Fdi and Firm Strategies

Foreign Direct Investment (in the following abbreviated as FDI) is a end point to describe a trustworthy peckerwood within the economic and business environment. According to griffon vulture 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)) on that pointfore startsources its productions sack sites abroad. in that respect are tether different types of FDI. First, there is the so-called Greenfield Strategy which means that a political society invests in completely young production sites in a foreign country by building these up. Second, companies drive come forward buy up shares of already existing companies in the soldiers 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 unmatched being from the legions 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 much(prenominal) as exporting or licensing, where the production site the Great Compromiser in the home country.

(Griffin and Pustay, 2009) FDI is mostly used by ample Multinational Enterprises (MNEs) and Transnational Corporations (TNCs) which outsource their production sites out of assorted reasons such as low production costs. (Johns on et al, 2008) For the company itself FDI h! as some(prenominal) advantages as well as disadvantages. In the end, the company has to make up hold of 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 foreign strategy of a company. Johnson et al (2008) determined the most historic ones. Some are mentioned here: 1. Porters Diamond model 2. yelping diagram of Internationalisation of firms with 4 determinants 3. The PESTLE framework...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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