3 6 I E E E S O F T W A R E P u b l i s h e d b y t h e I E E E C o m p u t e r S o c i e t y 0 7 4 0 - 7 4 5 9 / 0 5 / $ 2 0 . 0 0 © 2 0 0 5 I E E E Adopting agile practices is a process of con- tinuous learning and improvement. The tran- sition required hard work, intense focus, and strict discipline. As a team, we discovered many things about ourselves, our process, and our products. Every discovery revealed a bet- ter understanding of what it takes to success- fully deliver software at a sustainable pace. By telling our story, we hope to help others in the software industry successfully transition to agile development. The time is right for the software development community to improve its historically low success rate, and agile de- velopment might provide the answer. Starting down the agile path People assume that a company that designs and builds project management software has all the knowledge and tools necessary to con- tinuously perform software development flaw- lessly. The truth is, we struggle just like every- one else. Primavera has its roots in construction and engineering. Our culture supported the com- monly used waterfall development approach, and the development team worked hard over the years to distribute high-quality releases to a growing, diverse market as quickly as possi- ble. The team followed the typical cycle, which usually resulted in working late nights and weekends in an attempt to finish projects on time. Primavera’s project managers typically used a command-and-control philosophy—a few people, usually those farthest from the action, made the decisions without directly involving the developers doing the actual work. Further- more, relationships between the development team and other departments began to deterio- rate because expectations were seldom ful- focus 1 Primavera Gets Agile: A Successful Transition to Agile Development P rimavera Systems provides enterprise project portfolio manage- ment solutions that help customers manage their projects, pro- grams, and resources. Our development organization employs 90 business analysts, programmers, testers, documenters, and project managers. When we decided to improve how we build software and in- crease the quality of life for everyone on the team, we found our answer in agile software development. adapting agility Bob Schatz and Ibrahim Abdelshafi, Primavera Systems Primavera’s development team is a model for others looking to adopt agile processes. Learn how to deliver high- quality software while improving your team’s quality of life. filled. So, in conjunction with a leadership change in 2001, we took a hard look at the many issues we had to resolve with respect to the organization, its people, and its processes. In particular, we had to improve the com- pany’s perceptions of its own development team, and the team itself had to reduce its deep-rooted dependency on the organizational hierarchy and break down functional silos with.

1. 3 6 I E E E S O F T W A R E P u b l i s h e d b y t h e I E E
E C o m p u t e r S o c i e t y 0 7 4 0 - 7 4 5 9 / 0 5 / $ 2 0 . 0 0
© 2 0 0 5 I E E E
Adopting agile practices is a process of con-
tinuous learning and improvement. The tran-
sition required hard work, intense focus, and
strict discipline. As a team, we discovered
many things about ourselves, our process, and
our products. Every discovery revealed a bet-
ter understanding of what it takes to success-
fully deliver software at a sustainable pace.
By telling our story, we hope to help others
in the software industry successfully transition
to agile development. The time is right for the
software development community to improve
its historically low success rate, and agile de-
velopment might provide the answer.
Starting down the agile path
People assume that a company that designs
and builds project management software has
all the knowledge and tools necessary to con-
tinuously perform software development flaw-
lessly. The truth is, we struggle just like every-
one else.
Primavera has its roots in construction and
engineering. Our culture supported the com-

2. monly used waterfall development approach,
and the development team worked hard over
the years to distribute high-quality releases to
a growing, diverse market as quickly as possi-
ble. The team followed the typical cycle,
which usually resulted in working late nights
and weekends in an attempt to finish projects
on time.
Primavera’s project managers typically used
a command-and-control philosophy—a few
people, usually those farthest from the action,
made the decisions without directly involving
the developers doing the actual work. Further-
more, relationships between the development
team and other departments began to deterio-
rate because expectations were seldom ful-
focus 1
Primavera Gets Agile:
A Successful Transition to Agile
Development
P
rimavera Systems provides enterprise project portfolio manage-
ment solutions that help customers manage their projects, pro-
grams, and resources. Our development organization employs
90
business analysts, programmers, testers, documenters, and
project
managers. When we decided to improve how we build software
and in-
crease the quality of life for everyone on the team, we found our
answer in
agile software development.

3. adapting agility
Bob Schatz and Ibrahim Abdelshafi, Primavera Systems
Primavera’s
development team
is a model for
others looking
to adopt agile
processes. Learn
how to deliver high-
quality software
while improving
your team’s quality
of life.
filled. So, in conjunction with a leadership
change in 2001, we took a hard look at the
many issues we had to resolve with respect to
the organization, its people, and its processes.
In particular, we had to improve the com-
pany’s perceptions of its own development
team, and the team itself had to reduce its
deep-rooted dependency on the organizational
hierarchy and break down functional silos
within the department.
We started by identifying and then syn-
chronizing the vision and values driving our
initiatives. We set out to be a world-class de-
velopment team, focused on our customers
and recognized within industry not only for
our products but also for how we developed

