Question 1: What are some of the basic issues a firm must confront when choosing an entry mode for a new foreign market?
Question 2: What is Foreign direct investment? Elaborate on its three basic forms (3 basic forms are Greenfield investment, Mergers and acquisitions, Horizontal and Vertical direct investment) What are the relative advantages and disadvantages of each of these forms?
Question 3: How does each advantage in Dunning's eclectic theory specifically affect a firm's decision regarding entry mode?
Dunning's theory indicates that a multi-national enterprise will get involved in a foreign direct investment if at least 3 conditions are present. Those 3 conditions are ownership specific advantages, location specific advantages and finally, internalization incentive advantages.
Question 4: Under what conditions should a firm consider a greenfield strategy for Foreign direct investment (FDI)? An acquisition strategy? For instance, If the culture and business climate of the host country is rather difverse from that of the home country, an organization may desire to use the greenfield strategy to enter the new environment.