Question

Please Help 300-500 words:

Question:

Before investing in a foreign location, a firm must take three things into consideration: the costs, benefits, and risks (political, economic, or legal) associated with entering into a business venture there.

Imagine you are the manager of a foreign company considering an investment in your home town. What would be some of the expected costs, benefits, or risks of starting a new business where you live? How high would you rate your location on its overall attractiveness to investors?

Note that you need to validate all definitions, and matters not known as facts, by citing from credible sources

Answer 1

Being the manager of a foreign company considering an investment in my home town, will have some expected costs, benefits, or risks for starting a new business at the place where I live. The expected costs will be real estate costs, marketing costs, human resources costs and operational costs for arranging the necessary infrastructure and supply chain for the business. The benefits of considering the investment in the home town at the place of living is that you are familiar with the market, aware of the legal regulations and promote the business in the network. The risks associated are limited market due to lack of competition, local brands available at lesser prices and lack of skilled talent leading to lesser margins and scope for profitability. The location can be rated low on its overall attractiveness to investors as there is uncertainty about long term success of the business and demand of the products in the local market of the hometown where I am living. The customers may not prefer the standard costs of a foreign company and expect product customisation which may dilute the brand in the market and the investment may not yield the expected returns.