Summary: International Business Awareness

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• foreign entry strategy

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• What do MNEs when they design an entry strategy to prepare a foreign direct investment

  They have a plan that specifies the objectives of an entry and how to achieve them

• What are the four common objective for establishing subsidiaries abroad and engage in FDI:

  Natural resorce-seeking which is the aim to access particular resources 
  market-seeking which is the aim to sell their products or services to new customers
  efficiency-enhancing which is the aim to reduce their overall costs of production   
  capability-enhancing which is the aim to access new ideas and technologies that help them upgrade their own technological and managerial capabilities

• As favourable locations in certain countries may give firms operating there access to location-specific advantages

  That is advantages that can be exploited by those present at a location

• What are the prime concerns of natural resource seeking

  The quality and costs of local resources within this the key decision parameters are the specific local resources that require for their operations

• What is high on the list of efficiency-enhancing investors where they prefer locations that combine low labour costs with good local infrastructure and access to major ports

  Geography and logistics infrastructure

• The existing structure of the industry is important but what is it?

  Investors m join industry clusters though for different reasons

• What are the first-mover advantages that market-seekers often pursue

  First movers may gin advantage through proprietary technology
  first movers may make pre-emptive investments
  first movers may erect significant entry barriers for late entrants
  first movers may build precious relationships with key stakeholders

• What are the late mover advantages?

  Advantages that late movers obtain and that first movers do not enjoy.
  may be able to free-ride on first movers  
  first movers face greater technological and market uncertainties
  first movers may be locked into a given set of fixed assets

• What is the first step of modes of entry

  Determine whether to pursue equity or non-equity modes of entry

• What is wholly-owned subsidiaries (WOS)

  A subsidiary located in a foreign country that is entirely owned by the parent multinational