最新国际商务精品电子教案Chap006.docx

最新国际商务精品电子教案Chap006.docx

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最新国际商务精品电子教案Chap006

ForeignDirectInvestment

Learningobjectives

∙Discusstheimportanceofforeigndirectinvestment（FDI）intheworldeconomy,andthechangingpatternsofFDIovertime

∙PresentdifferenttheoriesthatexplainwhyacompanywouldundertakeanacquisitionratherthanaGreenfieldinvestment

∙ExplainhorizontalFDI,andsuggesttheconditionsunderwhicheachmaybemostapplicable.

∙ExplainverticalFDI,andsuggesttheconditionsunderwhicheachmaybemostapplicable.

∙ImplicationsofthesetheoriesofFDI.ComparisonoflicensingtoFDI

Thefocusofthischapterisforeigndirectinvestment（FDI）.Thegrowthofforeigndirectinvestmentinthelast25yearshasbeenphenomenal.FDIcantaketheformofaforeignfirmbuyingafirminadifferentcountry,ordecidingtoinvestinadifferentcountrybybuildingoperationsthere.

WithFDI,afirmhasasignificantownershipinaforeignoperationandthepotentialtoaffectmanagerialdecisionsoftheoperation.ThegoalofourcoverageofFDIistounderstandthepatternofFDIthatoccursbetweencountries,andwhyfirmsundertakeFDIandbecomemultinationalintheiroperationsaswellaswhyfirmsundertakeFDIratherthansimplyexportingproductsorlicensingtheirknow-how.

TheopeningcasedescribesStarbuck’sinvestmentsoutsidetheUS.Althoughconcentratingoriginallyonthefranchisingmethodofexpansionandlicensingofitsproducts,Starbuckslaterpursuedotheroptionssuchasjointventures,whollyownedsubsidiaries,andacquisitionstoretaintightercontroloveroperations.

WebeSourcehttp:

//www.globalpolicy.org/globaliz/cultural/2003/0710starbucks.htm

OUTLINEOFCHAPTER6:

FOREIGNDIRECTINVESTMENT

OpeningCase:

Starbuck’sForeignDirectInvestment

ForeignDirectInvestmentintheWorldEconomy

TheGrowthofFDI

TheDirectionofFDI

CountryFocus:

FDIinChina

TheSourceofFDI

TheFormofFDI:

Acquisitionsvs.GreenfieldInvestments

ManagementFocus:

Cemex’sForeignAcquisitions

HorizontalForeignDirectInvestment

TransportationCosts

MarketImperfections（InternalizationTheory）

StrategicBehavior

TheProductLifeCycle

Location-SpecificAdvantages

VerticalForeignDirectInvestment

StrategicBehavior

MarketImperfections

ImplicationsforBusiness

ChapterSummary

DiscussionQuestions

ClosingCase:

FordandGeneralMotorsinRussia.

TEACHINGSUGGESTIONS

IliketoaskstudentstogivemeanexampleofafirmthattheyknowhasinvestedintheUS.FromthelistthatstudentspresentpushthemtofigureoutwhichofthesemaybelicenseesandwhichofthesefirmshaveactuallyundertakenFDI.ThenaskthequestionwhataresomeofthereasonsthesefirmsinvestintheUS.Youmayalsopointout,justasoutsourcingtakesjobsoutofthecountry,FDIcreatesjobsinthecountrywheresuchinvestmenttakesplace.

LECTUREOUTLINEFORCHAPTER

ThisteachingoutlinefollowsthePowerPointpresentationprovidedalongwiththisinstructor’smanual.

Introduction

Thischapterfocusesonforeigndirectinvestment（FDI）.FDIcantaketheformofaforeignfirmbuyingafirminadifferentcountry,ordecidingtoinvestinadifferentcountrybybuildingoperationsthere

Slide6-2Openingcase:

Starbucks

Intheopeningcase,Starbuck’sventuretogoglobalisdescribed.Althoughconcentratingoriginallyonthefranchisingmethodofexpansionandlicensingofitsproducts,Starbuckslaterpursuedotheroptionssuchasjointventures,whollyownedsubsidiaries,andacquisitionstoretaintightercontroloveroperations.ByOctober2000,Starbuckshadinvestedsome52millioninforeignjointventures.Bytheendof2002Starbuckshadmorethan1200storesin27countriesoutsideofNorthAmerica.Checkthewebsitesprovidedforyouforfurtherreadings.Inadditionthereareafewquestionsandanswersonthecaseprovidedforyouattheendofthischapterintheinstructionmanual.

WhydidStarbucksoriginallypursueastrategyoflicensingforinternationalexpansioninJapanandfurtherwhydidStarbucksretreatfromthatstrategyoflicensingandreverttojointventuresandsubsidiaries?

Starbucksbelievedthatthistechniquewouldallowittoachievethequickestpaththeinternationalexpansion.Althoughmuchmorewouldbeputintofindingtheproperlicensee,therewouldbelittleneedtoinvestconsiderablecapital.

StarbucksbelievedthattheindividualisticnatureofaStarbucksstorehadtobemanagedcarefully.Alicensingstrategy,althoughgivingittheopportunitytoexpandinternationally,didnotallowthestrongcontrolStarbucksfeltwasnecessaryforsuccess.Astrategyofjointventuresandsubsidiaries,wherehands-oncontrolisexpectedandrequired,wasclearlymorefittingtotheoperationalphilosophy.

