International Business Term Paper Example | Topics and Well Written Essays - 2000 words

International Business - Term Paper Example 54). Factor conditions discuss country’s consideration about production factors (e.g. skilled HR required in a certain industrial area) (Johnson, 2003, p. 54). Demand conditions evaluate country’s national market demand for the good/service to be produced. Related and supporting industries discuss the existence of internationally competitive industries in the home market. Firm strategy, structure and competition are issues defining principles of organizations’ creation, development and management in the home market. 3. Three common characteristics of Multi National Enterprise Multinational Enterprise has three general features: a large corporation with central office and many other branches worldwide. MNE make direct investments in local firms and considers peculiarities of product adaptation to the needs to every particular market (Johnson, 2003, p. 14). 4. Five basic steps in the strategic management process Strategic management is based on five basic steps. Fi rst of all, strategy, vision and mission must be developed (Kline, 2005, p. 67). This initial stage is crucial for any company because it sets the main principles of further company’s development. The next step is analysis of internal and external factors. In other words, on this stage company analyzes structural peculiarities of their company and discusses external factors influencing their business. The third step concerns ‘distillation’ of the best choices and possible steps. The fourth step is strategic plan development, which step-by-step describes strategic measures taken by a company. The fifth step is implementation and evaluation of steps considered above. 5. Foreign Direct Investment reasons Foreign direct investment implies company’s physical investment from one country into building a factory/creating some kind of a project etc in another country. Currently, there are several reasons for FDI (Johnson, 2003, p. 71). A desire to be global and to be a successful competitive participant in the international arena, reach potential clients overseas and access a new market are wide spread features of potential FDI. It is also important to note that once export of goods or services produced becomes critically increased then it is more efficient and cost effective to make FDI. 6. As political system change, economic system follows. Statement explanation. A change of political system is a natural process happening in every country. A constantly changing nature of mankind is explained by mankind development and thus countries’ development. When certain political processes take place, then internal income of the country, wealth and occupation of people is gradually changing. Economic development exerts influence on income equality. At this point linearity theory may be applied. In accordance with this theory economic development is a direct way to urbanization leading to communication and higher level of education and finally, to Democracy. Thus we can see a perfect interdependence between political and economic systems. 7. Privatization benefits Privatization is a kind of structural reform occurring in both developed and developing countries. The main goal of privatization is to reach more profound microeconomic efficiency and foster economic growth (Kline, 2005, p. 77). Abundance of inefficient