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
Risk assessment in the selection of countries for market entry
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.