ThesuccessofStarbucksreliedonstrongcontrolattheretaillevel,includingstorelayoutandthetrainingofpersonnel.Thecaseshowsthatmorethanonestrategyforinternationalexpansionmayberequireddependingonthemechanicsofthecompanyandthenatureofthecountryentered.

Slide6-3Whatisforeigndirectinvestment

Foreigndirectinvestmentisundertakenbyfirmssothattheycantakeadvantageofresourcesthatareeitherunavailableinthehomecountryorbecausetheseresourcesareavailableatcostslowerthanthoseintheirhomecountry.

Whenwetalkaboutfirmsseekingresources,thesefirmscouldbeseekingphysicalresources（exampleoil）CompaniessuchasDutchShellsetupGreenfieldoperationsinKuwait.Firmsmaypursueresourcessuchascheap/skilledlabor（Mexico,China）ortechnologicalandmanagerialskills（India）.FirmscouldbeseekingMarketstoincreasetheirsalesorbethefirstmoverssoastocapturemarketshareinwhichcasetheywillsetupsubsidiaries.GEorfirmscouldbelocatingthemselvesclosetosuppliersorrawmaterials.Oftenfirmsfindtheneedtofollowtheleadofsupplierfirmsandsetupfacilitiesclosetothem.

ItisimportanttonotethatfirmsseektopursuetheirstrategicobjectivesthroughFDIeitherbyacquiringstrategicfirmsormergingwithfirmsinordertoremaincompetitiveandsustainableovertime.

Slide6-4FDI-Flowversusstock

Whendiscussingforeigndirectinvestment,itisimportanttodistinguishbetweentheflowofFDIandthestockofFDI.TheflowofFDIreferstotheamountofFDIundertakenoveragiventimeperiod（normallyoneyear）.ThestockofFDIreferstothetotalaccumulatedvalueofforeignownedassetsatagivenpointintime.

Slide6-5WhyisFDIimportant?

FirmsundertakeFDIonlyifitisthestrategicinterestofthefirmforalloftheabovereasonsstatedintheslide

Firmswantapresenceinforeignmarkets

Firmswantcontrolovergrowthoftheseforeignmarkets

Togainfirstmoveradvantages

Towardoffcompetitors

Todeterminelocations,advertisingandotherrelatedstrategicdecisionsinthefirm’sinterest

Slide6-6TrendsinFDI

ThesignificantgrowthinFDIhasbothtodowiththepoliticaleconomyoftradeasoutlinedinthepreviouschapterandthepoliticalandeconomicchangesthathavebeentakingplaceindevelopingcountries.Globalizationoftheworldeconomyhasraisedthevisionoffirmswhonowseetheentireworldastheirmarket

Slide6-7FDIoutflows,1982-2002

Fig6.2

Slide6-8Growthinworldexports

Fig6.2

Slide6-9FDIflowsbyregion

Fig6.3

Slide6-10InwardFDIflowsFig6.4

AnotherimportanttrendishasbeentheriseofinflowsintotheUS.ThestockofforeignFDIintheUSincreasedmorerapidlythanUSFDIabroad.

TherapidincreaseinFDIgrowthintotheUSmaybeduetotheattractivenessoftheUSmarketandthefallingvalueofthedollar.

ItisdifficulttosaywhethertheincreaseintheFDIintotheUSisgoodforthecountryornot.TotheextentthatforeignersaremakingmoreproductiveuseofUSassetsandworkers,itisprobablygoodforthecountry.

Slide6-11FDIoutflowsbyselectcountry1998-2001Fig6.5

Figures6.3,6.4and6.5providesomeinsightintothecountriesthathavebeenthemajorrecipientsandsourcesofforeigndirectinvestmentinrecentyears.

Slide6-12FDItrends:

2001-2002

AdownwardtrendinFDIwasrecordedin2001-2002thatreflectedinpartthestateoftheeconomyandgeopoliticaluncertaintyofthetimes.

Slide6-13FormOfFDI:

Greenfieldversusacquisitions

OnceafirmdecidestoenteraforeignmarketusingFDItheyhavetodeterminethespecificapproachtheywillusetorealizetheirentrymode.

GenerallysettingupGreenfieldoperations（i.e.buildingbrandnewfacilities）aremoreprevalentindevelopingcountries.Oftenthiswasbecausetherearefewornoexistingfirmstoacquire.

Crossbordermergersandacquisitionsarefavoredbyfirmsbecausewhiletheyarequickertoexecutetheyalsobringinvaluablestrategicassetssuchastechnology,humanresourcesormarketshare

Slide6-14TwoformsofFDI

Therearetwokindsofforeigndirectinvestment:

HorizontalFDIisFDIinthesameindustryabroadasafirmoperatesinathome.Example:

AJapaneseautomobilemanufacturerinJapanseekstoproducethesameproductintheUS.VerticalForeignDirectInvestment

VerticalFDIisoftwotypes.

（1）BackwardverticalFDIinvolvesinvestmentintoanindustrythatprovidesinputsforafirm'sdomesticproductionprocesses.

（2）ForwardverticalFDIinvolvesinvestmentinanindustrythatutilizestheoutputsofafirm'sdomesticproductionprocesses.

Slide6-15,6-16HorizontalFDIwhenandwhy?

Impedimentstothesaleofknow-how

FDIwouldseem