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Country Analysis: Managing Risks In International Business Expansion

Name Of The Student

Department Name, Institution Affiliation

Course Number, Course Name

Instructor’s Name

Date Of Submission
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Strategies that will manage political risks in France

Walmart Company Limited intends to expand its market capacity in the republic of

France for the first time in the company’s history. Despite these strategies for implementing the

company’s global expansion vision, the management has conducted an extensive country

analysis on the political and economic state of France. This is necessary since it helps in

developing and understanding the ideology philosophy of the current state of the country before

implementing any business strategy. Fondren & E. (2021) stated that France is facing a crisis in

terms of the country's political state. Civil-political activists in the country are advocating for

international organizations (such as the United Nations) to apprehend a convention meeting to

solve the political problems in the country. Since May 10th, 2020, there has been a civil crisis

upon the exposure of one thousand military men (including 20 managerial militants formerly

retired) that signed a consensus letter that declared the nation had been taken into official

governance by the Islamist organization of France.

This would mean that France would be recognized as an Islamic state and its official

leaders would be Muslims, and hence the current government would be dissolved to form a

conventionally decreed government. Although the French government spokesman condemned

this act as a form of military injustice, Marine La Pen (France's presidential candidate) politically

gave support to this unanimous action. This state of political environment created tension and

chaos in the capital of France (i.e., Paris). France faced even more challenges with the prevailing

challenge of the Civid19 that gave the government pressure to solve political tensions as well as

the healthcare crisis. With the country’s assessment of the political state, Walmart Company may

be faced with the risk of political tension and crisis undermined by activists and civil wars with

the government.
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This state of affairs would present difficulties, particularly for new investors in the

market. To curb this challenge; several strategies must be employed to ensure that they do not

face a political risk in attempting to internationally expand. One strategy would be to integrate

the company's profile management into helping the government solve this political crisis. This

strategy would help the government to speed up and manage this crisis to attract foreign

investors that would increase the government's revenue through international taxes and levies

improvised.

Application of foreign currency derivatives

In terms of economic state and development, France has dropped its annual G.D.P by an

average of 13%. This economic state can be characterized by the healthcare crisis of the COVID-

19 pandemic and the constant civil war of the French government's attempted coup de ta in 2020.

These problems have significantly affected the country’s economic status and decreased the

country’s currency strength by 3% of its average market performance (Trivedi et al., (2021).

This constant fluctuation of the currency has prevented Walmart Company from improvising an

optional currency derivative instrument that would help in commercial business prospects.

Vlasenko & R. (2020) issued empirical evidence that new international businesses face the

challenge of downsizing their operations in the first year of market operations.

This may be caused by market fluctuation of the foreign currency that issues unexpected

financial indices of accrued financial data that sometimes may establish a financial loss. The

suggested foreign currency derivatives instrument that would be used by Walmart Company is a

foreign currency forward contract agreement. This instrument will be important since it helps in

making sure that, despite any negative currency fluctuation, the commercial order payment that

is to be made would remain as ascribed in the financial contract agreement. For example, in
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Hungary, Docler Holdings entered into a contractual agreement with Granit Plus Group Holdings

to supply marketing items and supplies. Despite Hungary undergoing stagnated economic

challenges that weakened the currency status, Docler Holdings paid off Granit Plus Group

Holdings $1 million as agreeably contracted. This exempted considerations of the weakened

currency regarding the current state of the currency at the time the contract was signed.

Other types of business risk in international business expansion

Several risks have not been covered in the previous section of Unit 1. These different

types of risks are significant in making sure that an organization works without any type of

contradictive inconveniences. Some of these risks include; operational performance of the supply

chain and new market competition within the foreign country. International business

corporations face a challenge when it comes to improving the operational performance of their

supply chains. This may be due to long international logistics management and additional

governmental levies and taxes accrued upon transportation of materials. This significantly incurs

international companies with additional accrued expenditures that are not financially proposed

by the company's budget committee (Griffiths et al., 2021). The risk of new market competition

affects international companies since some of them have not detailed out comprehensive research

on the new market competition and how they may strategies to out-weigh their competitors.
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References

Fondren, E. (2021). Media in Western and Northern Europe. Global Journalism:

Understanding World Media Systems, 135.

Vlasenko, R. The rise of populism and nationalism in Europe threatens its political stability and

security.

Trivedi, S. R. (2021). Political Stability and the Effectiveness of Currency Based Macro-

Prudential Measures. Asia-Pacific Financial Markets, 28(2), 319-332.

Griffiths, P. D. R. (2021). Challenges to Local Governance in International Business: The Risks

of Corruption. In Corporate Governance in the Knowledge Economy (pp. 141-179).

Palgrave Macmillan, Cham.

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Appendices

The following data gives illustrative information on some of the economic and political states of
the Republic of France. It gives an analysis of the current welfare state of the republic and its
condition.