Internalization theory best explains CEMEX’s FDI Essay Example for Free

Internalization theory best explains CEMEXs FDI Essay1.Which suppositious explanation (or explanations) of FDI best explains CEMEXs FDI? 1.Internalization theory best explains CEMEXs FDI because CEMEX entered into many countries and bought domestic cement businesses instead of licensing. CEMEX has a great system and needs to cling to it from competitors.2.What hold dear does CEMEX bring to a host economy? Can you see any potential drawbacks of inward investment by CEMEX in an economy? 1.The value is that CEMEX has a Midas touch that transforms a cement business into a thriving business. This brings great stimulation to the host economy and also helps in the construction field, which in turn helps to build cities and civilization. No, CEMEX would do well to invest inwardly, yet, CEMEX is better at acquisitioning businesses.3.CEMEX has a strong preference for acquisitions over greenfield ventures as an entry mode. Why? 1.Acquisitions ar solid because the business in the host e conomy already knows the demographics and the market. CEMEX just has to make the business better with little research. A greenfield venture would prove spoilt and not cost effective.4.Why do you think CEMEX decided to exit Indonesia after failing to soak up majority deem of Semen Gresik? Why is majority control so important to CEMEX? 1.A licensing is very dangerous. CEMEX only have a 25% push with Semen Gresik. It did not have full control and the methods of CEMEX would be clear and vulnerable to be stolen. CEMEX has a great system and does not want anyone interfering.5.Why do you think politicians in Indonesia tried to block CEMEXs attempt to gain majority control over Semen Gresik? Do you think Indonesias best interests were served by limiting CEMEXs FDI in the country? 1.Indonesian politicians did not the like the possibility of CEMEX taking over the cement market. Their interests were in domestic businesses and protecting the purity of their economy. No, Indonesia would hav e benefitted greatly if CEMEX was allowed an in.6.What is CEMEX doing today? Do they still engage in FDI? 1.MONTERREY, MEXICO- OCTOBER 8, 2010 CEMEX (NYSE CX), announced today that pursuant to the exercise of a put option by Ready Mix USA it will acquire its partners interests in the two joint ventures between CEMEX and Ready Mix USA which hav