Keywords: subsidiaries, multinational enterprises, MNEs, transnational activities, foreign direct investment, FDI, greenfield investment, leveraged institutions, wholesale financing, captive finance company, retail instalment contracts, market entry
Foreign direct investment options: Bertos Manufacturing Corporation
This case deals with the key considerations when planning an international expansion through direct investment in foreign markets. These considerations must be addressed by a finance company seeking to support the international sales of its parent firm, a USbased multinational enterprise (MNE). The company already operates three foreign subsidiaries in Canada, Mexico (both NAFTA members), and the UK but wishes to increase this network further through entry into additional markets. Ten candidate countries are being considered to determine the five most suitable for entry. A supplementary consideration is the mode of direct investment in the selected markets. Hence the need for a rational decision on where to invest and what form should this investment take.