Foreign Direct Investment Research Paper Example | Topics and Well Written Essays - 2500 words

Foreign Direct Investment - Research Paper Example Acquiring equity interest in foreign countries is considered to be the most effective and easiest form DFI. From a pure financial perspective, acquiring equity interest in companies which does not give controls over the financial decisions of the local entity is not considered to be an effective FDI. By acquiring the controlling interest in a local company, a foreign country has an opportunity of obtaining strategic advantage. Another form of DFI, which has been gaining a lot of attention lately, is licensing and technology transfer between organizations. With the advancement in science and technology, the MNCs are now investing heavily in Research and Development (R&D) in order to devise cheaper, more effective and efficient ways of production. Through licensing and technology, organizations are entering into alliances with foreign entities, even academic institutions, which have brought significant advancement in the fields of medical, food and agriculture, digital media production , robotics and information technology communication. Licensing agreements are lucrative and beneficial for the companies as it allows them to take full advantage of the latest technologies and advancement, without having to expose themselves to the risk of failed R&D investments. Readymade ideas and innovations are on the shelves, and all the organization has to do, is to pay royalty. Organizations, particularly MNCs, indulge themselves in FDI bearing a defined set of motives into consideration. Enhancing profitability and shareholders wealth, reducing cost of production and improve the method of production are few. Broadly, the reasons for doing DFI can be divided into two categories; Revenue related motives and Cost related... Organizations, particularly MNCs, indulge themselves in FDI bearing a defined set of motives into consideration. Enhancing profitability and shareholders wealth, reducing the cost of production and improve the method of production are few. Broadly, the reasons for doing DFI can be divided into two categories; Revenue related motives and Cost related motives. Considering its revenue related motives, a company has to constantly evaluate the potential of its current market in order to identify whether it has been saturated to an extent where the derivation of additional revenue is impossible. These situations often arise when there is intense competition in the home country and the growth of the company has reached its threshold. In order to survive and operate profitably, the organizations then seek other horizons. Countries such as China, India, South Korea and Malaysia are few which have been attracting foreign investors lately. With the passage of time and international trade becomi ng more and more regulated, the trade barriers have been abolished and consumers of developing countries are being benefited. A Foreign market can be proved to be profitable in cases where the factor of production in the organization’s home country is expensive. Race for new and advance technology is becoming more vicarious among the giant MNCs. It is quite apparent that the organizations which are heavily technology driven are performing at a better pace when put in comparison with their competitors.

BBA-Strategic Analysis Essay Example | Topics and Well Written Essays - 2000 words

BBA-Strategic Analysis - Essay Example BBA-Strategic Analysis According to Geurden, some banks are good at customer management or even in creating customer access points. The banks plan to focus on the customer service area and outsource the other banking functions like creation, running and operating technologies that implement new financial products. Most banks now days outsource of their technical jobs to data centers. Even bank of America is outsourcing its many parts in the banking infrastructure and this includes the automatic teller machines. Large banks such as the world well known Citibank go even further by putting into place a full range of financial services within each one stop shop bank location to service their clients’ banking needs (Rubin & McNeil, 1977). The banks are in much need of flexible information technology infrastructure to integrate and hasten the accurate reporting of banking services applications with the banks’ bank – end systems. Another trend that banks are happily engaged in is that the banks are convincing companies to outsource the financial services jobs to them. A big bank, Nordea of Scandinavia, even gives companies access to automated payment processing with Microsoft’s Biztalk accelerator for accounting services. Many big banks were originally smaller banks that consolidated and merged to form a big bank. The advantage of mergers and consolidations are that the formerly competitive banks can now share a common database of customers and to blaze the other combining partners’ uncharted territory t generate more sales and interest income.