Foreign direct Investments_creating operating profits through ownership and management of real assets. owning at least 10% of the company.

Indirect Investments_aimed at earning financial incomes such as dividends and interest. less than 10% ownership.

M&A is a type of Direct investment usually aimed at merging and acquiring a company's management, operations and core competencies.

it is agreed upon as it can help increase the shareholder value for both the acquiring and target.

saves time required for market entry, usually preferred in industries with idle facilities and saturated technology use.

preferred by acquiring company to achieve economies of scale and scope

doesn't require starting the company from the roots.

often companies from developing countries take on the local companies in developed countries to quickly acquire their efficient technology.

Creating synergies_acquisition premium paid should be less than the value generated by the acquisition.

Team specializing in M&A that can evaluate synergies and provide accurate acquisition premium.

Team specializing in M&A

Strategic review

Corporate valuation

Negotiating the terms of M&A

Building integrated Task force following the acquisition.

Present Value=Future Value*Reciprocal of Future value element which is also called as the present value discount value.

PV=FV*1/(1+R)^n

Increased sales through market dominance_ acquiring the company in the same industry to reduce competition, increase prices and create exclusive profits/ should be careful of Fair Trade commission, as there will be increased monitoring to curb monopolies. Possible Sanctions.

Cost saving benefits along with profitability as the economies of scale will reduce the production cost which will be profitable to the acquiring company.

Vertical integration can lead to reduced cost by having a raw material and distributor.

Replacement of the inefficient employees of the acquired company.

the process of solving various issues that may arise from different organizational cultures and nationalities of the people.

necessity to transfer management resources and competencies between them.

natural integration of the companies will determine the success of the M&A.

Should aim at creating new corporate culture that assimilates both cultures and creates new values.

Management should be aware of the anxiety of the employees.

Mutual visits and culture exchange must be encouraged.

Exercise mutual trust and harmony among the acquired and acquiring company.

Combine cultural strengths and encourage company wide participation and labor management.

Acquiring company should actively utilize the management localization and not act like a dictator. Giving authority will help build trust among the acquired company.

Collective mental programming that distinguishes one group from other.

Understanding local customers, suppliers, employees and governments are essential to establish successful globalization strategy.

Culture can affect the marketing activities in local areas.

The main factors of culture differences (Hofstede Culture Dimensions Theory) :