wandajackson
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Joined: 26 Jun 2019
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Any method Only registered users can see links on this board!
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that requires a primary investment in foreign operations is labelled as a foreign direct expenditure. International trade and licensing is not regarded as FDI because it doesn`t require direct investment in unusual operations. Franchising and joint projects involve some investment but into a limited degree.
Acquisitions and new subsidiaries Only registered users can see links on this board!
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require large investment therefore represent a considerable proportion of FDI. Many International Companies use a variety of methods to increase foreign business. For example the progression of Nike began in 1962 whenever a business student at Stanford`s enterprise school, wrote a report on how a OUGHOUT. S. firm could use Western technology to break the German dominance in the athletic shoe industry in the united states.
After graduation, he visited Only registered users can see links on this board!
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the Unitsuka Tiger casino shoe company in Japan. He made a licensing contract with that company to create a shoe that he sold in the united states under name Blue Bow Sports (BRS). In 1972, this individual exported his shoes to Canada. In 1974, this individual expanded his operations directly into Australia. In 1977, the business licensed factories in Korea and Taiwan to create athletic shoes and after that sold them in Japan.
In 1978, BRS turned Nike, Inc.,and began to export Only registered users can see links on this board!
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to Europe and Southern area America. As a effect of its exporting along with its direct foreign investment decision, Nike's international sales arrived at $1billion by 1997 and much more than $7 billion simply by 2010.
A decision of the key reason why companies undertake FDI compared to other modes of entry might be explained by OLI paradigm. The paradigm tries to explain why companies choose FDI compared to other modes of entry Only registered users can see links on this board!
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such as licensing, mutual ventures, franchising. |
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