Ford and GM in Russia (FDI)

IntroductionForeign Direct Investment (FDI) occurs when a company invests directly in facilities to produce and/or market a product in a foreign country. (Hill, 2004) This type of venture is growing chop-chop and has proven success but many decisions convey to be made by companies before they take the risks that are associated with FDI. certain(prenominal) things such(prenominal) as enthronization timing and the type of investment need to be considered and many theories are associated with these decisions. In the chase show window study, I will discuss the decisions that cover and GM exhilarate up recently made regarding the entrance into Russia?s live on industry through FDI. wherefore are Ford and GM entering the Russian railroad motorcar market direct? Why did they non invest earlier, and why do they not bundle over investment until the market is bigger?In 2002, Ford and GM decided to enter the car market because they felt the m was right to gain a foothold on the Russian car market. Even though the levels of car willpower in Russia were currently truly(prenominal) low by international standards, car sales were rising by approximately 8% a year. (Hill, 2004) This trend was very inviting to companies that were looking at getting in ahead of the competition. Getting into this venture any earlier would stimulate been a very risky investment and the risk did not outweigh the potential reward. If the trend continued it would mean very large profits for Ford and GM and postponement may have meant a missed opportunity that would most for sure enough be seized by another competitor. Why do you work out Ford chose to establish a alone owned auxiliary in Russia, rather than license its employment and product engineering science to a Russian auto maker like Avto VAZ?The likely suit that Ford chose to establish a wholly owned ancillary instead of just licensing its... If you indispensableness to get a adept essay, order it on our website! : BestEssayCheap.com

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