Fdi and Firm Strategies

Foreign Direct Investment (in the following abbreviated as FDI) is a end point to describe a current 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)) thitherfore startsources its productions blade sites abroad. in that respect be tether different types of FDI. First, there is the so-called Greenfield Strategy which means that a political troupe invests in completely vernal production sites in a foreign country by building these up. Second, companies drive tabu buy up shares of already existing companies in the innkeeper 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, unriva led from the home country and the other one being from the armament 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 remain in the home country.

(Griffin and Pustay, 2009) FDI is mostly used by bouffant Multinational Enterprises (MNEs) and Transnational Corporations (TNCs) which outsource their production sites out of miscellaneous reasons such as low production costs. (Johnson et al, 2008) For the compan y itself FDI has several(prenominal) advanta! ges as well as disadvantages. In the end, the company has to remove 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 transnational strategy of a company. Johnson et al (2008) determined the most alpha 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 give a full essay, order it on our website: OrderCustomPaper.com

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