13 - Chapter 12 - Direct Investment and Collaborative...

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Chapter 12 -- Direct Investment and Collaborative Strategies All semester we have been describing the process of how and why firms internationalize their operations. After enjoying some domestic success, the first venture out is usually via exporting, where the entire production capacity, the entire Value Creation Chain remains firmly rooted in the firm’s home, domestic country; there is no initial FDI abroad, the firm simply “fills international orders” and as initial growth in exports occurs, they usually contract someone else to distribute their products or services. All forms of international entry can be analyzed using a three-variable framework of international experience, control over foreign distribution and operations, and degree of risk (and return) involved. We also examine the “whys” or motivation behind different firms’ choices of entry. For example, firms may export to simply fill orders or to sell excess capacity abroad, perhaps because their domestic markets have become
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This note was uploaded on 11/07/2011 for the course IBUS 330 taught by Professor Nicholson during the Fall '07 term at S.F. State.

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13 - Chapter 12 - Direct Investment and Collaborative...

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