Why Would a Company Choose to Use Foreign Direct Investment

question 7

Essay

Why would a company choose to use foreign direct investment as a way to enter a foreign market instead of other, less risky options? What are the disadvantages of foreign direct investment? What are the types of foreign direct investment?

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Definitions:

Exchange Function

The process in which goods, services, or assets are traded between parties.

Marketing Mix

A set of actions, or tactics, that a company uses to promote its brand or product in the market. It typically includes the 'Four Ps': product, price, place, and promotion.

Customer Needs

The essential requirements and desires of buyers that motivate them to make purchasing decisions.

Actual Price

The final price at which a product or service is sold, after including discounts, promotions, and additional charges or fees.