Global Business Risk Evaluation

The idea of this paper is to evaluate the risk of doing business internationally, and the PESTEL analysis has been utilized to accomplish so. The company that plans to invest in the Rwandan special economic zone, which provides several benefits such as lenient and streamlined economic laws for business establishment, is C&H Garment (Ballestas et al., 2015). Rwanda is a small area in South Africa that has been designated as a special economic zone. This framework is used to estimate the risk of starting a new firm in a Rwandan Special Economic Zone.

Analysis

While starting a new company in Rwanda’s special economic zone, the risk assessment can be conducted based on several variables that could affect the organization’s system. A firm should have a lower risk percentage, so it is imperative to do a risk assessment to reduce the likelihood of risk in a newly managed organization. Here, the Rwanda Special Economic Zone’s PESTEL study can be used to analyse risk (Nduwayezu et al., 2014). Below are the factors:

• Political: Rwanda has an uncertain political history and has spent the last many years working to improve its economy. They are driven to eradicate poverty and drive out those who oppose them. Rwanda is still regarded as a low-income country; therefore, political factors affect its economy. Given that Rwanda’s political landscape is shaped by its production of foreign exchange, C&H Garment may be exposed to significant risk in the architectural development of their company (Moses and Etuk, 2015).
• Economic: In general, Rwanda’s economy is now rather stable; in previous decades, it suffered from the civil war and genocide, but with the establishment of the Special Economic Zone (SEZ), it has grown by 8%. Foreign investment is concentrated on the country’s tea, coffee, and tourism industries. Exchange rate fluctuations may raise the risk to C&H apparel’s economic expansion.
• Social: The orthodox mindset is the foundation of Rwanda’s social background. Rwandans live mostly in rural areas, where women make up 52% of the population. Because of the traditional way of life and the fact that 45% of the population lives below the poverty line, C&H Garment may run the danger of creating new clothing that the locals may not find appealing.
• Technological: The SEZ already has many businesses that use the newest technology to ensure their operations run smoothly. To install the newest technology in their workplace, C&H must generate more revenue. Organizations that wish to invest in technology and equipment run the danger of losing investors, which could influence the organization’s entire structure (Kateera et al., 2015). Employee training and development programs should be offered if the industry has changed and more sophisticated technologies have entered the market. This is because such activities run the danger of mismanaging C&H’s economy.
• Environmental: Since the materials found in the environment are sufficient to construct a corporate structure, Rwanda’s environment may be valuable to the firm. However, the primary issue is Rwanda’s population, which is expanding at the expense of non-renewable resources like land and water. Due to Rwandans’ consumption of non-renewable resources, C&H may be at risk for biodiversity loss, soil erosion, and land degradation. Rwanda’s climate is subject to sudden shifts; organizations must anticipate future changes and assess the risk of maintaining their current system.
• Legal: Foreign investors adhere closely to the laws governing international commerce. According to Rosa et al. (2014), the organization must maintain its system in accordance with all trade laws and regulations enforced by the Rwandan government. The Trade Act of 1999 carries over the Rwanda Special Economic Zone. The company runs the risk of adjusting in accordance with the government’s ability to alter the formats of operations.

Conclusion

The risk analysis in this case has been conducted using the different PESTEL analysis elements. It is determined that risk analysis is necessary prior to establishing a business in an economic zone. The organization has a great deal of exposure in the Rwanda special economic zone.

References

• Ballestas, J.D. and et.al., 2015. Accuracy of a Statistical Risk Assessment Model in Predicting Shoulder Dystocia and Brachial Plexus Injury in a High-Risk Population at Einstein Medical Centre, Philadelphia [133]. Obstetrics & Gynaecology. 125. pp.47S-48S.
• Nduwayezu, E. and et.al., 2014, May. Some aspects of risks and natural hazards in the rainfall variability space of Rwanda. In EGU general assembly conference abstracts (Vol. 16, p. 14468).
• Moses, E.A. and Etuk, B.A., 2015. Human Health Risk Assessment of Trace metals in Water from Qua Iboe River Estuary, Ibeno, Nigeria. Journal of Environmental and Occupational Science. 4(3). pp.150-157.
• Kateera, F. and et.al., 2015. Hepatitis B and C seroprevalence among health care workers in a tertiary hospital in Rwanda. Transactions of The Royal Society of Tropical Medicine and Hygiene, 109(3). pp. 203-208.
• Rosa, G. and et.al., 2014. Assessing the impact of water filters and improved cook stoves on drinking water quality and household air pollution: A randomised controlled trial in Rwanda. PLoS One. 9(3).  p.e91011.