Answer to Question #136485 in Management for Snow Purple

Question

The Scenario:One of your friends plans to return to the family alfalfa farm in central California after college and has an idea to export a compressed form of alfalfa (alfalfa pellets) to be used as high-quality animal feed. Your friend knows that you are studying international business and has asked you for guidance. Prepare a summary for your friend of the issues that need to be considered.

Answer 1

In such a scenario, there are several issues to be considered that pertain to International business. For instance:

• The political stability of countries that the alfalfa pellets are to be exported. Besides, the rules and regulations set to govern international trade in this aspect shall also be considered.
• Consideration of the exchange rate of other countries to which the compressed form of alfalfa is to be exported. In considering the exchange rate, it is vital to research the monetary policies of specific countries that the alfalfa pellets are to be exported.
• Consideration of the risk exposure of exporting the alfalfa pellets into other countries. In international business, risk exposure and hedging are crucial as they determine if the business will incur losses or profits.
• Consideration of taxation rules of the countries the alfalfa pellets are to be exported.