4. them. We also hoped to create an environment
where we could learn and grow, explore our
creativity, and have fun.
Changes made in the first year positively af-
fected the team and started to repair relation-
ships in the company. We also moved into a
new office space, which for many symbolized a
new beginning. We began working on team
building, learning how to work better across
functional teams. We also enforced a set of
shared values using the Fish! Philosophy to help
establish desired behaviors.1
Everything we did moved us one step closer
to our vision, but several nagging questions re-
mained: Why do software development pro-
fessionals repeat the same ritual over and over
again with the same painful results? Why do
we push ourselves to exhaustion, working 18-
hour days, seven days a week, to deliver soft-
ware that many users don’t really appreciate?
Why do we repeatedly lead people down that
same path?
Despite the changes we’d made, following
the development of a software release in
March 2003, we realized it was time for a
more significant change. After working to ex-
haustion, we celebrated our victory, thinking
we had delivered a great release. Then we dis-
covered a different perception outside of de-
velopment—others thought the release lacked
features and had quality issues and usability
problems. This resulted in feelings of frustra-
tion, disappointment, and apathy for the de-

5. velopment team. We needed to be able to up-
date priorities and features on the basis of
shifting market needs, and we needed to get
more people involved in the development
process. We needed to be agile.
Discovering and implementing
Scrum
Adopting an agile process began with our
willingness to take risks. We knew we might
fail, but nobody wanted to take on another
project using the current development process.
We started reading about iterative develop-
ment to get some ideas and found an overview
of a process called Scrum. It comprised a set of
project management principles based on small
cross-functional self-managed teams (Scrum
teams), 30-day iterations (sprints), and 40-
hour work weeks.
The process involves having each Scrum
team and product owner work together at the
beginning of each sprint to define the sprint’s
goals. The product owner, typically someone
from the marketing department, acts as the
product manager. He or she determines which
features must be implemented in a release to sat-
isfy the market needs. Additionally, each team
has a Scrum master who coaches the team
through the process and removes any obstacles.
Each day, the teams hold a 15-minute stand-up
meeting and each team member states his or her
accomplishments for the previous day and plans
for the current day as well as any obstacles pre-

6. venting the team from doing its work. The
Scrum master’s primary role is to remove such
obstacles, enabling the team to remain focused.
Each iteration concludes with a sprint re-
view, in which the team demonstrates its ac-
complishments to the stakeholders, product
owners, customers, and other department repre-
sentatives. The review provides an opportunity
to receive constructive feedback, which helps
shape and refine the product backlog.
Because Scrum acts as a wrapper around
existing development processes, it can work
with any existing methodologies you follow.
We felt it would complement rather than clash
with our culture, so the management team in
development met to discuss our chances of
success with agile and Scrum. We then went a
step further and called Ken Schwaber, one of
Scrum’s creators.2 After visiting our office and
learning more about our culture, Ken was not
only confident that Scrum could work for
us—he agreed to be our coach.
One of the first things we didn’t do was
start telling everyone that we planned to use a
new process. We didn’t want to make people
nervous or apprehensive, and we wanted to
give them time to adjust to the changes. Plus,
M a y / J u n e 2 0 0 5 I E E E S O F T W A R E 3 7
Because
Scrum acts

7. as a wrapper
around existing
development
processes, it
can work with
any existing
methodologies
you follow.
You need a
sponsor—
someone who’s
willing to put
everything on
the line and is
committed to
moving to agile.
3 8 I E E E S O F T W A R E w w w . c o m p u t e r . o r g / s
o f t w a r e
when you run around announcing your new
process and all its benefits, you can quickly set
unrealistic expectations.
Instead, Ken started by holding a workshop
for the entire development team, talking about
agile development and Scrum’s principles.
Then we held a training session to certify 15

8. Scrum masters.
Although we presented Scrum as the solu-
tion to our problems, reaction was mixed. Peo-
ple were uncomfortable with a change of this
magnitude, because they worried how their
roles and responsibilities would change. They
also questioned who would provide direction;
they wanted creativity and freedom but weren’t
necessarily ready to take on such responsibility.
Regardless of these concerns, we knew this was
the right thing to do and thus were committed
to making the necessary changes.
Tips for moving to agile
One of the first discoveries we made is that
you need a sponsor—someone who’s willing
to put everything on the line and is committed
to moving to agile. Someone has to stand up
to the critics, encourage the leaders, and com-
municate the team’s vision.
For anyone leading the transition to ag-
ile, here are some tips we learned from our
experience.
Use objective coaching. When undertaking a
significant transition, it’s extremely helpful to
get honest, objective feedback from an outside
source. Coaching helped enforce a learning
culture—we would iteratively learn new tech-
niques, try them, and see where we could im-
prove. When you “live” in the environment
every day, you can miss little things that make
a big difference.

9. Focus on teamwork. Teamwork and team
building are critical to establishing self-man-
aging teams. Team colocation is a real boost to
productivity. As managers learn to properly
delegate to teams, they should shift their focus
from tasks and assignments to team dynamics.
Teamwork is what makes agile work so well,
but getting teams to perform their best re-
quires a lot of attention.
Use the established agile language. Many or-
ganizations, in their efforts to adopt new tech-
niques, try to soften the blow by adapting the
language to something more familiar in the
culture. This could be a mistake when imple-
menting agile. Its language differs from what
we know and recognize in traditional develop-
ment, but using the new language forces peo-
ple to think in new ways and helps foster cre-
ativity. If you change the agile language to
match what was previously known, people
tend to slip back into their old ways.
Get executive support. Unlike other initiatives,
such as ISO and CMM (which often come in
a top-down directive from management), agile
is growing in a bottom-up fashion. Adopting
agile, or implementing any significant change,
requires an executive’s sincere support. It can
be a bumpy ride until things settle down, and
having executive support lets the learning take
hold despite any problems or failures.
Don’t work overtime. One of the key motiva-

