There are benefits to exporting, but what are the risks?
Expanding business outside of U.S. markets involves many risks, although these risks can be reduced through careful research and business practices. Although many foreign nations are politically stable, trading beyond the domestic marketplace carries some political risk. Unfortunately, companies have little or no control over political upheavals abroad, effects of which could range from economic sanctions to the physical dangers of outright war. Firms dealing with developing nations with a volatile history must be especially ready to change directions quickly as situations dictate. Yet even politically stable nations can pose problems to exporters, especially regarding currency fluctuations. In currency situations, a firm has to be aware that changes in third-party competitors’ currency valuations can affect one’s own sales. However, while foreign market volatility creates economic risks, it can also produce significant profits and financial advantages. Close monitoring and flexibility
