an MNE establishing a 100% owned Greenfield factory in thailand to manufacture compact sedans for australian and south east asia

Undergraduate
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Finance & Accounting
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Country Analysis: Thailand Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name (28, August, 2011) Introduction It is essential to conduct a thorough country analysis before investing even a small amount in any country…

Introduction

In this essay we will conduct an investment analysis of Thailand. We will discuss political risk, social risk and economy risk of Thailand. All the discussion will help an MNE that is trying to establish a 100 percent owned Greenfield factory in Thailand to manufacture compact sedans for Australian and South East Asian customers. There are many factors that can affect the decision of the MNE and all these factors will be discussed in great detail. Political Risk of Thailand Thailand is a country where political institutions are not as strong as in the developed world. The country has had many constitutions, 17 to be exact. This shows the political volatility of the country and this can be a problem for any MNE. Political stability is very important in order for any factory or production unit to work properly. MNE would have to employee local people and they will only be able to come to factories when there will be peace and stability in the country. Thailand has serious political risk and MNE should take this into account from starting its factory in the country. The country has seen many governments from 1997 to 2011. In 2006 there was a military coup in which military consumed power and dissolved government (MSNBC, 2006). Around a whole year the country was ran by military and politics was banned. This is the reality of the political risk of the country. ...
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