10. tions for moving to agile is its ability to create
a sustainable pace for the development team.
The death marches must stop! We need to
quickly and firmly deal with software teams’
addiction to overtime. We can consistently de-
liver high-quality, complex systems without
working nights and weekends.
Learn to negotiate and set expectations. In ag-
ile, negotiation and expectation-setting are on-
going activities, because the team gathers feed-
back and demonstrates the product after each
iteration. Negotiation skills become critical as
team members learn to work with each other
and with developers outside the team.
Watch for trouble. Watch for subtle trouble
signs early in the adoption. As with any tran-
sition, people will always look for reasons to
return to what they know. Managers and lead-
ers must give positive reinforcement to keep
people in a learning mode. By continuously
trying new things, creativity will take hold and
team performance will rise.
Expect hard work. There is no silver bullet—
saying you’re agile doesn’t make you agile.
Despite what many might say, there’s no easy
answer to adopting agile. It requires a change
in how we work as an industry and will man-
ifest itself in different ways in every organiza-
tion. The best we can do is to learn from—and
continuously improve upon—our experiences.

11. A tool for managing the Scrum
project
Despite what people might think about ag-
ile, it requires discipline and strong project
management. In many organizations, project
management tools provide insight into a proj-
ect’s progress. Primavera provides a compre-
hensive suite for project portfolio manage-
ment, which we used effectively to manage our
first Scrum project. The suite’s Project Man-
agement module captured the release backlog
and represented each of its features as a top-
level Work Breakdown Structure element.
Then we created a resource team to represent
each Scrum team on the project. Figure 1 il-
lustrates the release backlog, captured in the
WBS View, along with a list of teams assigned
to each feature on the backlog.
At the beginning of a sprint, each Scrum
team selected individual features from the re-
lease backlog by assigning itself to the corre-
sponding WBS element. The Scrum team then
broke down each feature into detailed require-
ments and added them as lower-level WBS el-
ements. Team members then broke down each
requirement into multiple 8- to 16-hour tasks
and assigned themselves to these tasks.
At the end of each day, team members up-
dated the remaining work for each of their
backlog tasks using the lightweight, Web-based
Team Member module that we created (see Fig-
ure 2). They also used the tool to create and

12. modify assignments for additional features on
the release backlog. The tool fed the updated
remaining durations back into the release back-
log. As the team completed a feature or re-
quirement, the tool marked the corresponding
WBS element as complete in the release view.
The Scrum masters used the updated infor-
M a y / J u n e 2 0 0 5 I E E E S O F T W A R E 3 9
Figure 2. The Team
Member module,
showing the original
duration for each task
on the sprint backlog,
the developer
responsible for
completing the
task, and the task’s
remaining duration
at the end of each
day of the sprint.
Figure 1. A project’s
release backlog, as
displayed using
Primavera’s Project
Management module.
mation in the project to generate daily burn-
down charts for their teams. They also created
release burndown charts for the project, which
provided an up-to-the-day view of the project’s

13. process and its completed features. Figure 3
shows the release burndown report for the first
five sprints, captured inside the WBS view.
At the end of each sprint, the product own-
ers reviewed the release backlog’s priorities us-
ing the WBS view and adjusted priorities and
requirements as needed. The Scrum teams be-
gan their next planning session, assigning them-
selves to the revised release backlog’s highest-
priority items.
Measuring our success
In a Scrum environment, it’s often difficult
to measure your success against a predeter-
mined plan because Scrum lets business own-
ers adapt and change their plan every sprint.
However, measuring Scrum’s impact based on
product quality and time to market was easy.
We experienced a 30 percent increase in
quality as measured by the number of cus-
tomer-reported defects in the first nine months
following the release—0.36 defects per KLOC
for this release versus 0.51 in the previous re-
lease. In addition to providing our customers
with a higher-quality release, the reduced num-
ber of reported defects allowed us to focus on
the next release rather than addressing exist-
ing issues.
Implementing Scrum on this project also
improved our time to market. We had planned
to deliver two parallel releases in a risk-loaded
14 months. The flexibility that Scrum provides

14. enabled the product owners to adjust to mar-
ket conditions and consolidate the two releases
into one backlog containing the highest-value
items from both releases. We delivered this
combined release four months early. Had we
followed our traditional development process,
working on the two releases separately, we
couldn’t have changed course midstream to de-
liver one release with the combined feature set.
The true benefits of adopting Scrum on this
project, however, go beyond measuring the
number of features completed during the re-
lease cycle. We gained many intangible benefits
as a development team and as an organization.
Benefits to the team
Scrum created a long-term, sustainable pace
for the development team while significantly
improving the work environment. During the
project’s entire development cycle, the team
never worked overtime or weekends. Addi-
tionally, developers got to work outside their
roles to help their Scrum team achieve its
sprint goals. This teamwork made the work
environment more enjoyable for the develop-
ers and helped build trust between them,
which is fuel for high-performance teams.
Developers took ownership of the features
they created and took pride in showing their
work to the stakeholders during sprint re-
views. The teams also worked closely with the
product owners and consequently had a much

