a firm will favor fdi over exporting as an entry strategy when:,

The article discusses the risks of exporting and when a firm will favor FDI over exporting as an entry strategy. Keywords to include: export, import, foreign direct investment, entry strategy Foreign Direct Investment (FDI) is considered to be more sustainable than export because it provides its own market for goods, whereas exports can only sell in one place. The other consideration that firms have to make before deciding on their entrance strategy is whether they want to explore new markets or target existing ones. Exploring new markets means entering into regions where you may not already have ties with consumers who are willing to buy your product while targeting existing markets involves moving into countries that already share a language or culture with your country’s citizens. Another difference between exploring and targeting exists within the idea of economies of scale which refers to the idea of producing items at a lower cost per unit if you produce more units. Ultimately, the firm’s decision to explore new regions or target existing ones will depend on what they believe is in their best interest and how much risk they are willing to take in order to achieve those goals. Ultimately, all three options have risks but that doesn’t mean that your choice should be taken lightly because it affects both short-term and long-term success for the company as well as its employees. A firms next step now could either be exploration or targeting; whichever one it decides on will rely heavily upon which type of market it wishes to enter into (existing markets with economies of scale advantages vs new markets). Keywords: export, import,