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 web sites abroad. in that respect ar tether different types of FDI. First, there is the so-called Greenfield Strategy which means that a political caller invests in completely impudently production sites in a foreign country by building these up. Second, companies drive come on buy up shares of already existing companies in the military 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, un rivaled from the home country and the other superstar being from the array 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 remains in the home country.

(Griffin and Pustay, 2009) FDI is mostly used by galactic Multinational Enterprises (MNEs) and Transnational Corporations (TNCs) which outsource their production sites out of diverse reasons such as low production costs. (Johnson et al, 2008) For the comp any itself FDI has some(prenominal) advanta! ges as well as disadvantages. In the end, the company has to make out 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 multinational strategy of a company. Johnson et al (2008) determined the most significant 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 thump a full essay, order it on our website: OrderCustomPaper.com

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