15. better understanding of their work’s impor-
tance and the business value of the features
they were implementing. The features’ design
and implementation ensured delivery of the
desired business value. Working closely with
the product owners and stakeholders gave de-
velopers more influence on the product and
what went into the release backlog.
Furthermore, there was no turnover during
this project’s 10-month release cycle. One devel-
oper, two weeks away from resigning to return
to his hometown, enjoyed the new work envi-
ronment so much that he put off leaving for
more than a year. The developers came out of
this project fresh and ready to work on the next
assignment; we started the first iteration of the
next release the day after completing this release.
Benefits to the business
Seeing slices implemented during each
sprint review made it easier for product own-
ers to focus on the highest-value items. In
4 0 I E E E S O F T W A R E w w w . c o m p u t e r . o r g / s
o f t w a r e
Figure 3. A release
burndown report for
the project’s first five
sprints.
many cases, seeing 50 percent of the feature

16. implemented was sufficient to meet the desired
business value and, as a result, the product
owner could either drop the remaining re-
quirements for that feature or reduce their pri-
ority in the release backlog. Also, rather than
passing their decisions through layers of man-
agement, product owners were able to work
closely with developers during the sprint.
Scrum also put the stakeholders much closer
to the work, because they saw the product
evolve during monthly sprint reviews. This
gave them higher confidence in the team’s abil-
ity to deliver specific value in the desired time-
frame. It also made them more aware of the
changing requirements on the release backlog.
Scrum didn’t necessarily give the stakeholders
more control of the release backlog, but it let
them provide more input to the product own-
ers early in the development process.
Obstacles encountered
Although our first release of Scrum was a
success, we did encounter a few problems
along the way.
A main principle of Scrum is to show only
“potentially shippable” increments at the sprint
review. In the earlier sprints, we noticed that
the teams were too eager to show their accom-
plishments during the sprint reviews and, in
some cases, showed features that were either
not fully tested or still had high-priority bugs
pending. Instead of addressing these issues at
the beginning of the following sprint, teams

17. were eager to pick new items from the release
backlog so they could show them at the fol-
lowing sprint review. Over time, the backlog of
bugs grew and many of the features, while hav-
ing impressive functionality built into them,
weren’t in shippable condition. We eventually
had to dedicate a full sprint to fixing bugs to
stabilize the product.
Another issue we encountered was focusing
on short-term deliverables and, in some cases,
losing sight of the code base’s technical infra-
structure and long-term maintainability. We
have a stable and extensible architecture, which
helped minimize this risk, but we need to make
sure not to neglect this in future releases.
Also, stakeholders were concerned with the
lack of metrics regarding the project’s projected
completion date. Stakeholders could clearly see
the progress made from sprint to sprint, but they
couldn’t tell how much work remained on spe-
cific features or how much work remained until
the release. Scrum can make it difficult to deter-
mine how far you are from release because, by
definition, the requirements change from sprint
to sprint. However, we could have better col-
lected data from the teams and created reports
for the stakeholders. The only report we gener-
ated was the release burndown, which didn’t
sufficiently communicate the remaining work.
Evaluating stakeholder feedback during
sprint reviews created additional challenges.
The stakeholders attended most sprint reviews

18. and provided valuable feedback, some of which
involved suggestions such as, “This feature
looks great, but it would really be nice if we
could also sort by this field.” Developers tended
to treat these suggestions as new requirements
for the following sprint review, even though
stakeholders generally didn’t expect them to
take the comments literally. In many cases, the
product owners weren’t even aware that these
items were being addressed. The lesson learned
was to be more disciplined about adding feed-
back to the product backlog so that the product
owners have final say regarding the priority of
these additional requirements.
W e’ve taken several steps to addressthese problem areas. First
of all,we’re stricter in enforcing all
Scrum practices. There aren’t many rules in
Scrum, but you need to adhere to the ones that
exist. We set clear criteria on what constitutes
a completed feature, and only features that fit
the criteria are shown to stakeholders at sprint
reviews. We also assisted teams in doing better
planning by helping them break out their
work at the beginning of each iteration into
truly shippable feature increments.
Furthermore, we gave priority to the code
base’s maintainability and extensibility by hav-
ing the product owners add technical mainte-
nance items to our current release backlog. We
then worked with them to prioritize these
items against the other features on the back-
log. This process ensures that infrastructure
maintenance items don’t get lost in the mix
and are addressed every sprint as part of the

19. overall release.
Finally, we’re currently reemphasizing the
good engineering practices we had in place prior
to using Scrum as well as reducing the number of
bugs introduced early on in the development cy-
M a y / J u n e 2 0 0 5 I E E E S O F T W A R E 4 1
There aren’t
many rules in
Scrum, but you
need to adhere
to the ones that
exist.
cle. To that end, we’ve started adopting some Ex-
treme Programming practices, such as test-driven
development and some pair programming. After
seven sprints of implementing TDD, our defect
count has dropped to less than 10 per team,
which represents over a 75 percent improvement
in defect rates relative to the previous release.
As a result of these improvements, the teams
can now be confident that they’re always only
one month away from a potential release—a
foundation of the Scrum development process.
The biggest lesson we learned from Scrum
is that, as a team, building software is a con-
tinuous learning process. We must have the

