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Introduction
Globalization of business is recognized by most of organizations for creating wealth that benefits nations and individuals world – wide. Much of the growth in the international trade and investment is due to Multinational Corporation. Historically, international business activities first took the form of exporting and importing. However, those traditional cognitions are not any more adapted for doing international business. In order to gain competitive advantages, capital will have to be the place where necessary. Therefore, the foreign direct investment is commonly the decision for firms, which want to exploit its competitive advantage by accessing foreign market. There are thousands of reasons for a company to produce in another country, and not necessarily in the country that is cheapest for production or the country where the final good is sold (Czinkota, 2005). The subject of international investment arises from one basic idea: the mobility of capital. In brief, a firm can achieve their goal with lots of advantages by invest in foreign market. This paper is going to introduce what facts lead the company to make foreign direct investments.
Targeting Company: Samsung
Samsung Electronics Co., Ltd is one of the largest electronic producers in Asia. Products built by Samsung Electronics include televisions and many other kinds of home appliances, telecommunications equipment and computers. Samsung is also a technological leader in the electronics, semiconductor, and communications industries. Samsung Group was found in 1938. They entered globe technology marketplace in 80s and leap onto the globe stage in earlier 90s. In Oct 1992, Samsung Electronics successfully made their investment in China and began to manufacturing.
Targeting Market: China
During 1990s it was hard to do business in China especially for the foreign companies. This is largely because of the government’s dependence on an ever-weakening state sector. The marketplace of China had...