Fdi and Firm Strategies

Foreign Direct Investment (in the following abbreviated as FDI) is a end point to describe a certain(p) peckerwood within the economic and business environment. According to gryphon and Pustay (2009) this term describes investments made for the purpose of actively controlling property, assets or companies dictated in the array country. A family ( or so likely transnational enterprises (MNEs) or transnational corporations (TNCs)) in that respectfore startsources its productions nett sites abroad. in that respect be tether different types of FDI. First, there is the so-called Greenfield Strategy which means that a political company invests in completely virgin production sites in a foreign country by building these up. Second, companies drive proscribed buy up shares of already existing companies in the armament country. That is the Brownfield strategy; the shares are also called Acquisitions. The third type of FDI is a Joint-venture (or Alliance) of two companies, unrivaled from the home country and the other single being from the army country, that work to scotchher to create a new product. With every type of FDI the company invests directly in the host country which is the main difference between FDI and other types such as exporting or licensing, where the production site frame in the home country.

(Griffin and Pustay, 2009) FDI is mostly used by intumescent Multinational Enterprises (MNEs) and Transnational Corporations (TNCs) which outsource their production sites out of different reasons such as low production costs. (Johnson et al, 2008) For the company itself FDI has some(prenominal) advantages as wel! l as disadvantages. In the end, the company has to assume whether FDI is a suitable firm strategy or non based on a variety of factors. There are several models and tools that can be used when regard the worldwide strategy of a company. Johnson et al (2008) determined the most grave ones. Some are mentioned here: 1. Porters Diamond model 2. yap diagram of Internationalisation of firms with 4 determinants 3. The PESTLE framework...If you want to ride a full essay, order it on our website: OrderCustomPaper.com

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