20. discipline to honestly assess what we’re doing
and not be afraid to make changes. By consis-
tently refocusing, we’ve been able to change
our process, step by step, and we continue to
make improvements every day.
References
1. S.C. Lundin, H. Paul, and J. Christensen, Fish!: A Re-
markable Way to Boost Morale and Improve Results,
Hyperion, 2000, p. 112.
2. K. Schwaber and M. Beedle, Agile Software Develop-
ment with Scrum, Series in Agile Software Develop-
ment, Prentice Hall, 2002, p. 158.
For more information on this or any other computing topic,
please visit our
Digital Library at www.computer.org/publications/dlib.
About the Authors
Bob Schatz is the vice president of development for Primavera
Systems, where he leads
the team that develops Primavera’s software solutions for
enterprise project, resource, and
portfolio management. His research interests are in managing
the development of large enter-
prise software systems. He received his BS in computer science
from Temple University and is
pursuing his MS in organizational dynamics from the University
of Pennsylvania. Contact him
at [email protected]
Ibrahim Abdelshafi is the director of programming for
Primavera Systems. He’s re-
sponsible for developing the architecture to support a

21. multiplatform, highly scalable product
that supports organizations around the world. His research
interests include scaling the agile
process to an enterprise development environment. He received
his MS from Carnegie Mellon
University and his MBA from the Wharton School at the
University of Pennsylvania. Contact him
at [email protected]
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Running Header: COCA COLA IN SOUTH KOREA
COCA COLA IN SOUTH KOREA
18
The project need to be checked all, as I said I need u to add the
monopolistic theory cut form greenfield to have words count ,
check everything in red and you will get what I need please …
Some citation doesn’t have full reference at the end in the

25. reference list so please check it and make sure the work is with
0 similarities so no plagiarism and I don’t have time so by
tonight I need the work plz max in 12 hours so I can check
before submit it
Foreign Direct Investment
Different large companies aim at expanding their business
operations into international markets. Therefore, these
companies explore different global market entry strategies.
Foreign Direct Investment is a global market entry strategy that
involves the company’s real investment (direct investment) into
the building or establishing a new plant in a foreign country to
strategically place itself in the new market while the core
investor retains full control over the investment (Sell, 2001).
The FDI has three major constituents: equity capital,
reinvestment earning and intracompany loans. Direct placement
of a company in a foreign market provides the organization with
new technologies, capital resources, products, management
skills from the diverse and skilled workforce, organizational
technologies and potential cooperation and get a larger share of
cross-border opportunities for the local businesses.(explain
what will you cover in this assignment :example:in this
assignmet I will cover theories of FDI, pollical risk, and
operating exposure)
Theory of FDI. ( cut the words of Greenfield investment as u
talked a lot about it keep the most relevant things and add the
monopolistic advantage theory as I only have Oli theory in the
assignment ,and I need another theory ,so add monopolistic
advantage theory speak about the most relevant things of this
theory what is used for, then how is related to my project in a
small paragraph plz )
There are two primary forms of FDI theories that have
continued to be applicable in the global business: Greenfield
investment and Brownfield investment. The Greenfield

26. Investment would best explain Coca-Cola's investment in South
Korea .It stipulates that multinational corporation enters into
the new international market and build new factories, plants, or
stores from scratches (Stepanok, 2012). In addition to the new
facilities, the project also encompasses building of new hubs for
distribution, offices and living quarters for staff members.
Many companies and businesses prefer Greenfield investment
because it is more cost-effective in the long run. They are also
interested in having a high degree of direct control over the new
foreign investment project (Stepanok, 2012). Greenfield is very
resourceful in guaranteeing companies entering the international
market of retained total control over the operations and
production. Moreover, multinational corporations use
Greenfield investment because of its ability to aid the
corporation into forming of marketing partnership to increase
its market effectiveness in the foreign country. Reference?
Strategically, the best way to enter into a new market is through
directly investing in that country from scratch. Greenfield
provides corporations with strategies of production and pricing
that allows the business to adapt to the new target market by
having a highly segregated market and customers according to
their demands reference?. Also, Greenfield, unlike the
brownfield investment where the corporation leases or
purchases existing production facilities to launch a product line
in the foreign market, provides the corporation with complete
ownership of any of its subsidiary firms to enable it to extend
its products to potential customers with attractive discounts,
warranties, among others (Watkins, 2002)?? Reference. Coca-
Cola Co. is among the US greatest firms that invest in the
significant global Greenfield projects. Thus, there is a robust
applicable background for the Greenfield to the project in South
Korea.
The two types of FDI used by many corporations are the
Vertical and horizontal FDI. According to Dlabay and Scott
(2011), horizontal FDI is where the corporate investment is
made for conducting the same business activities in a foreign

