Presentation of Business Environment Analysis dealing with country risk top 5 companies of hospitality sector

1. Assessing and Dealing
with Country Risk
Presented By –
Rupesh (2202044)
Sahil (2202046)
Saurav(2202069)
Sachin(2202067)

2. Country Risk
Country risk refers to the uncertainty associated with investing in a particular
country, and more specifically the degree to which that uncertainty could lead to
losses for investors. This uncertainty can come from any number of factors
including political, economic, exchange-rate, or technological influences. In
particular, country risk denotes the risk that a foreign government will default on its
bonds or other financial commitments increasing transfer risk . In a broader sense,
country risk is the degree to which political and economic unrest affect the
securities of issuers doing business in a particular country.
Key Takeaways
 Country risk refers to the uncertainty inherent with investing within a given
country.
 Country risk most often refers to the possibility of default on locally issued
bonds.
 The United States is considered the benchmark for low country risk.
 Analysts may refer to MSCI Indexes or rating-agency reports for help in
analysing country risk.

3. Different Types of Country Risk
Country risk assessments are generally segregated into different categories,
which take a closer look at some of the factors we mentioned prior.
 Political risk
Political risk determines a country's political stability, either internally or
externally. For instance, a recent military coup would increase a nation's
internal political risk for businesses as rules and regulations suddenly shift.
Other risks in this category could include war, terrorism, corruption and
excessive bureaucracy.
Political risk can affect a country's attitude to meeting its debt obligations
and may cause sudden changes in the foreign exchange market.
 War and Terrorism
Many times countries don’t have cordial relationship with their neighbouring
countries and they remain always on the brink of the war. Presence of
Terrorism in the host country also put the safety of employees in danger.

4.  Actions of Host Government
Sometimes host government impose extra corporate laws, strict operational standards, and
have weak business legal system that affects the functioning of subsidiary firm.
 Currency Inconvertibility
Some government don’t allow their home currency to be exchanged into other currencies.
Then the revenue generated by Foreign subsidiaries can’t be remitted to parent companies.
Under such conditions, parent companies have to exchange the currency for goods to
extract benefits from operations of their subsidiaries in foreign countries.
 Corruption
High level of corruption adversely hit the business of MNC’s. It increase their cost of
operating the business as well as reduce the profitability.

5. Economic risk
Economic risk encompasses a wide range of potential issues that could
lead a country to renege on its external debts or that may cause other
types of currency crisis (i.e. recession). A major factor here is economic
growth – the health of a nation's GDP and the outlook for its future. For
instance, if a country relies on a few key exports and the prices for these
are dropping, this creates a negative outlook and may increase the
economic risk for foreign trading partners.
Acts of government may also impact economic risk, such as
intervention in the money market or policy changes that cause tax
instability. One other factor is issues with foreign currency exchange,
for instance a shortage in certain currencies or a devaluation of the
exchange rate.

6.  Exchange Rate Risk
High exchange rate will make the export product expensive. It increases the sale of
imported products. The demand of companies product in foreign become less as they
become less competitive. It reduce the production level in the country.
 Inflation Rate Risk
High inflation decreases the purchasing power of the customers and their demand for
products pf MNC’s.
 Interest Rate Risk
High interest rate leads to decrease the borrowing capacity at high interest rate. It
decreases the economic growth of country and hit the profitability of foreign
companies.

7.  Subjective risk
Subjective risk is not a term that is used everywhere, but it
measures factors that are common to most risk assessments –
and could greatly impact foreign business owners trading with a
host nation. Subjective risk is about attitudes, and can include
social pressures and consumer opinions – whether to certain
types of goods or certain types of enterprise.
 Country’s attitude towards the enterprise
 Social pressure
 Attitude of Consumers
 Risk of currency devaluation

9. Measuring Country Risk
 Macro-assessment of country risk:
overall risk assessment of a country
 Micro-assessment of country risk:
involves assessment of a country as it relates to
the MNC’s type of business.

10. Techniques to Assess Country Risk
 Checklist approach: ratings assigned to various factors

11.  Delphi technique: collection of independent opinions without group
discussion

12.  Quantitative analysis: use of models such as regression analysis

13.  Inspection visits: Meetings with government officials,
business executives, and consumers to clarify risk.

14.  Combination of techniques: many MNCs have no formal
method but use a combination of methods.

15. Top 5 Companies of Hospitality Sector

16. INDIAN HOTELS COMPANY LIMITED
• Industry- Hospitality
• Parent- Tata Group
• Founded- 1899, 123 years ago
• Founder- Jamsetji Tata
• Headquarter- Mumbai, Maharashtra,
India
• Chairman- N Chandrasekaran
• MD & CEO- Puneet Chhatwal
• Products- Hotels, Resorts
• Website- ihcltata.com

17. CHALET HOTELS LTD
Headquarters- Raheja Tower, Plot No. C-30, Block G,
City: Mumbai India
Founded- 1986
WEBSITE- www.Chalethotels.com
Parent : K Raheja Corp Private Limited group
Unlisted group and one of India's leading and most
trusted real estate developers offering excellent
Residential, Commercial, Retail and Hospitality
projects.
The Promoters include Mr. Ravi C. Raheja and Mr. Neel
C. Raheja
who have been instrumental in the growth of business
and actively advise the company on finance

18. Lemon Tree Hotels
 Headquarter: New Delhi
 Founded: 2002
 Founder: Patanjali ( Patu) G Keswani
 Subsidiaries: Manakin Resorts Pvt. Ltd, Red Fox
Hotel Company pvt. Ltd, Carnation Hotels Pvt.
Ltd
 Industry: hospitality
 Website: lemontreehotels.com
It owns and operates 84 hotels with a total of
8300 rooms in 52 cities across India.

19. EAST INDIAN HOTELS LIMITED
 Headquarters: India
 Founded: 1949
 Subsidiaries:Mumtaz Hotels Limited, Mashobra Resort
Limited
 WEBSITE: www.eihltd.com
 Founder: Mr. Rai Bahadur Mohan Singh Oberoi
 Parent: Oberoi group
 Chairman :Arjun Singh Oberoi

20. Barbeque Nation Hospitality limited
 Parent organization: Sayaji Hotels
 Subsidiaries: Barbeque Nation (Malaysia), Red Apple Kitchen
Consultancy Private Limited
 Founded: 2006
 Founder : Sajid Dhanani
 Ceo: Rahul Agrawal
 Promoters :Sayaji Housekeeping Service, Qayyum Dhanani, Rauf
Dhanani and Suchitra Dhanani. All of them together hold
60.2%stake in the company.
 Headquarters: India
 Number of employees: 6,878 (2022)
 We currently own and operate around 200 outlets in 82 cities in
India, 4 outlets in UAE, 1 outlet in Malaysia and 1 outlet in Oman.