Foreign direct investment (FDI)

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International Business
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Executive Summary
Foreign direct investment (FDI) is not a new concept, and many international companies are
interested in FDI in markets with new business growth opportunities. The present study focussed
on the UK-based retail company, Vera, which is a fashion and homeware retailer that has
decided to go with FDI. The company is considering investing in the Indian retail market and
setting its distribution network as a value perspective.
The current study proposes that Vera should consider FDI policies for India, as well as the norms
and regulations of the market, to operate successfully and meet anticipated objectives. The retail
industry of India is large and significantly contributes to economic growth; it is expected that the
retail market will develop even further in the near future. Vera should consider various legal
norms, such as corporate tax and trade policies, and risks, such as competitors and market
structure, to ensure positive investment results.
This study includes Political, Economy, Social, Technology, Legal, International, Environmental
and Demographics (PESTLIED) and Strengths, Weakness, Opportunities and Threats (SWOT)
analyses to determine whether the Indian retail market is suitable for Vera as a direct investment.
The joint venture method is suggested as a suitable mode of entry because it would save costs
and easily target existing suppliers that could provide support while the company establishes a
strong distribution network. Additionally, FDI inflow to the Indian retail market has increased,
and more international companies are expected to invest in this market. It presents positive
opportunities for Vera too to invest in Indian market and set distribution channel in the targeted
market. Therefore, it is recommended that Vera directly invest in the retail sector of India to
increase its business borders. 
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Table of Contents
1. Introduction................................................................................................................................. 5
2. Statement of the scope and opportunity of investment............................................................... 5
3. PESTLIED Analysis................................................................................................................... 6
3.1 Political ................................................................................................................................. 6
3.2 Economic .............................................................................................................................. 7
3.3 Social..................................................................................................................................... 7
3.4 Technology ........................................................................................................................... 7
3.5 Legal ..................................................................................................................................... 8
3.6 International .......................................................................................................................... 8
3.7 Environmental....................................................................................................................... 8
3.8 Demographic......................................................................................................................... 8
3.9 Summary Findings................................................................................................................ 9
4. Industry Analysis........................................................................................................................ 9
4.1 Buyer power.......................................................................................................................... 9
4.2 Bargaining power of suppliers.............................................................................................. 9
4.3 Threat of substitute ............................................................................................................. 10
4.4 Threat of new entrants ........................................................................................................ 10
4.5 Competitive rivalry ............................................................................................................. 10
5. SWOT Analysis........................................................................................................................ 10
5.1 Strengths ............................................................................................................................. 10
5.2 Weaknesses......................................................................................................................... 11
5.3 Opportunities..............................................................................................