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{{B}} Financial Risks{{/B}}
Several types of financial risk are encountered in international marketing; the major problems include commercial, political, and foreign exchange risk.
{{U}} (46) {{/U}}They include solvency, default, or refusal to pay bills. The major risk, however, is competition which can only be dealt with through consistently effective management and marketing.{{U}} (47) {{/U}}Such risk is encountered when a controversy arises about the quality of goods delivered, a dispute over contract terms, or any other disagreement over which payment is withheld. One company, for example, shipped several hundred tons of dehydrated potatoes to a distributor in Germany.{{U}} (48) {{/U}}The alternatives for the exporter were reducing the price, reselling, the potatoes, or shipping them home again, each involving considerable cost.
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