Socio-Economic Characteristic

Socio-Economic Characteristic

Question

Answered

This assessment item has two activities: (a) Drawing conclusions for firms considering either exporting products to or undertaking business in two fictitious countries by comparing their socio-economic characteristic. (They are provided in the table in “Assesment Task” file) (12 marks) (b) Explain foreign direct investment (FDI). (5 marks) Format Part A 1 Conclusion 1. 2 Conclusion 2. 3 Conclusion 3. 4 Conclusion 4. Part B Foreign direct investment Part (A) Using the variables summarised in the table below, draw four conclusions which compare what the data could mean for firms either exporting to or undertaking business in these fictitious countries. Each conclusion should be 100-120 words. In each conclusion, use at least two variables. What information should I be analysing? Take note of the table on page 2 of the assignment document. Basically, your job is to make sense of the information provided. You are required to write 4 conclusions. For each conclusion, you must compare the two countries using any two or more of the variables in the table. Then, based on your analysis, you should discuss (in each conclusion) what are the potential implications for an international business. For example, based on your analysis of the country data, you may propose that one country is more suitable than the other as an export market for certain products. Or, you may propose that one country is potentially suitable as a location for FDI based on your analysis. You should analyse both countries in each conclusion. For example, if you are using the variables GDP and income equality in a conclusion, you should be analysing these in relation to both the countries, and based on your analysis, you will then propose what you think might be relevant from a business perspective (eg. maybe one country is more suitable as an export market for luxury products while the other is more suitable as an export market for food products, etc). Are definitions required? Do I need to start each conclusion with a definition of the variables that I am using? No, the purpose of writing these conclusions is for you to analyse the country information. You should not waste time and words defining what is GDP, what is population, what is inflation, etc. Instead, you should be analysing the information provided on both countries and discussing what may be important from an international business perspective. (3 marks each = 12 marks) Part (B) Foreign Direct Investment (FDI) A successful medium-sized Australian firm is considering setting up a production facility in a foreign market through foreign direct investment. The decision is to acquire an existing facility rather than setting up a greenfield venture. Explain the meaning of foreign direct investment and discuss the benefits and costs of using an acquisition approach.