What are common risks associated with operating in international markets?

Operating in international markets involves navigating a complex landscape filled with various risks. Political instability and currency fluctuation are significant concerns for businesses expanding beyond their domestic borders. Political instability can lead to sudden changes in government policies, trade regulations, or even expropriations, all of which can jeopardize a company's operations and profitability in that market. Currency fluctuation poses a financial risk, as the value of foreign currencies can change dramatically, affecting the cost of doing business and the profit margins on international sales. Companies must be prepared to manage these risks through strategies like hedging or diversifying their market presence to ensure continued success in diverse economic environments.