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BA-250 Global Business Management • Chapter 8

FDI Investment Simulation

The boardroom awaits your decision. As executives of a US multinational, you must choose how to enter 5 foreign markets. Will you export, license, or invest directly?

🇺🇸 US Home Country Perspective

🇨🇳 🇮🇳 🇧🇷 🇿🇦 🇦🇺

Decisions

Target Markets

110

Max Points

Scoring Framework

How Scores Are Calculated

Scoring is based on Chapter 8 FDI theory and current (2024-2025) research.

Speaker Note

Key theories driving the scoring:

• Internalization Theory (p. 246): Tacit know-how + License = BAD (knowledge leaks). Tacit + FDI = GOOD (maintains control).

• Knickerbocker/Oligopolistic Reaction (p. 247-248): Firms in oligopolies must follow competitors abroad or risk losing position.

• Figure 8.4 Decision Tree (p. 262): High tariffs → Export bad. Weak IP → Licensing risky. Need control → FDI better.

• US Home Country: Bilateral relationships matter. US-China tensions vs US-India "friendshoring" vs US-Australia FTA.

🎯 Scoring Interactions (Based on Research)

Tacit + License + China

PENALTY: Weak IP protection = knowledge theft risk (State Dept 2025 Priority Watch List)

Tacit + FDI (any country)

BONUS: Internalization theory optimal — maintain control of proprietary knowledge

Oligopoly + FDI

BONUS: Knickerbocker — must follow competitors or lose market position

ANY + Export + Brazil

PENALTY: 25-35% Mercosur tariffs destroy margins

High-Tech + China

PENALTY: 2025 Treasury outbound investment restrictions on semiconductors, AI, quantum

Codified + License + Australia

BONUS: Strong IP protection makes licensing safe

Target Markets

Country Profiles (Click for Details)

Students must analyze these 5 markets before choosing entry modes.

🇨🇳

China

Geopolitical Tension

🇮🇳

India

Strategic Ally

🇧🇷

Brazil

High Tariffs

🇿🇦

South Africa

AGOA Partner

🇦🇺

Australia

Close Ally (FTA)

📊 Decision Reveal Grid

Enter team decisions ONE ROW AT A TIME across all teams. Scores calculate automatically.

Step 1: Enter Team Names

Team 1

Team 2

Team 3

Team 4

Team 5

Team 6

🏢 Part 1: Company Decisions

What kind of US-based company is each team? (Max 25 points)

Decision	Team 1	Team 2	Team 3	Team 4	Team 5	Team 6
D4: Competitive Advantage A=Tacit Know-How \| B=Codified/Patent \| C=Brand \| D=Resources	A,B,C,D	A,B,C,D	A,B,C,D	A,B,C,D	A,B,C,D	A,B,C,D
D5: Industry Type A=Oligopoly \| B=Fragmented \| C=High-Tech \| D=Commodity \| E=Service	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E
Company Score	—	—	—	—	—	—

🌍 Part 2: Country Decisions

What kind of host country did each team create? (Max 25 points)

Decision	Team 1	Team 2	Team 3	Team 4	Team 5	Team 6
D1: Political Ideology A=Radical \| B=Free Market \| C=Pragmatic \| D=Selective	A,B,C,D	A,B,C,D	A,B,C,D	A,B,C,D	A,B,C,D	A,B,C,D
D2: Ownership Restrictions A=None \| B=49% Cap \| C=JV Req \| D=Sector \| E=Prohibited	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E
D3: Incentives/Requirements A=Aggressive \| B=Targeted \| C=Require \| D=Mixed \| E=Laissez-Faire	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E
Country Score	—	—	—	—	—	—

🌐 Part 3: Market Entry Decisions

How did each US company enter each market? (Max 50 points)

Market Entry	Team 1	Team 2	Team 3	Team 4	Team 5	Team 6
🇨🇳 D6: China Entry A=Export \| B=License \| C=Greenfield \| D=Acquisition \| E=JV	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E
🇮🇳 D7: India Entry A=Export \| B=License \| C=Greenfield \| D=Acquisition \| E=JV	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E
🇧🇷 D8: Brazil Entry A=Export \| B=License \| C=Greenfield \| D=Acquisition \| E=JV	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E
🇿🇦 D9: South Africa Entry A=Export \| B=License \| C=Greenfield \| D=Acquisition \| E=JV	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E
🇦🇺 D10: Australia Entry A=Export \| B=License \| C=Greenfield \| D=Acquisition \| E=JV	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E	A,B,C,D,E
Entry Score	—	—	—	—	—	—

⭐ Concept Sheet Bonus

Enter score from graded concept sheet (0-10 points)

Bonus	Team 1	Team 2	Team 3	Team 4	Team 5	Team 6
Concept Sheet Score

📊 Running Totals

Country (25) + Company (25) + Entry (50) + Bonus (10) = 110 max

Component	Team 1	Team 2	Team 3	Team 4	Team 5	Team 6
Country Score	—	—	—	—	—	—
Company Score	—	—	—	—	—	—
Entry Score	—	—	—	—	—	—
Bonus	—	—	—	—	—	—
TOTAL	—	—	—	—	—	—