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Management & Strategy



How Swedish companies are missing on lucrative international businesses due to weak and exaggerated risks analysis

Wednesday, 28 November 2012
Swedish companies dealing with international business are loosing businesses because they lack knowledge and strategy to get payments from those countries. This is because they lack a proper understanding of countries that they want to / do business with outside the EU and exaggerate the risks associated with certain countries.

According to a new report, from the Swedish Export Credit guarantee organisation (Exportkreditnämnden), Swedish export companies are unnecessarily afraid of not getting paid because they have poor eye on countries outside Europe and exaggerate the risks associated with corporations in countries that operate in these areas, a survey report show.

The Swedish companies have pretty good control of risks associated with international business in Europe, as shown by the survey. But when it comes to countries further away, the knowledge die. Companies overestimate the risks, in some cases substantially but most companies, according to the survey say that that they have little knowledge.

"Swedish companies miss export opportunities in emerging markets because they think that they are too risky. But where they considered difficult, there are often opportunities to do really good business, "said Karin Apelman, CEO of  EKN, the organization behind the survey to Swedish Business daily, Dagens Industri.

EKN has carried out a country risk analysis and rate countries of the world on a seven-point scale for the risk exporting companies could meet especially for not getting paid for their goods ordered. In Europe, corporate risk assessment by EKN is good and Swedish companies have adopted that.

But the differences are large in relation to other countries. Chile and Saudi Arabia are two countries that stand out. EKN's expert assessment of the two countries shows very good grades on their risk assessment scale. However, Swedish companies give these same countries lower rating. Indonesia, China, and Nigeria are three other countries where companies greatly exaggerate the risks associated with doing business there.

Export Credit guarantee organisation (Exportkreditnämnden) EKN is a Swedish government establishment commissioned  to promote Swedish exports and the internationalisation of Swedish companies. The say that they do so by insuring export companies and banks against the risk of non-payment in export transactions, thereby enabling them to conduct more secure export transactions. Their website is here
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