The risks that the domestic firms face while doing business
internationally is :
Political risks : These risks are faced by the firms, due to
the differences in the political structure of the country in which
they are expanding business internationally. The differences in the
policies ,difference corporate governance practices and the
different in the tax structure and the regulations imposed on the
companies expanding internationally.
Cultural risk : This risk is due to the difference in the
cultures of the different countries. Sometimes, company have to
adapt itself to the local culture and the local tastes of the
people in order to survive expanding its operations
internationally.
Economic risks: is the risk of the changing exchange rates
which affects the operations of the company doing business within a
country. The different economic conditions and policies . The
economies of different countries are unpredictable that is why
economic risk presents some set of challenges for the firm
expanding internationally.