Key Success Factors for Foreign Direct Investment (FDI) (PDF)

International expansion present new opportunities for companies to generate extra value added and have become a vital aspect of corporate strategy development and implementation. Nowadays most European Foreign Direct Investments (FDI) within European continent outflows towards Eastern Europe in the countries like Hungary or Czech Republic. Each nation-state will have some competitive advantages. Why should non-for-profit company like RFH choose to enter just Bosnian market, the country which was destroyed by the war a few years ago and where progress is still needed in many areas and not some of markets mentioned above? Which special strategic and legal issues non-for-profit organisation must consider in such case? Why choices of investment locations, mode of entry and initial pricing strategy have critical impact on value added to the firm's competitive advantage?
This report will give answers on these and further arising questions. It concerns Information technological (IT)-Centre of one German non-for-profit organisation (RFH), and its attempts to benefit of global capital while diminishing the negative effects of economic swings in the home country. On studying and analysis of the literature relevant and reliable sources of information, to invest in Bosnia and Herzegovina in the vocational training and educational sector is nowadays moreover absolutely a recommendable commercial decision. All economic indicators argue for it. The analysis determinate four main reasons for it:
Improvement of vocational Training and Adult Training sector is one of the emergent sector priorities settled in governmental Poverty Reduction Strategy Paper and European Commission Feasibility Study as a precondition for cooperation between EU and Bosnia.
Local competition in the area of Vocational and Adult Training is extremely weak (currently there are existing only 2 private companies similarly to RFH).
Bosnian market offers enough potential customers which may use Vocational and Adult Training offers. These customers are local industry as well as students, scholars and unemployed people (Rate of unemployment in Bosnia amounts to 43%).
A row of investment incentives and financial incentives are offered by European Union (EU), Bosnian government and Germany they reduce risks of FDI in Bosnia.