Which risk is associated with expanding business operations internationally?

Expanding business operations internationally inherently introduces the risk of geopolitical conflict. Geopolitical risks can arise from various factors, including political instability, changes in government policies, or tensions between nations. These conflicts can disrupt supply chains, affect market entry strategies, and create legal or regulatory challenges for businesses operating in or with foreign markets.

For instance, a company that relies on resources or markets in a particular country may face significant disruptions if that nation shifts toward protectionism, experiences civil unrest, or is involved in international disputes. This unpredictability can necessitate changes in strategy and operations and may even impact the safety of personnel and assets.

While technological advancements, increased competition, and higher production costs are factors that can influence international business, they do not encapsulate the unique and often immediate risks presented by geopolitical conflicts. Understanding these risks is crucial for businesses looking to navigate the complexities of a global market effectively.