BUSI2025 Chapter Notes - Chapter 8: Greenfield Project, Acclimatization, Quality Control
Document Summary
Fdi occurs when a firm invests directly in new facilities to produce and/or market in a foreign country. Fdi preferred to exporting: high transportation costs, trade barriers. Fdi preferred to licensing: protection of technological know-how, retention of strategic control, capabilities not suitable for licensing. Fdi preferred to franchising: brand image, quality control, learning, market access. Global fdi flows are forecast to increase to us. 85 trillion in 2018, but still below the. Flows to developing economies were especially hard hit, with a decline of 14%. Flows to developed economies increased further, after significant growth in the previous year. Slower growth in international production contributed to lackluster global trade expansion. The weight of information and communication technology mnes in international production. Advantage: - immediate access to/control over tangible/intangible resources, management, employees, customers. Disadvantages: - prices / potential host government restrictions. Advantage: location selection / own organizational culture and practices / gradual acclimatization.
