Foreign Direct Investment Essay

Case Discussion Questions1. Why, historically, has the level of FDI in Japan been so low? The relatively low FDI stock in Japan is equatingtly the result of a history of official inhibitions on FDI. In slightly industries, inward FDI penetration, as measured by the share of employment accounted for by outside affiliates, in Japan in fact is on par with the United States. However, a large number of sanctuaries with almost no foreign involvement remain, so that FDI penetration overall is still very low. age to some extent, this can be explained by Japans relatively isolated geographic location, historical factors play an important role. Throughout the centuries and until quite recently, Japans rulers have viewed foreign involvement in the rescue as a threat and consequently erected various barriers to FDI.2. What are the potential difference benefits to the Japanese economy of great FDI? The potential benefits to the Japanese economy of greater FDI are the ones listed below F aster revenue growth than domestic firms significantly higher profitability and sales margins than domestic firms Greater capital enthronization per employee than domestic firms high total factor productivity than domestic firms higher(prenominal) spending on research and development per worker than domestic firms and Higher average wages than domestic firms.3. How did the submission of Wal-Mart into the Japanese retail area benefit that sector? Who lost as a result of Wal-Marts entry?It helped restructure Japans retail sector- boosting productivity, gaining foodstuff share, and profiting in the process. Wal-Mart implemented its cutting edge information systems, adopted tight pedigree control, leveraging its global supply chain to bring low constitute goods into Japan, restraining employees to improve customer service, and extending opening hours. It was more difficult than Wal-Mart had hoped. Wal-Marts entry prompted local rivals to change their strategies.4. Why has it been so hard for Wal-Mart to make a profit in Japan? What might the company have through with(p) differently?The companys global marketing strategy has many an(prenominal) flaws. Wal-Mart failed to grasp the consumer and retail environment in Japan. With a population of 127 million, the highest per capita income and the stake largest economy in the world, Japan is a very attractive market for retailers. Perhaps more research into their cultural values and patterns could have helped quash some of these mishaps.