Country Risk is the risks that can come from doing business in a specific cou...
At one point, Duracell International confirmed that it was planning to open battery manufacturing plants in China and India. Manufacturing in these countries allows Duracell to avoid import duties of between 30 and 35 percent that have made alkaline batteries prohibitively expensive for some consumers.1. What additional advantages might Duracell see in this proposal?2. What are some of the risks to Duracell?static/image/hrline/1.gif
This strategic move will help Duracell have their products sold directly in the Indian and Chinese market and also use the cheap labor force available in these economies. They can avoid the duties in this way. But the challenge in management, political influences, high level of taxes paid to the government. Management and monitoring in a culturally different setting could require strategic planning and action.
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Country Risk:Country Risk is the risks that can come from doing business in a specific country. This risk comes from several different areas, including economic, political, foreign exchange, and technology issues.
Answer and Explanation:1. Some other advantages that Duracell may have from this proposal are lower employee costs by using a lower cost level of employee in China and India. In addition, some parts of the supply chain may come from India and China, so this could reduce the amount of costs for transportation of components that are used to create Duracell's products such as batteries.2. Some risks that could exist from opening a manufacturing plant in India and China include the lack of oversight since the plants are further away. In addition, there could be country risk from the governments and other risks in each of the countries of India and China.
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