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Country Risk Analysis Japan

2685 words - 11 pages

There is a certain level of risk for any company associated with globalization. While globalization provides many benefits there are many risks as well. Proper research will assist a business's desires to go global but a solid international marketing plan and a sound relationship with the business members of the foreign country will provide the best outcome for the companies involved. The governmental bodies of countries reign on the decisions of the businesses therefore, that factor is a high risk for any company looking to go global. In this paper Aluminum USA will perform an in-depth risk analysis considering conducting business in Japan.Potential and Foreign Trade and InvestmentThe basic need potential for Aluminum U.S.A means growth for a domestic company to enter the realm of globalization. Aluminum USA is considering merging into the Japan's already successful automobile industry. The potential of this merger is to increase capital for both Aluminum USA and Japanese automobile industry. The reason most domestic and foreign companies look into mergers, such as the one between the Japanese automobile industry and Aluminum USA, because expansion into other countries brings potential profit and increasing public awareness to consumers of the company.Foreign trade and investment are never completely easy tasks but if a risk analysis is done properly prior to conducting business there is a greater chance for success. Japan and Aluminum U.S.A have much promise as a strong team in the automotive industry and should continue with their merger to enhance each others companies further. "Global strategic partnerships (GSPs) are frequently used to refer to linkages between companies from different countries to jointly pursue a common goal". (Green et al, 2005) Since both companies need have a same common interest the merger they desire makes for a strong business relationship.Economic and Financial ForcesAnalysis of the economic and financial forces and landscape of Japan will provide Aluminum USA the information needed to operate most efficiently within the region. Economic Planning Agency reports the nation's economic indicators. They have the responsibility of running the Japanese economy on a day to day basis. This organization is a branch of the Prime Minister's Office who is also responsible for the long-term planning of the economy. The Japanese are known for their striking self-discipline, especially in business dealings between the government and authorities. Conversely, the government has a robust understanding of the roles, needs and problems of the business. Long term economic planning is extremely important in the role of the Japanese economy and plays a major role in its success. (Japan, 2007)The balance of payments identifies and documents how a country's currency is available to visitors and foreigners. The merchandise trade balance being the largest component of the surplus in Japan. In 2004, the current account surplus increased to...

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