Foreign Direct Investment
Foreign Direct Investment
You are the international manager of U.S. business that has just developed a revolutionary new personal computer that can perform the same functions as existing PCs but costs only half as much to manufacture. Several patents protect the unique design of this computer.
Your CEO has asked you to formulate a recommendation for how to expand into Southeast
Asia. Your options are (a) to export from the United States, (b) to license an Asian Firm to manufacture and market the computer in the Southeast Asian Region, or (c) to set up a wholly owned subsidiary in Asia. Evaluate the pros and cons of each alternative and suggest a course of action to your CEO.
Exporting involves producing goods at home and then shipping them to the receiving country for sale. Exporting involve the transportation costs and trade barriers. The managers are responsible to handle the market research, foreign distribution, logistics of shipment and collecting payment. Exporting is advantage to companies because the exportation of products may increase sales and profits. A company may gain higher revenue by boosting a sale of products and services into a market. When the export development has been covered, the additional foreign sales over long term may increase overall profitability. Exporting will enhance domestic competitiveness. Most companies become competitive in domestic market before involve in global. Being competitive helps companies to acquire some strategies. Exporting enables companies to diversify their portfolios in the domestic economy. It helps small companies grow and become more competitive in all their markets. Some companies market their products at certain seasons domestically where it has four seasonal. Companies who venture into the exporting business usually have a presence in the foreign market. It might require personnel and lead to expansion. Exporting can expand the life cycle of products. Many products go through
You are the international manager of U.S. business that has just developed a revolutionary new personal computer that can perform the same functions as existing PCs but costs only half as much to manufacture. Several patents protect the unique design of this computer.
Your CEO has asked you to formulate a recommendation for how to expand into Southeast
Asia. Your options are (a) to export from the United States, (b) to license an Asian Firm to manufacture and market the computer in the Southeast Asian Region, or (c) to set up a wholly owned subsidiary in Asia. Evaluate the pros and cons of each alternative and suggest a course of action to your CEO.
Exporting involves producing goods at home and then shipping them to the receiving country for sale. Exporting involve the transportation costs and trade barriers. The managers are responsible to handle the market research, foreign distribution, logistics of shipment and collecting payment. Exporting is advantage to companies because the exportation of products may increase sales and profits. A company may gain higher revenue by boosting a sale of products and services into a market. When the export development has been covered, the additional foreign sales over long term may increase overall profitability. Exporting will enhance domestic competitiveness. Most companies become competitive in domestic market before involve in global. Being competitive helps companies to acquire some strategies. Exporting enables companies to diversify their portfolios in the domestic economy. It helps small companies grow and become more competitive in all their markets. Some companies market their products at certain seasons domestically where it has four seasonal. Companies who venture into the exporting business usually have a presence in the foreign market. It might require personnel and lead to expansion. Exporting can expand the life cycle of products. Many products go through