FAVOUR BARUWA

MBA

BUS6100 MODULE 5 ASSIGNMENTS

Milestone 2 Demonstration of Favour-Favour Software LTD

7th January, 2024

pg. 0
 ORGANIZATION DESCRIPTION
Favour-Flavour Software Limited is a leading IT company that specializes in developing bespoke software for

mobile, web, and app platforms. Our wide range of software products includes consumer applications and

enterprise solutions for businesses, such as Standalone Applications, Websites & Web Apps, Mobile Apps, and

Embedded Software. We also provide consulting, training, and technical support services to our customers. Our

team is highly confident and enthusiastic about providing top-notch software solutions to companies worldwide.

We have established ourselves as key players in the global technological industry by delivering high-quality

software products, exceptional customer service, and outstanding user experience. We recognize that

international expansion requires careful consideration of various factors, and we are excited to continue

providing unmatched quality deliveries as we embark on this journey. We are committed to doing our due

diligence to ensure success always.

INNOVATION STRATEGIES

Our innovation strategy is a vital aspect of our organization's growth. It will involve everyone in our

organization, both the management staff and developers. We will brainstorm new ideas, implement novel

technologies, and devise effective ways to leverage existing systems. Our primary objective is to drive

improvements and create a competitive edge in the ever-changing tech landscape. By continuously innovating

our businesses to address challenges and meet customer demands more efficiently. This will, in turn, lead to

progress and growth, benefiting both our organization and its customers. (Katie Terrell Hanna, 2022)

Favour-Flavour would adopt the proactive, active, and reactive Innovation approach by:

 investing a lot of funds in research to gain a first-mover advantage, and become a technology market

leader. We will radically and incrementally achieve our breakthrough and continue to improve. We will

access knowledge from a broad range of sources and take big bets/high-risk strategies.

 We will also defend our existing technologies and markets while being prepared to respond quickly once

markets and technologies are proven.

pg. 1
  We will also apply the reactive incremental innovation strategy to our operation process while being

focused and observant we will embrace both high-risk and low-risk opportunities (Dodgson et al. 2008).

Foreign Direct Investments (FDI) Opportunities

From 2003 to 2008, US companies created the most foreign direct investment (FDI) projects while China and

India received the largest number of inbound FDI projects, mostly in the Information Technology sector. Larger,

less profitable firms tend to invest in countries with friendly business regulations such as Nigeria, even if

investor protection is minimal. These firms prioritize countries offering a simpler transition to doing business

rather than the level of governance infrastructure for investors. The return on assets is around 31.36% higher for

firms that participate in FDI, although not statistically significant. (Ayşe Yüce and Mauricio Zelaya, 2022).

Haven demonstrated a strong track record of success, a competitive advantage in the market, and a clear growth

strategy. Favour-Flavour Software LTD can easily integrate FDI (Foreign Direct Investment) into its Business.

This can be achieved by attracting foreign investors to invest in the company, partnering with foreign

companies, or expanding operations into foreign markets. This can help the businesses access new technologies,

markets, and resources, as well as gain a more competitive edge. Hence, we will network with potential foreign

investors, explore investment opportunities in foreign markets, and seek guidance from experts in international

business and investment.

OUTLINE POTENTIAL CHALLENGES

1. Economic Challenges: These include the Dependency on Foreign Capital, Risk of capital flight, and

Vulnerability to global economic conditions, exchange rate fluctuation, Impact on Local Industries and SMEs:

Competition with foreign companies, Displacement of local businesses (KATE, 2023)

pg. 2
2. Socio-cultural Challenges: such as Cultural Clashes and Social Disruption, Differences in work culture and

practices, Impact on local traditions and values, Inequality, and Social Stratification, Unequal distribution of

wealth and resources, Increased income disparities

3. Political Challenges: such as Sovereignty and Control, Loss of control over key industries and resources,

Potential interference in domestic policies, Political Instability and Corruption, Potential for increased

corruption and rent-seeking behavior, and Political backlash and resistance to foreign influence (Ella, 2021)

OUTLINE RISK MITIGATION

1. Pre-Investment Stage: These includes a Comprehensive due diligence in Assessing political and regulatory

risks, Evaluating market and financial risks, Building strong relationships with local partners, Local market

knowledge and expertise and Mitigating cultural and communication challenges

2. Legal and Regulatory Framework: Understanding local laws and regulations, Compliance with foreign

investment laws, Adhering to labor and environmental laws, Engaging legal experts, Navigating complex legal

systems, and Ensuring proper contract drafting and review.

3. Political and Economic Stability: Assessing political stability, Monitoring political, developments,

Evaluating government policies and stability, Evaluating economic factors

1. Assessing economic indicators and trends, Understanding currency and exchange rate risks.

4. Risk Insurance and Hedging Strategies: Investment insurance, Political risk insurance, Currency risk

insurance, Hedging against financial risks, Currency hedging, Interest rate hedging.

5. Operational Risk Management: Building a robust risk management system, Identifying and assessing

operational risks, Implementing risk mitigation strategies, Ensuring supply chain resilience, Diversifying

suppliers and markets, Establishing contingency plans (Thomson, 2021)

pg. 3
 BENEFITS OF FOREIGN DIRECT INVESTMENTS.

1. Economic Benefits: this includes Job Creation and Employment Opportunities, Direct employment in

foreign-owned companies, Indirect employment in supporting industries, Technology Transfer and Knowledge

Spillovers, Access to advanced technologies and expertise, Increased innovation and productivity.

2. Infrastructural Development: This includes Investments in Infrastructure Projects, 1. Transportation

networks (roads, ports, airports, Telecommunications and energy systems, Improvement in Public Services,

Education and healthcare facilities, Access to clean water and sanitation

3. Financial Benefits: this includes, Capital Inflows and Foreign Exchange, Injection of capital into the host

country's economy, Strengthening of foreign exchange reserves, Increased Tax Revenues, Corporate taxes and

other levies, Funds for public investment and social welfare programs

CONCLUSION

FDI can benefit the host country and the investing company by boosting economic growth, enhancing exports,

increasing employment opportunities, and diversifying the economy. It can also facilitate the transfer of

technology, knowledge sharing, and innovation, as well as contribute to infrastructure development and

improve access to capital and markets. Governments must implement effective policies and regulations to

maximize the benefits and minimize potential drawbacks of FDI. Overall, FDI plays a vital role in global

economic integration and offers opportunities for mutual growth and development.

pg. 4
 REFERENCE

Katie Terrell Hanna, (2022) IT innovation,

https://www.techtarget.com/searchcio/definition/IT-innovation#:~:text=Information%20technology%20(IT)
%20innovation%20in,technology%20initiatives%20and%20business%20goals.

Dodgson, Mark, Gann, David and Salter, Ammon. (2008). The Management of Technological Innovation:
Strategy and Practice. Completely rev. and updated. Oxford: Oxford University Press.
https://www.business.qld.gov.au/running-business/growing-business/becoming-innovative/strategy/
types#:~:text=Innovation%20strategies%20can%20be%20classed,2008).

BUS6001Module 5 (2024) : Learning about FDI Self-Activity

https://nexford.instructure.com/courses/4182/pages/module-5-learning-about-fdi-self-activity?
module_item_id=165509

Ayşe Yüce and Mauricio Zelaya, (2022), Nexford Learning Solution 2022, Foreign Direct Investment Decisions
of Multinational Companies.pdf
https://nexford.instructure.com/courses/4182/pages/module-5-learning-about-fdi-self-activity?
module_item_id=165509

pg. 5