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Foreign Direct Investment in the United States

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Samantha McMichael

on 2 May 2014

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Transcript of Foreign Direct Investment in the United States

Canon U.S.A.
Headquartered in Melville, NY
Established in 1955
USA CEO is Joe Adachi
Over 20 sales, support, and offices in the U.S.
19,100 employees in U.S.
Canon
Thomson Reuters
Samsung Plant Austin, TX
Samsung electronics is a subsidy of the conglomerate Samsung group that was started in 1969
Known in America for their phones, notably the Galaxy line, but they produce many electronics
Samsung's FDI in the U.S. started in 1998. Their first semiconductor plant in Austin, TX.
Since the plant opened Samsung has poured over $15 million into Texas. They are the state's largest foreign investor and one of the largest in the entire country.
The plants in Texas employ over 2,500 Americans.
Samsung
IKEA
Overview:
Swedish Company founded in 1943 by Ingvar Kamprad
Headquartered in the Netherlands
CEO: Mikael Ohlsson
Modern architectural designs
Eco-friendly
349 Stores in 43 countries
Foreign Direct Investment in the United States
Nick Gillen
Elliot Stone
Rachel Adams
Chris Albin
Sammi McMichael
What is it?
FDI are the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor or by spreading their own company's operations into a foreign land.
There are many mutual benefits that foreign companies and countries can share through FDI.
The U.S. is one of the largest recipients of FDI because of their "super-economy" status.
there are many debates as to how much control U.S. government should plance on FDI into their country.
Foreign Direct Investment
Audi AG
Background:
Headquartered in Germany
Majority owned by Volkswagen Group since 1966
73,751 employees worldwide as of 2013
These companies and thousands more have provided millions of jobs and billions of dollars in revenue and taxes to the American economy
Synergy is created when foreign and domestic firms work together
Competition fuels innovation
The world is becoming more unified, by excluding others we also exclude ourselves​​
Conclusion
Benefits to the U.S.
Samsung being in America not only helps create jobs and revenue, but it has helped American companies become more profitable than they would have been alone
Samsung Competition
Even though Apple is one of Samsung's most bitter competitors, they are one of Samsung's best customers.
One plant in Texas manufactures exclusively for Apple.
Google and Samsung also have a close relationship.
Without the Galaxy Platform, the Android operating system would not have reached the popularity it has received.
What do they do?
Provide convenient & reliable financial information and news around the globe.
Provide services to simplify and enhance daily activities performed by businesses and business professionals.
Publishes business and professional information through: magazines, internet, e-book, ect.
History
Created when Reuters Group & The Thomson Corp. merged together.
The Reuters Group was founded by Paul Reuters in London in 1851.
Paul utilized the newly innovated telegraph to transfer financial information that was highly accurate and fast.
Ability to innovate and efficiently communicate news information impressed consumers.
Reuters continued to innovate and acquire many companies until its merger with The Thomson Corporation in 2008.
Competition- Bloomberg Inc.
Private company started by Michael J. Bloomberg (former mayor of NY) in 1981.
U.S. Company
Recently just passed Thomson Reuters in terms of market share, 33.44 and 33.05 respectively.
Offers similar services toThomson Reuters .
Able to raise $7.8 billion in revenue with 13,000 employees vs Thomson Reuters $7 billion over 25,000 employees.
Gained market share and competiveness through proper structuring and optimization and utilization employees.
FDI in the U.S.
Thomson Reuters has provided countless jobs and helped the U.S. to decrease unemployment rates.
Billions of dollars in revenue.
Top of the line innovations contributed to the industry of professional services.
Domestic Competition
Thomson Reuters & Bloomberg Inc. make up over 60 percent of the market share.
There are many other small contributors to the market.
Thomson Reuters Slip
Thomson Reuters may have tried to grow too quickly with their merger in 2008.
They merged during the 2008 U.S. Recession.
Failed to strategize their structure for 60,000 employees in over 100 countries.
Failed innovative products such as the Eikon. This hurt most during times of economic downturn.
Thomson Reuters must restructure, optimize employment numbers to revenue, and differentiate products to compete with Bloomberg Inc.
Thomson Reuters struggles to structure and optimize should not down play their contributions to U.S. economy through foreign direct investment.

They have continued to provide invaluable benefits to the economy and their situation could quickly be turned around.

Opportunity from their contributions should not be strictly governed.
FDI Beneficial to U.S.?
"Foreign investment increases the amount of capital--equipment, buildings, land, patents, copyrights, trademarks, and goodwill--in the host economy."

-Mack Ott
Canon's Corporate Philosophy
Kyosei:
"All people, regardless of race, religion, or culture, harmoniously living and working together into the future."
Canon has established it will work and help anybody across the globe.
Canon by the Numbers
Main offices located in 5 different countries
Employs over 194,000 people worldwide
Sales over $35,500 Million worldwide
Canon FDI Sales by Region
Canon has sales of $10.4 billion dollars in the U.S.
The FDI by Canon is very beneficial to the U.S.
Sales in the U.S. are almost even to their other majority countries sales.
The Sales in the U.S. create a stiff competition between other companies.
Innovation
Competition
Foreign company, Canon generated half of the total sales that U.S. company, Xerox generated within the U.S. in 2013.
Manufacturing Plants
Employment
Audi AG vs General Motors
Is FDI Beneficial?
Competitiveness improved technology
Foreign labor is cheaper than U.S. Labor
FDI in U.S.
IKEA partnered with Car Charging Group Inc., an American company headquartered in Miami Beach, FL.
Provide electric car charging stations at the U.S. IKEA locations.
The two companies teamed up to provide and promote eco-friendly alternatives.
Partnerships
FDI in U.S.
Acquisition
IKEA invests in Wind
IKEA purchased wind farms in Illinois
Apex Clean Energy will oversee construction and operations
FDI in U.S.
Monetary
3 new stores
Warehouse expansion in Detroit
6,000 new jobs for U.S. citizens
U.S. Competition
Ashley Furniture Homestore is IKEA's biggest U.S. competitor
IKEA provides more jobs to U.S. citizens
IKEA provides a cheaper alternative
IKEA Embraces Open U.S. Market
38 stores in U.S.
Jobs for Americans
Low cost products
Gives business to American companies
U.S. Benefits Foreign Investors
World's largest consumer market that contributes to growth.
Exceptional opportunities to expand and grow their own business.
Impressive return potential by providing capital to American markets.
Some of the most skilled and dedicated workers of the world that develop profiting innovations.
Benefits to U.S. Economy
In 2012 FDI accumulated to about $2.7 trillion, or 16% of GDP
They also provide for about 5.6 million jobs for Americans, that averages out to 77,000 per job
By executing business on a global level the U.S. can protect there powerful economic status because they remain innovative, competitive and knowledgeable of the world around them
Consider This:
It is clear that benefits of engaging in FDI are attractive to both sides
These benefits are important in keeping the U.S. from becoming secluded from the world and falling behind
The world economy is driven through innovation and competition
To protect U.S. superstar status government should allow for an approach that is considerably control-free
This control free approach will keep the U.S. economy fierce through respectable growth, lower unemployment and continuous innovation
It will also provide great potential investing companies of the world
Full transcript