FDI Strategy Essay Example | Topics and Well Written Essays - 1500 words

FDI Strategy - Essay Example It is running a thriving business almost in all major countries across the globe and conceivably that is the reason why it is known as the largest conglomerate retailer in the world. Wal-Mart is frequently known as a hypermarket, it works to sale diverse range of commodities and services to the buyers; like from pet shops to cellular phone stores, meat to dairy products. ‘Low price always’ is the catchphrase used by the famous retail organization commonly; it provides goods at the most viable and affordable prices (Stone, 1997). It is likely that majority of the clients of Wal-Mart have no bank accounts and their earnings are less than that of the general average income of the country (Stone, 1997).The company was established in 1962 and helped in serving a healthy contest for all the other small retailers in the economy. Wal-Mart stores are now making substantial amendment in their performances, measures and policies that would help to endorse the use of service animals by customers with disabilities (Lane, 2010). These animals play a chief role to serve independence to people with disabilities. The organization allows animals in their provisions that are well taught; to support people who are physically handicapped (Feed the Future, n.d.). Taking into consideration the world financial disaster the organization has currently changed its catch phrase to ‘Save Money Live Better’ and has efficiently reduced the price of many products sold by them. 2. Analyze the challenges and advantages of FDI for the MNE in the country you selected. The essay explains Wal-Mart’s business attempt in Egypt. The economy of Egypt is a growing economy. In 1990’s the country have received series of financial benefits from the International Monetary Fund (IMF). The nation has received several debt reliefs due to its participation in the Gulf War. All these factors have been responsible for the nation’s considerable macroeconomic performan ces. From 2000 onwards the country has undertaken strict monetary and fiscal policies. These policies undertaken in the country have helped the nation to be liberal towards free market principles and made it open for prompt foreign investments. It is most advantageous for business firms like Wal-Mart to invest in emerging economies like Egypt. This is because these economies have infinite development potential within them. Investing in Egypt will help the company to dramatically improve its portfolios. On the other hand the political and economic conditions of an emerging economy are highly volatile thus it can give favorable or even unfavorable uncertainties to the foreign investors. Wal-Mart should not hesitate investing in Egypt because of the possibilities of unfavorable uncertainties, as this is common to any foreign investments made either in developed or in a developing economy. The markets of most of these economies are fast growing, thus foreign investors may diversify inve stments across several market segments. Moreover the Gross Domestic Product (GDP) of Egypt has been $527.6 billion in 2010, $536.9 billion in 2011 and $548.8 billion in 2012, shows a growing trend in the income level of the county (CIA, 2013). Thus if Wal-Mart invests in Egypt it would experience good market demand because along with the rising income level, the purchasing power of the consumers is improving. However there is a strong disadvantage that may arise as a challenge to Wal-Mart while investing in Egypt, the markets of emerging economies