GMS 200 Chapter Notes - Chapter 3: Foreign Direct Investment, Insourcing, Franchising

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Navaneeth Mulloli Panikan
Key concepts in the challenges of globalization:
Global economy
International management
Global manager
Global Economy
Resource supplies, product markets and business competition are worldwide rather
than local
The process of growing interdependence of these components in the global economy
Market entry strategies
Types of market entry strategies:
Global Sourcing: is the practice of sourcing from the global market for goods and
services across geopolitical boundaries
Licensing agreement: means to give permission
Franchising: the practice of using another firm’s successful business model
Foreign Direct Investment is a direct investment into production or business in a country by an
individual or company of another country, either by
Buying a company in the target country or
By expanding operations of an existing business in that country
Insourcing: having people within the company do jobs that would normally be done by
Types of Direct Investments:
Joint Ventures
Operates in a foreign country through co-ownership by foreign and local partners
Global strategic alliances
Foreign and domestic firms share resource’s and knowledge
Foreign subsidiaries
Local operation completely owned by a foreign firm
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