy.

Keywords: risk factors; risk assessment; country selection criteria; organisational issues; market entry; corporate strategic risk; emerging markets; decision making; political factors; cultural factors; economic factors; politics; culture; economics.

DOI: 10.1504/IJBG.2013.052989

International Journal of Business and Globalisation, 2013 Vol.10 No.3, pp.293 - 308

Published online: 29 Mar 2013 *

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