GMS 724 Lecture Notes - Lecture 10: Foreign Direct Investment, Master Franchise, Intangible Asset

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 724
• Professor: Howard Lin

Document Summary

When production abroad is cheaper than at home. When transportation costs to move goods or services internationally are too expensive. When products and services need to be altered substantially to gain suicient consumer demand abroad. When governments inhibit the import of foreign products. When buyers prefer products originating from a particular country. Although companies may have products or services that consumers abroad would like to buy, producing them within their home markets may be too expensive, especially if other companies can make reasonably similar substitutes abroad at a lower cost. Transportation raises costs so much that it becomes impractical to export some products. Moreover, the higher the transportation costs relative to production costs, the more diicult for companies to develop viable export markets. As long as a company has excess capacity, it may compete efectively in export markets despite high transport costs.