27. market as at the home country of that business. However,
vertical FDI is concerned with the expansion of a firm into a
series of production processes that differ from the original one.
In other words, different types of operations are carried out in
foreign countries (Dlabay and Scott, 2011). Coca-Cola company
uses Horizontal FDI; the benefit would be the existence of an
already established relationship between the parent and the
subsidiary firm who get the access product requirement from the
parent.(U CAN CUT FOR THIS VERTICAL AND
HORIZONNAL IF U NEED WORDS COUNT)
Another theory is “OLI” which stands for Ownership, Location,
and Internalization; three facets that determine the firm’s
decision to venture into Multinational business (Hoshino,
Turnbull and Ghahroudi, 2018). The Ownership advantage
concerns itself with the benefits specific to a nation and the
nature of the owners of the corporation. There are three major
categories of firm specific advantages that enable the MNE to
thrive in the market (Hoshino, Turnbull and Ghahroudi, 2018).
First, monopolistic advantage provides the MNC with the
privileged access to input and output resources in the market
through ownership of intangible assets. Second, technology
advantages broadens the firm’s scope of knowledge and
innovativeness in the market and lastly, economies of scale
advantage provides the MNE with a large scope of economies,
benefits from the international diversification of international
business risks and broaden the access to financial assets.
The Location advantage arises from the various locations that
the MNEs choice to be located that provide them with different
resources, essential institutions, and conducive regulations. The
location benefits vary from country to country. They mainly
exist in three forms; Economic ,Political, and Social advantages
(Wilson & Baack, 2012). Economic benefits relate to the quality
and quantity of factors of production provided by that particular
country’s economy such as market, production, transport and
telecommunication costs. Secondly, Political benefits instigates
those specific and general governmental policies that will affect

28. the cash flows of the FDI and international productiveness.
Lastly, social advantages revolves around the cultural and
language differences which could also be a barrier, attitude of
host country towards foreigners and the general beliefs towards
free enterprising. (reference )
Internalization advantage relates to the transfer of ownership
benefits across national boundaries against the edges of export,
licensing, joint venture strategies. This benefit arises from
difficulties in documenting controllable and enforceable
contracts to provide real market advantage through partnerships.
Internalization of MNEs is characterized by incremental
procedural process from domestic to higher global market
involvement because of limited local resources and
knowledge.(reference) (add this sentence but u need to
paraphrase it as I took it from my friend: The process helps to
evaluate the alternative ways in which firms might organize the
creation and the exploitation of the core competencies (word
economic)) .(Talk about the internalization theory and how is
related to OLI)
Application of FDI theory
The OLI theory is vital in explaining the business venture of
Coca-Cola in the South Korean Market. First, Ownership
advantage will potentially address the concerns over why some
corporations go international and present some of the Coca
Cola’s firm-specific privileges that will minimize the operating
costs abroad. Coca-Cola has a collection of (proprietary/firm-
specific)assets which is higher than average in the
industry(rephrase). These assets can be used in production
operations at different locations globally without any signs of
ineffectiveness reference?. For instance, the product
development, management structure, and marketing strategies
and skills of the company are it most valued assets something
termed as “headquarter services” (Helpman, Melitz and Yeaple,
2003). Location advantage addresses concerns on the exact
location in South Korea that Coca-Cola chooses to operate.
Related to this is the horizontal FDI which would be critical in

29. a plant located in South Korea to improve coca cola’s foreign
market access. Coca Cola’s horizontal FDI is facilitated by the
corporation’s secret formula for all its sodas and support for all
its brands globally with this ingredient. Internalization will
influence Coca-Cola’s choice to operate in the South Korean
Market, trading off savings in transaction activities, holding up
and monitoring costs involved in the wholly owned subsidiary
against the other modes of market entry. Notably, positive
changes have been reported over decades in the South Asia
relative GDPs and substantial difference in the restrictions on
FDI among these Countries (World Bank, 2018).
Coca-Cola continues to use the Greenfield approach to all its
global operations and investments. The company has
consistently maintained an intense adoration for full control
over its global investments (Stepanok, 2012). Also, Coca-Cola
is among the world greatest marketing companies that aim at
attaining economies of scale and scope for its products.
Therefore, Greenfield Investment would bring a significant
theoretical perspective of how Coca-Cola penetrates the global
market, specifically entry to the South Korean market. It would
enable the company continues to strive for economic
globalization.
South Korea is a better selection than any country because of
various components. First, the labor cost for the employees that
would work in the project would cost less(rephrase). Based on
the notion that Coca-Cola aims at maximizing profits and
reducing costs to edge it competitors in the market, such facets
would be important. In connection(RELATION) to this the
Korean MNEs approaches to Subsidiary firms provides a
hybridization through blending of locals and global standards in
the practice of human resource and its management. Secondly,
Korea has continues to have economic growth over the past few
years. According to the statistics Portal (2018), the revenue in
Food and Beverage sector in South Korea accumulates to
US$8,317M in 2018 with an expected annual growth rate of
4.9% thus expected to be US$10,057m by 2022. Thus, to share

