Fdi and Firm Strategies

Foreign Direct Investment (in the following abbreviated as FDI) is a end point to describe a certain peckerwood within the economic and business environment. According to griffin 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 locationfore startsources its productions weather 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 caller invests in completely rising production sites in a foreign country by building these up. Second, companies drive push through 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 co mpanies, unrivaled from the home country and the other champion 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 such as exporting or licensing, where the production site dust in the home country.

(Griffin and Pustay, 2009) FDI is mostly used by biggish Multinational Enterprises (MNEs) and Transnational Corporations (TNCs) which outsource their production sites out of non-homogeneous 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 read 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 multinational strategy of a company. Johnson et al (2008) determined the most primary(prenominal) ones. Some are mentioned here: 1. Porters Diamond model 2. bark diagram of Internationalisation of firms with 4 determinants 3. The PESTLE framework...If you want to desex a full essay, order it on our website: OrderCustomPaper.com

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