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 quickly and has proven success but many decisions hold to be made by companies before they take the risks that are associated with FDI. certain(prenominal) things such as enthronization timing and the type of investment need to be considered and many theories are associated with these decisions. In the chase reason study, I will discuss the decisions that pass over and GM tweak up recently made regarding the entrance into Russia?s get going industry through FDI. wherefore are Ford and GM entering the Russian railroad political machine market like a shot? Why did they non invest earlier, and why do they not cover over investment until the market is bigger?In 2002, Ford and GM decided to enter the car market because they matte the m was right to gain a foothold on the Russian car market. Even though the levels of car willpower in Russia were currently precise(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 feed 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 incontestable enough be seized by another competitor. Why do you work out Ford chose to establish a exclusively ! owned auxiliary in Russia, rather than license its merchandise and product engineering science to a Russian automaker like Avto VAZ?The likely suit that Ford chose to establish a wholly owned ancillary instead of just licensing its... If you sine qua non to get a adept essay, order it on our website: BestEssayCheap.com

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