30. in this growth the country proof suitable.
The South Korean wage per hour is adding up to an average
wage per month of 1382.92USD (Tradingeconomics.com, 2018).
The wage rate proves to be lower than the France and United
Kingdom’s wage rates of 1684.17 and 1645.20 USD per month
for the labor employed. As a result, South Korean market labor
costs cheaper and low salary. South Korea has heavily
integrated international trade and finance. After the economic
stagnation period, the country’s GDP growth rose slightly to
3.1% owing to household consumption, improvement in real
estate businesses and measures in both the fiscal and monetary
policies (Heritage.org, 2018).where is the full reference
Thus, to be profitable, Coca-Cola would have to venture into a
long-term commitment and prosper as the economy improves.
The company should commit to explore the major market
aspects that the South Korean venture presents. Due to the
presence of the parent countries exercise of control the
minimum transactional cost would significantly be less and
shared by the parent reference?. The Demand for the product of
the FDI would substantially increase because of the existing
market awareness of the product being brought in to the market
and the use of marketing to facilitate the product sales by the
parent company in South Korea reference?
THE FIRST PART NEED TO BE AROUND 1200 WORDS PLZ
NOT MORE
Political and country risk Assessment.what you wrote is all
good but put it as PESTEL analysis
What type of country is ?
Check the government risk again how it affect my company ?
President Moon continues to run in the frontline for support of
FDI activities in the country. Personally, the president implored
conglomerates to undertake investment activities back to the
home country as well to create more jobs for the state (Salmon,

31. 2018). In connection with the political and sovereignty risks,
the president has exceeded expectations in a summit with the
North Korean Kim Jong-un to yield an agreement that sought to
eliminate the risk of war and work in unison towards
denuclearization of Korea (Turak, 2018). Political risks such as
risks of foreign exchange shortages, revolutions, wars, arbitrary
government action have continued to decrease. The average
value of political risks of South Korea has continued to remain
at the minimum of 1 index point since 2014
(TheGlobalEconomy.com, 2018). All these are because of the
administration of the president.
President Moon Jae-in political move to replace the two key
economic officials in his administration amidst the pressure on
his administration on starting growth in the Asian economy
(Harris, 2018). Over the recent months, the economic aspects
have been on the first row of the South Korean politics with the
slowly growing job opportunities weighing down the approval
ratings of Pres. Moon. The president upon his election pledged
to create jobs and minimize the national inequalities
predominated by few wealthy conglomerates (chaboel).
Therefore the move to replace the finance minister and the
presidential chief of staff for policy focused on revitalizing the
trademark of “income-led growth” policy, a key concern for the
president (Harris, 2018). The political efforts are focused on
creating incomes, consumptions, and employment for the South
Korean population
The political move aimed at liberating the country from the
South Korean 4.6% unemployment rate, deflate the inflation
rate from the 1.94 % being experienced and create an
economically fair community. (where are the graphs)?? FOR
THIS PART
South Korea Government on FDI.
The government of South Korea is desirable for an FDI market
entry. The government has a well-established Foreign
Investment Promotion Act which provides protection as well as
restrictions for FDI.(cant be under l of oli paradigm???) The

32. President of South Korea has a great interest in establishing a
fair economy in the country. According to Harris (2018), the
president’s economic democracy initiative through the fair
economy aims at making the ordinary citizens, businesses from
small, medium and conglomerate well off in unison. Thus, the
government promotes foreign direct investments in the country
through guaranteeing external remittance, the similarity in
treatment as any other South Koreans enterprise, simplifying
procedures for commencement and existence of state mediator
position to FDI and providing for tax reliefs (Nordeatrade.com,
2018). All these works towards achieving the state goals.
The major challenge in the Korean economy is political risks,
transfer risk, war risks, and expropriation risks
(TheGlobalEconomy.com, 2018). Political risks are concerned
with export transactions on a credit period in the country. The
risk of expropriation covers any breach of FDI contract by the
Korean government or possible negative change in attitude
towards the foreign businesses. Transfer risks relate to an
economic consideration of the countries solvency, and war risk
refers to the looming tension that may precipitate to a brutal
violence.
Name the figures!!!!!
Add some references in this part
From the above figures, the South Korean economy has
recorded a progressive economic development over the few
years. The first figure shows the country’s GDP growth in USD
that has had progression based on the first and third quarter
annual reports. As of 2017, the GDP as at the third quarterly
was 394.6. This implies that the economy has consistent been
productive in both local and international market. Most
certainly the productivity and business nature of the country is
considerably rising and constant. The inflation rate must be

33. declining. The second figure shows how the average wage of the
country has changed over the years. There has been a slow but
progressive increase. Low average wage economically implies
that more potential workers are hired into organizations in the
country at least wage rates. As a result, the level of
unemployment declines, with the production cost. Most
certainly, the consistency in the cost of labor over the years
means that little of industrial unrests is expected. The third
figure shows FDI contribution to the GDP of South Korea. In
2017 statistics show a decline to 1.957 trillion (World Bank,
2018). The South Korean market and government policies has
promoted both in and out FDI operation with other international
MNCs. Thus, The FDI statistical data provides that the sector
has met a series of successes worth being part of.
Relations of the Political and country risks to Coca-Cola FDI.
The major significant concern for a corporation intending to go
international through the FDI strategy is the sovereignty risks
associated with the new target market or foreign country
(Dlabay, and Scott, 2011). Before the project proceeds to the
next phase’s scrutiny of the South Korean ability to meet its
public, domestic and external debt is important to estimate the
risk of default that the FDI may face. In addition to this, the
political risk of a political system that may affect the economy
is important. President Moon has been on the front line in a
fight to create an efficiently fair economy (Harris, 2018). The
association of the political policies and systems with the
economy poses a significant influence to the FDI in South
Korea. Any slight changes political perspective will expose the
new FDI to the risks of foreign exchange shortages, effects of
revolutions and arbitrary government action that will result in
losses.
The democracy of South Korea has continued to experience
challenges of poor governance, corruption, incompetent
leadership, political conflicts, volatile public opinion as well as
social polarization ("Political Challenges in South Korea,"
2017). The result of these challenges is the continued risk of the

