FDI Analysis Paper

Decent Essays

Andras, 2010). This type of threat can leave businesses suffering in a marketplace for inappropriate reasons. FDI Analysis A U.S. firm that wants to conduct business in Russia needs to examine whether their investments will grow and whether their assets can be protected. The criminal situation presents a problem for investment into Russia. Crime rates are high and climbed as a result of the recession. The increase was a result of the inadequate role of the state and deepening poverty, inequality, increased alcohol abuse, and increased drug abuse (Ivaschenko, Nivorozhkin, & Nivorozhkin, 2012). Approximately 43% of crime is related to thefts and approximately 12% is attributed to other economic crimes (Ivaschenko, Nivorozhkin, & Nivorozhkin, …show more content…

Russian organizations typically are described as organizations that require transactional leaders with a top-down orientation (McCarthy, Puffer, May, Ledgerwood, & Stewart, 2008). This type of organization can hamper Russian firms as they transition to a market economy. Most of obstacles to FDI in Russia are institutional and there is much needed advancement in stability, flexibility, and transparency (Yi Sun & Walton, 2009). However, a firm can put in place leadership with specific goals towards changing organizational culture and training Russian …show more content…

companies need to have a plan to create demand for their products. Consumer ethnocentrism can be moderated by aggressive marketing tactics. Western companies are trying to get into emerging markets and Russia, a former communist country, is a target for these companies. Consumer ethnocentrism in Russia has been a predominant barrier to success of foreign products in Russia and in Russia some distinguish between domestic products that are described as in-group products and foreign products that are described as out-group products (Puzakova, Kwak, & Andras, 2010). Research shows that the Russians view foreign products of superior quality, but remain ethnocentric in their consumer behavior (Puzakova, Kwak, & Andras, 2010). Using marketing communications the negative attitudes that are present with buying foreign products can be alleviated. The advertising efforts can be used to explore more moderate behavioral consequences of consumer ethnocentrism with initial contact being met with anxiety, but more subsequent positive contacts leading to comfort (Puzakova, Kwak, & Andras, 2010). The U.S. firm attempting to tap the large Russian consumer market needs to have a strategic marketing

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