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Company A and Company B are both considering different forms of FDI. Company A needs to...

Company A and Company B are both considering different forms of FDI. Company A needs to have complete control over manufacturing and marketing in the foreign market; Company B needs to protect many valuable strategic assets, such as brand loyalty, and customer relationship. It is more likely that the chosen form of entry for Company A would a(n) __________, and that the chosen form of entry for Company B would a(n) ___________: acquisition; greenfield licensing; greenfield greenfield; acquisition acquisition; licensing

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Answer #1

Option C.

  • It is more likely that the chosen form of entry for company A would be a Greenfield and that the chosen form of entry for company B would be an acquisition.
  • The Greenfield FDI is a form of FDI in which a company invests in a foreign country inorder to build up their business from scratch so that they can have complete control over a particular market in the foreign country.
  • Hence the country A follows Greenfield FDI.
  • The acquisition FDI is a form of FDI in which a country aims at acquiring a foreign firm inorder to protect valuable assets like brand loyalty, customer relationships, trademarks or patents.
  • Hence the country B follows acquisition FDI.
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