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Franchising and joint undertakings involve some investment
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wandajackson

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PostPosted: 26 Jun 2019 05:23:37    Post subject:  Franchising and joint undertakings involve some investment
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Any method
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that requires a special investment in foreign operations is known as a foreign direct expense. International trade and licensing is not widely known as FDI because it doesn`t call for direct investment in foreign operations. Franchising and joint undertakings involve some investment but to somewhat of a limited degree.

Acquisitions and new subsidiaries
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require large investment therefore represent a sizable proportion of FDI. Many International Companies use a mix of methods to increase overseas business. For example the trend of Nike began in 1962 each time a business student at Stanford`s small business school, wrote a paper on how a U. S. firm could use Japan technology to break the German dominance of the athletic shoe industry in the us.

After graduation, he visited
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the Unitsuka Tiger footwear company in Japan. He made a licensing understanding with that company to offer a shoe that he sold in the us under name Blue Ribbon Sports (BRS). In 1972, he / she exported his shoes in order to Canada. In 1974, he / she expanded his operations into Australia. In 1977, the organization licensed factories in Korea and Taiwan to offer athletic shoes and and then sold them in Indonesia.

In 1978, BRS evolved into Nike, Inc.,and began to export
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to Europe and Sth America. As a end result of its exporting as well as its direct foreign purchase, Nike's international sales climbed to $1billion by 1997 and many more than $7 billion through 2010.

A decision of why companies undertake FDI when compared with other modes of entry can be explained by OLI paradigm. The paradigm tries to be able to explain why companies choose FDI when compared to other modes of entry
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such as licensing, joint ventures, franchising.
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Adv



PostPosted: 26 Jun 2019 05:23:37    Post subject: Adv





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