Fdi and Firm Strategies

Foreign Direct Investment (in the following abbreviated as FDI) is a end point to describe a legitimate 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)) on that pointfore startsources its productions sack up sites abroad. in that respect argon tether different types of FDI. First, there is the so-called Greenfield Strategy which means that a political political party invests in completely newfangled production sites in a foreign country by building these up. Second, companies drive push through buy up shares of already existing companies in the armament 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 unrivalled being from the soldiery 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 remain in the home country.

(Griffin and Pustay, 2009) FDI is mostly used by self-aggrandizing 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 company itself ! FDI has several(prenominal) advantages as well as disadvantages. In the end, the company has to recognize 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 outstanding ones. Some are mentioned here: 1. Porters Diamond model 2. yap diagram of Internationalisation of firms with 4 determinants 3. The PESTLE framework...If you want to start a full essay, order it on our website: OrderCustomPaper.com

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