FDI Strategy Assignment Example | Topics and Well Written Essays - 1500 words

FDI Strategy - Assignment Example Additionally, firms should take into account the economic and political instability of foreign country that they want to invest. This is based on the fact that any instability either political or economic might have adverse effects on the performance and profitability of the entity. This paper analyses the strategies that AT&T, an American based firm would emulate in its endeavor to enter Morocco market. AT&T Company AT&T is a telecommunication company based in US. With Its headquarters in Whitacre Tower, Texas, United States, the company is the largest provider of fixed telephony as well as mobile services. Additionally, the company provides IP-based communication services to US companies making it to enjoy high revenue. To ensure that businesses across the US emulate effective communication among themselves and with their customers, AT&T under the leadership of Randall Stephenson the CEO, provides a 4G network that covers more than 280 million people across major cities. One of the major factors that have made the company to attain a competitive advantage over its competitors in the US telecommunication industry is the extensive use of the technology. For example, the company has initiated AT&T U-verse a high technology TV that has wide range of features and capabilities making it a dream product for US residents and other foreign customers. With an operating income of more than US$ 16.309Â  billion and total assets worth US$ 270.344Â  billion, AT&T Company has the ability to enter Morocco market. Although it is new company in the market, it foreign domestic investment strategies will play a significant role in facing off challenges that might occur in the new market. Challenges and advantages of AT&T entry of Morocco market One of the major challenges that the company will face in the new market is lack of adequate customers. It is worth to note that most of the Morocco citizens are already loyal towards Maroc Telecom, the major telecommunication company i n Morocco. This implies that AT&T will need to undertake extensive marketing to attract the attention of customers. Being a new company from a foreign country, majority of the telephone users may hesitate to switch to new operator since they are not aware of its benefits or intention. Another challenge that the company will face is stiff competition. Even though AT&T is well established in US, Maroc Telecom is equally recognized as a valuable company in Morocco. In this way, Maroc has acquired a wide market that has made it to acquire a competitive edge in the country (Timmons, 1994). An additional challenge is the political factors. Even though its entry in the new market has a long term impact on the Morocco economy in terms of creating employment and reducing poverty, the government may hesitate to support its operation in its effort to protect domestic companies. Despite the various challenges that AT&T will face in the new market, the company is financially strong. This implies that it has adequate resources at its disposal to enter the new market. For example, the company can employ skilled employees from its competitors by giving them high salaries and more benefits. In the same way, AT&T can lower its prices to a level that customers will start moving away from the domestic companies to adopt AT&T services. Based on its product diversification and large sales in the US market, lowering of the initial prices will not have a significant impact