Author Question: In a brief essay, discuss how both exporting and FDI enable international businesses to maintain ... (Read 10 times)

ap345

  • Hero Member
  • *****
  • Posts: 537
In a brief essay, discuss how both exporting and FDI enable international businesses to maintain control in a foreign environment.
 
  What will be an ideal response?

Question 2

Gains and losses do not directly affect cash flows in the case of translation exposure, but cash flows can be significantly affected by transaction exposure.
 
  Indicate whether the statement is true or false



Perkypinki

  • Sr. Member
  • ****
  • Posts: 339
Answer to Question 1

With exporting, the firm can control its financial exposure to the host country market as it deems appropriate. Little or no capital investment may be needed. Second, exporting permits a firm to enter a foreign market gradually. A firm can then monitor its success prior to more extensive entry into that market. FDI affords the firm increased control over its international business operations, as well as increased profit potential. Control is particularly important to the firm if it needs to closely coordinate the activities of its foreign subsidiaries to achieve strategic synergies, as IBM has long done, or if it determines that the control is necessary in order to fully exploit the economic potential of proprietary technology, manufacturing expertise, or some other intellectual property right.

Answer to Question 2

TRUE



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

More than one-third of adult Americans are obese. Diseases that kill the largest number of people annually, such as heart disease, cancer, diabetes, stroke, and hypertension, can be attributed to diet.

Did you know?

The largest baby ever born weighed more than 23 pounds but died just 11 hours after his birth in 1879. The largest surviving baby was born in October 2009 in Sumatra, Indonesia, and weighed an astounding 19.2 pounds at birth.

Did you know?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

Did you know?

A headache when you wake up in the morning is indicative of sinusitis. Other symptoms of sinusitis can include fever, weakness, tiredness, a cough that may be more severe at night, and a runny nose or nasal congestion.

Did you know?

Patients who have been on total parenteral nutrition for more than a few days may need to have foods gradually reintroduced to give the digestive tract time to start working again.

For a complete list of videos, visit our video library