Fdi and Firm Strategies

Foreign Direct Investment (in the following abbreviated as FDI) is a end point to describe a sealed 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 wind vane sites abroad. in that respect be tether different types of FDI. First, there is the so-called Greenfield Strategy which means that a political political party invests in completely natural production sites in a foreign country by building these up. Second, companies drive by buy up shares of already existing companies in the army 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 sensation being from the host 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(prenominal) as exporting or licensing, where the production site remains in the home country. (Griffin and Pustay, 2009) FDI is mostly used by macroscopic 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 company itself FDI has several(prenominal) advantages as well as disadvantages. In the end, the company has to call for whether FDI is a suitable firm strategy or not based on a variety of factors. There are several models and tools that can be used when regard the outside(a) strategy of a company. Johnson et al (2008) determined the most authorised ones. Som e are mentioned here: 1. Porters Diamon! d model 2. yip diagram of Internationalisation of firms with 4 determinants 3. The PESTLE framework...If you want to imbibe a full essay, order it on our website: OrderCustomPaper.com

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