Business risks to consider when considering operating globally

When considering expanding operations to other countries, one of the risks that we need to consider is Inflation. Inflation is the increase in the prices of goods and services over time. It's an economics term that means the customers need to pay more for their goods and services. Inflation reduces the purchasing power of each unit of currency.

Effects of inflation and how to fight inflation

Firstly, businesses should ensure they are regularly increasing their prices to offset the effects of inflation. I know many business owners who don’t undertake this critical activity, either because they forget or because they are worried about an imagined backlash from customers. In doing so they cost themselves tens of thousands or even hundreds of thousands of dollars in revenue over a few years. In contrast, those who implement regular, fair price increases, communicated clearly in advance of their effective date, will maintain their profitability without deterioration in customer relationships.

Secondly, business owners should make a point of offering their staff a salary increase roughly commensurate with inflation each year. In real terms this gesture costs your business nothing; in fact, if you don’t give them a salary increase you are effectively allowing inflation to take money out of their pocket, which over time may erode your employees’ job satisfaction. In contrast, research indicates that offering a small increase – even just to keep up with inflation – will generally have a positive effect on your relationship with your staff. Many economists cite this as another key benefit of controlled inflation.

How to best avoid business risk to ensure success 

The Bloomberg Risk Indicators Matrix suggested that Saudi Arabia, Ireland, Israel, Ecuador and Switzerland has the lowest inflation forecast below 0.5%. When considering expanding our operations to overseas countries, we should consider to start with these counties. We need to pay attention to Venezuela which has an inflation forecast rate of 1500%, Egypt 28.8%, Argentina 25.3%. When considering expanding operations to other countries, we should limit us from these countries to minimize our risks. 

For this task, i have visited Apple Canberra in Canberra city centre, and the product i picked was the most popular and best selling phone around the world, Apple's signature product - iPhone.

Apple first created this evolutionary phone 2007, and in 2018, Apple have released their newest model, the iPhone X Max, and the public believes that an all new iPhone will be released this year around September.  iPhone started as the first all touch screen mobile phone in the world, back in 2007, all the phones on the market had a key board, except iPhone. By 2015, nearly all the smart phones available on the market are touch screen only, it is safe to say that Apple changed the smart phone industry and have been leading the smart phone market since their first release.

All the Apple stores in the world are huge, including the one that is in Canberra, unlike other phone shops which will only have a small outlet with dead model display phones for customers to see, customers can physically try iPhones in any Apple stores around the world. The number of demonstration iPhones available in a store is more than 30 phones, that is more than enough for every customer who is interested in purchasing an iPhone to have hands on experience before their purchase. Apple also have more than 30 employees in store to assist on customers needs, including pre-sell and post-sell.

Apple also have a trade-in program, where customers can bring in their last generation iPhone to the store to trade-in for a in store credit to fund their purchase of a new generation iPhone. Since iPhone have new models release every year, this promotion is very effective in terms of entice the customers to buy their newly released product, as well as keeping the customers loyal to the company.

Apple offers discounts for University students, since we all agree that the new generation like technology more than the old generation, this promotion will help Apple to gain more market share in the tech market, as well as keeping these University students as their loyal customers for life.