FDI Strategy Essay Example | Topics and Well Written Essays - 1250 words

FDI Strategy - Essay ExampleThese trends come with different advantages as well as their reasonably share of ch every(prenominal)enges as pressure to belong grows on these slews and firms regularly. To assist in these changing trends, foreign get off investment guarantees that the corporation is well-situated through mergers, joint ventures, or acquisition of shares. This guarantees their position in the exploitation market, and a place in their hosts market (Peng, 2012). MNE selected (who they are and what they do)Multinational enterprises are taking over the reality by storm as they strive and struggle to capture the international market through many of the products and services they offer. One major MNE that is popular in this day and age is probably the McDonalds desist food chain. This MNE has been around for a particularly long time and is keen on spreading its travel into different arenas of the world, so as to capitalize on the changing trends. Changes in the technol ogical and cultural theatre are making it easier for MNEs to break into emerging markets and take advantage of the growing number of consumers (Peng, 2012). McDonalds stomach probably has the largest chain of fast food restaurants around the world. It is situated in al nearly 119 countries, and has its headquarters in the United States. The corporation sells almost anything that is considered fast food, ranging from soft drinks to desserts for its ever-growing customer base. Sadly, one region that whitethorn non boast of having a branch of this corporation is North Korea. Challenges and advantages of FDI for the MNEOne of the main advantages of FDI for the MNE is that the host country may be assisted in their quest for improving their home and projects that boost their economy (Dunning & Lundan, 2008). McDonalds, in virtually of the areas that it is situated, can offer them the aid they need in order to be self-sufficient and increase their infrastructure developments. North Ko rea, as a region that does not boast of having a McDonalds branch or franchise, may need the services and job opportunities that arise from the corporations presence in the region. Moreover, great competition may arise from all the subsidiaries of the corporation, which may lead to an increase in productivity and gains from all groups participating in the business. Some of the challenges of foreign direct investment for the fast food corporation strike the exploitation of labor in the region. In order to make a mark in the region in which they are situated, corporations are pushed into focusing on their profits, rather than the positive impact of their presence. Also, the hosts countrys investment policies may be a tremendous challenge to the main corporation (Dunning & Lundan, 2008). If the host region has stringent investment policy measures, it may be next to impossible for the breed corporation to invest in the host country, or even find the right strategies to satisfy their overall organizational performance. Best way for the MNE to minimize foreign exchange risks For MNEs, it is crucial to identify the risks that are constitute to its operations. The corporation needs to monitor its financial, portfolio, and structural risks and engage in risk management strategies that may protect the corporations investments in the host country. When it comes down to foreign exchange and MNEs, structural risks are the most crucial risks to monitor. This is because mismatches between cash inflows and outflows can cause