The rewards from international expansion for Chinese companies are potentially high. so are the risks.
No opportunity exists without risk. Markets may fail to deliver growth. Supply chains may break. Missteps may damage your reputation. Risk is unavoidable, but when threats are understood and quantified they can be managed, giving you an advantage against less well-prepared competitors.
PUTTING RISK ON THE MAP
In the world’s most developed markets information is readily available and instruments exist for hedging risk or insuring against it. In less developed markets information is scarce and difficult to trust. Even where risks are clearly understood, it can be hard to decide how to manage them. The options available for mitigating threats are absent or costly. Yet these markets offer some of the most attractive opportunities to Chinese companies.
In these circumstances it is critical to have not just a qualitative view of the threats, but a quantitative measure of their potential impact on investment returns.
KNOWLEDGE VERSUS RISK
Risk analysis is a central component of the Going Global initiative. Our capacity to understand your business and our knowledge of world markets means we can assess the unique risk profile of your overseas venture. The tailored risk assessment we provide for you is supported both by bespoke research reflecting your concerns and by the standardised risk analysis we carry out on a routine basis. This covers the full range of potential threats to business operations, from the currency, sovereign and banking risks to financial flows to the political and social threats to personnel, infrastructure and supply chains.
This covers the full range of potential threats to business operations, from the currency, sovereign and banking risks to financial flows to the political and social threats to personnel, infrastructure and supply chains.
Access to The Economist Intelligence Unit’s detailed rankings of cross-country risk gives Chinese companies a window into many areas that may affect strategy, including security threats, political stability and tax policies.
Our experience suggests that risk is most effectively assessed by combining quantitative and qualitative techniques. Our risk models, both off-the-shelf and bespoke, use proven methodologies to provide a standardised threat assessment comparable across markets and ready-made for your internal asset allocation processes. Our network of market analysts and on-the-ground contributors gives a qualitative view of potential threats and identifies effective mitigating strategies.
TAILOR YOUR APPROACH
With Going Global you can build a risk model that can be aligned to your specific operations. A risk model tailored for a labour-intensive manufacturing company, for example, might emphasise risks associated with strikes and trade union influence, while a financial services organisation might be more concerned with capital flows and currency risk.
WORKING WITH GOING GLOBAL HELPS TO TAKE THE GUESSWORK OUT OF RISK AND ENABLES YOU TO ENTER A NEW MARKET WITH GREATER AWARENESS OF POTENTIAL OBSTACLES, PROOFING YOUR BUSINESS PLAN AGAINST ADVERSE DEVELOPMENTS.
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