International Business Management Essay Example | Topics and Well Written Essays - 750 words - 1

International Business Management - Essay Example The resources that the investor would like to control most are trademarks, patents and management know how that can be used to determine the competitiveness position of the initial holder (Schutter et al., 2013, p. 81). FDI can be horizontal or vertical. Horizontal FDI occurs when a company invests in the same trade as it has been dealing with at home (Chen, 2000, pp. 91–95). Vertical FDI has two forms, that is, forward and backward FDI. Forward vertical FDI occurs when a company invests in amenities that will devour the output of the original firm in the home country. The backward vertical FDI takes place where a firm invests in the facilities that provide raw materials or inputs to the home country (Schutter et al., 2013, p. 82). Coca cola has become the largest soft drink firm globally since it was formulated 140 years ago in Georgia United States. Currently, the company has its product in more than 200 countries worldwide serving more than 16 million people. The process of Coca Cola company investment in China started in 1979 after China and United States restored their diplomatic relations. The first Coca cola manufacturing factory was launched in 1981 in Beijing. The process of decision making consists of different stages and decision making along the way. The foremost phase of the process is the consideration for exportation possibility, in which the Coca Cola company managers determined if they can export their product to China. To make this decision the company considers transportation costs and the importation barrier. In case the transportation costs and importation barriers are too high, the Coca Cola Company discards the idea for exporting their product to China. In this notion it is impossible for the Coca Cola Company to export their soft drinks all the way to China, therefore, a different approach is used. The Company may think of joint venture alliances in the China market by