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Spring 2012
International Marketing

Assignment 2

Topic: Modes of Entry into International Markets
Lessons: 22-29
Marks: 25
Due Date: June 14, 2012

Objective of the activity
The prime objective of this activity is to enrich the understanding of Foreign Direct Investment (FDI) and
its implications for international marketing.


The companies operating large size businesses have many options regarding expansion while dealing in
international trade. The companies, when going international, can engage in exporting, licensing,
franchising, specialized modes, Foreign Direct Investment (FDI) and counter trade. Every method of
international expansion has its advantages and disadvantages. The companies adopt the suitable option
depending upon their need and expansion requirements. FDI is one of the most commonly observed
methods in international business expansion. The investing companies have multiple choices for overseas
investment for example; they can set up their subsidiary, acquiring shares, set up a joint venture, merger
with any local company or buying a running business. FDI involves many business and political risks.
FDI brings technology, employment opportunities, increased production capacities and foreign exchange
in host country that’s why all over the world, countries encourage FDI and offer policy support and
investment security to foreign companies.

Real time scenario
India-Pakistan bilateral relationships were affected after Mumbai attack in 2008 especially in terms of
trade. India took stand and restricted the open trade with Pakistan. Since then Pakistani business
community cannot directly invest and operate in India. Recently according to the news published in
Turbine in April 13, 2012, India is planning to open FDI for Pakistan. 600 businessmen from Pakistan
visited New Delhi to attend a trade fair for the promotion of their products in India. This bilateral trade
relationship is expected to work as a driving force for peace and harmony between two neighboring

1. You are supposed to mention all potential risks involved in Foreign Direct Investment (FDI) for
Pakistani businessmen in India. (Marks: 15)
2. In your opinion, can this FDI opportunity for Pakistani businessmen bring any social cultural or
economic gain for Pakistan? Mention at least 10 potential benefits with reference to Pakistan.
(Marks: 10)

Student’s Guide
1. You are required to search and gather the information about the topic before
attempting this assignment.
2. It is strictly prohibited to reproduce or copy/paste the definition of FDI from any
internet sources.
3. You are also advised to study the India Pakistan trade relationship to grasp the
real time situation.
4. Be careful from those blogs which are promoting cheating culture among our
students and killing their creativity and critical thinking. Answers copied from
such blogs will be straightaway marked as zero. Similarly any relevant or
irrelevant material copied from internet sources will get the same treatment. It can
seriously damage your grades.
5. It is an opinion based assignments. Any identical answer will not be treated as
coincidental and will be straightaway marked as zero. It can seriously damage
your grades.
6. Assignment submissions, after uploading the solution file, will not be entertained.

Note related to load shedding: Please be proactive
Dear students!
As you know that semester activities have started and load shedding problem is also prevailing in
our country now a days. Keeping in view the fact, It is requested to all of you to manage to post
your activities as early as possible and don’t wait for the due date. For your convenience activity
schedule has already been uploaded on VULMS for the current semester, therefore no excuse
will be entertained after due date of assignments, quizzes or GDBs.

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