What Is The Meaning of Direct Investment?


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Direct Investment

Direct Investment:- The Ultimate form of foreign involvement is direct ownership of foreign based assembly in manufacturing facilities. The foreign co. can buy part of full interest in a local co. or build its own facilities.

 

Advantages:-

1. Cost economics in form of cheaper labour or raw materials, foreign govt. investment, foreign savings etc.

 

  1. Better image and g/w because of certain of jobs.

 

  1. Stronger relationship with investors/ govt./ local suppliers.

 

The main disadvantage of this method is that the co-exposes itself to a larger investment risk.

 

Thus, it may be said that all methods if entering into a foreign market have their advantages and disadvantages. The company can choose from these modes according to its policies and objectives as regards international marketing.

 

 

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We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]

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