Question

You are a consultant that is in the last round of proposals to become the sole strategic adviser to the CEO of a top 5 global manufacturer of doors & windows. The firm sells and has a local presence in the 100 top ranked countries by GDP.

You and the other finalists have been asked to address potential Foreign Direct Investment in a non Top 100 GDP country. The CEO is seeking for a new high growth market (even if it comes with some political instability) and is asking you to select it. In your post, please provide your country selection and the primary reason why you selected it. Also briefly address how the organization would mitigate one or two major risks associated with FDI.

Answer 1

Ans: In this case, my selection is the Asian countries for the sale of the goods involved in the manufacturing of doors and windows so the strategic selection of Asian countries is on the basis of following reasons.

• The scope of increase in market share is very high in the Asian countries like India Nepal Bangladesh Pakistan Sri Lanka Myanmar etc.
• These countries are basically a high and consumer market which can consume a quality product at a reasonable price, therefore, it is a good policy to increase the foreign direct investment in this country to make the market ready to consume the goods.
• These countries are basically increasing towards the improvement of the infrastructure, basically the housing infrastructure.

It is important to raise the expenditure in the home materials, therefore, it is a good opportunity for our company to maximise the sale of goods because our specialisation is in the making of doors and windows which are the essential parts of housing expenditure.

But some of the major risks associated with FDI are as follows.

• It is difficult to provide a quality product at a very reasonable price in these countries because the purchasing power capacity of the citizens are not so good as per the Global consumers.
• The basic infrastructure in this country is very poor so it is very difficult for Company 2 to increase the establishment of manufacturing units in these countries.