3. If production must be globally coordinated, will Visions have amajor problem? Why or why not?

2. Here Comes the CompetitionThe Wadson Company is a management research firmheadquartered in New Jersey. The company was recently hired by alarge conglomerate with a wide range of products, ranging fromtoys to electronics and financial services. This conglomerate iswilling to spend up to $2.5 billion to buy a major companyanywhere in the world.One of the things the research firm did was to identify theamount of foreign direct investment in the United State byoverseas companies. The research group also compiled a list ofmajor acquisitions by non-U.S. companies. It gathered these data toshow the conglomerate the types of industries and companies thatare currently attractive to the international buyers. “If we knowwhat outside firms are buying,”the head of the research firm noted,“this can help us identify similar overseas businesses that may alsohave strong growth potential. In this way, we will not confine ourlist of recommendations to U.S. firms only.” In terms of directforeign investment by industry, the researchers found that thegreatest investment was being made in manufacturing (almost$100 billion). Then, in descending order, came wholesale trade,petroleum, real estate, and insurance.On the basis of this information, the conglomerate has decided topurchase a European firm. “The best acquisitions in the UnitedStates have already been picked,”the president told the board ofdirectors. “However, I’m convinced that there are highly profitable enterprises in Europe that are ripe for the taking. I’d particularlylike to focus my attention on France and Germany.”The board gavethe president its full support, and the research firm will beingfocusing on potential European targets within the next 30 days.Source: Hodgetts, R.M. & Luthans, F. (2012) International Management, McGraw-Hill.Questions: (50%) 1. Is Europe likely to be a good area for direct investment duringthe years ahead?

3. If production must be globally coordinated, will Visions have amajor problem?
Why or why not?

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