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What could be the hidden risks of entering a new market?

Dr. Bijan Khajehpour

30 Sep 2019 | Strategy & Risk


“There are a number of hidden risks that companies sometimes don’t pay attention to and it’s important to understand them. 

One group of such risks are reputational risks. So, what happens is, you may as a company enter a new market and you may suddenly experience a public opinion backlash. To give you a current example, look at the backlash at those companies who are selling weapons to countries that are attacking Yemen right now. They say this is a humanitarian crisis and whoever is selling weapons to that war is going to experience a backlash in public opinion. 

Other hidden risks are if you as a company are active or trying to enter a new market but that market, the government of that market, rejects you because you’re active in a third country. For example, a lot of Islamic countries have rejected companies who are very active in Israel as part of their political decision process.

So it’s important to understand all of these hidden reputational, sometimes political, risks and address them. How do we address them as a company? 

  1. The very first step is to have a clear and streamlined communication about the decision to go into a market. You may admit very openly that you are active in another market that the new market considers critically. But explain why you are there and what you are doing there, that there is no political agenda in your decision. 
  2. You will have to engage the media both in your own country, but also in the target country. 
  3. And you may have to engage financial authorities to explain why you are in a specific market. 

So all of these come down to what we call a communication strategy. And for a communication strategy, it’s important to have a clear message, to have a consistent message that’s why, for example, we would develop a set of questions and answers to make sure that all the questions are answered in the same way by all the different decision-makers or representatives of the company. It would mean that you may have to have a PR representative or a PR official. So it’s important to understand how significant the communication strategy is in mitigating these hidden and sometimes reputational risks in entering a new market.”

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Strategy & Risk

To capitalize on new opportunities, a strong strategy needs to keep pace with rapid change while navigating risk with foresight and confidence.

Dr. Bijan Khajehpour | Managing Partner

Bijan is a veteran strategy advisor for the West Asian markets and has over 25 years of strategic consulting experience with global companies. Read more

Dr. Bijan Khajehpour Bijan is a veteran strategy advisor for the West Asian markets and has over 25 years of strategic consulting experience with global companiesRead more

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