Cemex+Case - lcrelgn Drfeci Invesl"rnrr. . f .r. Chapter 7...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
#s€ft €msaE ffi''Ex€ra Ee€ee _g * xee€ ffi es *aesruE** 1. In 2004, inward FDI accounted for some 24 prt. cent of gross fixed capital formation in Ireland, but only 0.6 percent in Japan. What do you think explains this difference in FDI inflows into the two countriesJ 7. Compare and contrast these explanations of FDI: internalization theory, Vernon's product life-cycie theory, and Knickerbocker's theory of FDI. Which theory do you think offers the I best explanation of the historical pattern of -r' FDI? WhY? 3. Reread the opening case on Starbucks and then answer the following questions; a. InitiallyStarbucks expanded internationally by licensing its format to foreign operators. It soon became disenchanted with this strat. egy. Why? b. \fhy do you think Starbucks has now elected to expand internationally primarily rhrough local loint ventures, to whom it licenses its format, as opposed to using a pure licensing strategy? E€wmwwssk Ymsk C*## Use the globalEDGErM site to complete the following exercises: 1. The Worll, Inuestment Report published annuaily by UNCTAD provides quick electronic access to comprehensive starisrics on foreign d irect investment (FDI) and the operations of transna- tional corporations. Garher a list of the top transnational corporations in terms of foreign direct investment. Also, identify each company's home counrry (i.e., headquarters country). Provide a commentary about the characteristics of countries that have the greatest number of eem*x"s F*r*Fgr: ffi *rest fi nvestrment In little more than a decade, Mexico's largest cement manufacturer, Cemex, has transformed itself from a pri- mariiy Mexican operarion into the third.largest cemenr company in the world behind Holcim of Switzerland and Lafarge Group of France with 2005 sales of lcrelgn Drfeci Invesl"rn€rr. ... f .r. Chapter 7 *eces4e*Aam c. What are the advantages of a joint-venture entry mode for Starbucks over entering through wholly owned subsidiaries? On oc- casion, Starbucks has chosen a wholly owned subsidiary to control its foreign expansion (e.g., in Britain and Thailand). Whv? d. Which theory of FDI best explains the intema- tional expansion strategy Starbucks adopted? You are the international manager of a U.S. busi. ness that has just developed a revolutionary new personai computer that can perform the same functions as existing PCs but costs only haif as much to manufacture. Several patents protect the unique design of this computer. Your CEO has asked you to formulate a recommendation for how to expand into Western Europe. Your op. tions are (a) to export from the United States, (b) to license a European firm to manufacture and market the computer in Europe, or (c) to set up a wholly owned subsidiary in Europe. Evaluate the pros and cons of each alternative and suggest a course of action to your CEO. transnationai firms. Are there any common tralts
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/31/2009 for the course BIZ 178 taught by Professor Meford during the Fall '09 term at Berkeley.

Page1 / 3

Cemex+Case - lcrelgn Drfeci Invesl"rnrr. . f .r. Chapter 7...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online