Nowadays, all of this it is true that
Nowadays, the characteristics of foreign direct investment have changes than it was long time ago but it was mainly followed by the multinational companies to build their own image in the international markets. Today, most of the developing countries are experiencing high capital flows because foreign direct investment is the major source of capital availability in the developing countries. Foreign direct investment is a crucial element in the economic development of developing and under developed countries and then though all of this it is true that foreign direct investment helpful in the production of new technologies providing employment opportunities, facilities international market accessibility etc.
it is also termed as a major cause for the downfall of environment peace, it badly thwarts the equality of culture and society and disrupts the association with the local government with the economy (Annie et al, 2000). Therefore, even though a company wants to expand its identical business abroad to the international markets, it is recommended to take different entry modes in accordance with each nation’s regulations, culture, politics, economic and social environment. For examples, McDonald uses international franchising method to know the franchisees’ knowledge regarding their local culture to decide the menu in their fast-food restaurants.
Furthermore, Starbucks also address local taste in every region and decided their own menu to their customers by following seasons and it also one of the unique strategy to attract customers. For example, in Asia country such as Japan, China, etc. people have more long experience to drink tea rather than coffee.
Therefore, prior to entering into the foreign, it is recommendable for a company to understand and appreciate other people’s culture.