Managerial Analysis

Overview and Thoughts

Foreign direct investment (FDI) , which is the process of investment by organization directly to produce in a foreign country, results in the transfer of value from one country to another. This can lead to direct impact and investment on infrastructure, employment, income, accumulation of assets and knowledge, and overall economic growth. It is like someone (investor) bringing their money and equipment to your farm and handing it to you to help you produce more in exchange for a share of your crops. In theory, both you and the investor benefit. You get to increase your production and maybe employ your children and family members, and the investor gets crops without doing the job. So, it is a win-win situation.

But it is not that simple. The level of FDI flow into the country depends on two main factors: First, the level of governmental restriction and facilitation to foreign direct investment, and second, the perceived profitability of the country, which depends on the cost of production, resources, laws, level of political stability, and level of economic growth.

So, a foreign investor needs to investigate the country’s attitude, laws, regulations, and predicted return to investment before making an investment decision. This is what you will do in this report, which is to help an organization choose a country to open a factory there.

Assignment Description

A manufacturing company that is located in your home country has approached you and asked you to help them choose a country to build a factory there. Your job is to pick a country, evaluate its pattern of FDI in the past 10 or 20 years, state which industry attracts the most FDI in that country and why, what type of FDI (manufacturing, high tech, finance, etc.) is most profitable in that country, then provide a recommendation on what type of manufacturing output that country is most suitable for and why.

The following are useful sources for obtaining FDI data by country and industry.

FDI Sources

To review these sources, copy and paste the following links into a new web browser.

Answer Preview for Managerial Analysis

APA

600 Words