Natuzzi Thailand Relocation Essay

1914 Words 8 Pages
Suppose you are asked to come up with a (re)location strategy for Natuzzi, resulting in a top-3 of most preferred (direct) investment locations. Which factors should/would you consider and why? At which top-3 of countries would you arrive? Use the information in the exhibits (and possibly information that you find yourself) to motivate your answer.

Investors will tend to take into consideration some important factors before deciding to invest in a foreign country. These factors may vary between the function and efficiency of local market, trade policy and privatization policy, the rules and regulations pertaining to the entry and operations of foreign investors (1)
Considering the fact that firms which engage in FDI face different
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The FDI inflows in Thailand are one of the best in the region.

Natuzzi will have to face a second mover advantage as other companies already went to Thailand themselves so will be easy to learn from their mistakes. From 1990, Thailand has began a financial system liberalization which included policies designed for facilitating capital flows and also making the markets more attractive.(bio) The Thai Government also took some measures like liberalization of capital movements, foreign-exchange controls and encouragement of exports that resulted in portfolio investment and a more attractive market. . Something that can be seen as a disadvantage is the fact that there are numerous non-tariff barriers that add to the cost of trade. Although FDI is well seen by the government, the former prohibits majority foreign ownership in many sectors and also the lack of transparency and efficiency in the investment sectors may be seen as an obstacle that Natuzzi has to overcome. (2). Thus, in 2000, the Board of Investment adopted a new FDI measure which changed the foreign shareholding to 100% , requests evidence of performance in order to be able to claim investment incentives and also reduced the debt – equity ratio from a previous 4:1 to a better 3:1. (3)

Thailand’s infrastructure is good and offers easy access both on air or on sea, having 7 international

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