34. transaction, transfer as well as other economic uncertainties.
The FDI project in South Korea will be exposed to all this kind
of economic policies, political factors as well as the social
culture in the country. As a result, what would make Coca-Cola
successful through its protection policies count be the doom to
its operations?(what is this question I don’t need questions in
the assignment .) Because the fear that the political regimes in
the South and North Korea government present to the worth
through their war weapons has built upon a nuclear tension that
could shutter down business operations any second. Such
pressures are innovation and investment killers.
Coca-Cola seeks to invest in an economically sustaining
environment, and any considerable risks could sabotage their
goal for global operations. The risk of expropriation would
affect the FDI in the case where the economy shifted, and
policies disfavor the activities of MNCs in the South Korean
market (Hoshino, Turnbull and Ghahroudi, 2018). Such risks
from the country may affect the overall performance of the FDI
as it poses to suppress the operations of foreign investments and
narrow their profits.
Operating Exposure Implications. Add some references in this
part
Economic or operating exposures have come one of the central
concerns for MNEs. South Korean economic growth has
globally landed it to the 11th most developed country. In the
midst of these increasing global economic development,
Currency volatility, shifting exchange rates subject a
considerable influence and impact on the company’s or
subsidiary’s operations and profitability in the foreign market
(Dlabay and Scott, 2011). There are important types of
exposures that result from currency volatility; translation

35. exposure, transaction exposure, and economic/operating
exposure. Economic exposure or competitive exposure or
strategic exposure measures the degree to which “any change in
the present value of a firm as a resulting from changes in the
future operating cash flows caused by the occurrence of an
unexpected change in exchange rates” (Eiteman, 2018). The
future market value of Coca-Cola could be subject to future
cash flows and market value uncertainty because of these
unexpected currency fluctuations. By December 31, 2015, the
South Korean won exchanged at 1169.26 against the USD,
1207.68 in 2016, 1063.11 by the end of 2017 and currently
stands by November 1, 2018, it was 1126.19 against 1USD
(Ycharts.com, 2018) where is the full reference?. These
statistical figures provide that the South Korean won has
experienced a significant fluctuation over the few past years. A
fact which could pose a threat to the economic value to the
Coca-Cola. However, the variation has changed more to the
positive side except in 2017.
In the long term, a substantial or anticipated change in the
exchange rate can affect the company’s competitiveness
significantly not only overseas but in the domestic market. This
is because the firm will sell its products cheaply in South Korea
in case of an adverse effect on the exchange rate the same
products they sell to other markets and local markets at a higher
price. The consumers or large scale buyers may prefer importing
the same product at lower prices from South Korea rather than
from The U.S. this would deteriorate the market value of the
company, the sales revenue as well as the competitiveness of
the company. Economic exposure affects Coca-Cola’s
competitive position. According to Reitman (2018), the
company’s profitability and operations are changed when the
home currency of the MNE strengthen making production more
expensive, yet the profit yielded are dismal and persistently
decreasing. Shareholders of the MNE are interested in the
wealth maximization and successfulness of the project in South
Korea may lead to further expansion and reinvestment in order

36. to stay in an economical advantage scenario. Thus, investing in
the South Korean market is advisable, but great consideration
for the market fluctuation, economic factors as well as political
factors are important.( REFERENCE)
ALL THE PROJECT SHOULD BE 2500 WORD PLUS 10%
PLEASE
Reference.
Dlabay, L. and Scott, J. (2011). International business. Mason,
OH: South-Western Cengage Learning.
EITEMAN, D. (2018). MULTINATIONAL BUSINESS
FINANCE. [S.l.]: PEARSON.
Harris, B. (2018). South Korea’s president replaces top
economic officials | Financial Times. [Online] Ft.com.
Available at: https://www.ft.com/content/53f5cb4c-e3f3-11e8-
a6e5-792428919cee [Accessed 13 Nov. 2018].
Helpman, E., Melitz, M. and Yeaple, S. (2003). Export versus
FDI. Cambridge, Mass: National Bureau of Economic Research.
Heritage.org. (2018). South Korea Economy: Population, GDP,
Inflation, Business, Trade, FDI, Corruption. [online] Available
at: https://www.heritage.org/index/country/southkorea
[Accessed 22 Nov. 2018].

37. Hoshino, Y., Turnbull, S. and Ghahroudi, M. (2018). Foreign
Direct Investment. Singapore: World Scientific Publishing Co
Pte Ltd.
Nordeatrade.com. (2018). Foreign direct investment (FDI) in
South Korea - Investing - Nordea Trade Portal. [Online]
Available at: https://www.nordeatrade.com/fi/explore-new-
market/south-korea/investment [Accessed 13 Nov. 2018].
Political Challenges in South Korea. (2017, April 6). Retrieved
from https://www.eastwestcenter.org/research/visiting-fellow-
programs/posco-visiting-fellowship-program/political-aspects-
of-korea-related-issues
Salmon, A. (2018). South Korea expands its investment
destinations. [Online] Atimes.com. Available at:
http://www.atimes.com/article/south-korea-expands-its-
investment-destinations/ [Accessed 13 Nov. 2018].
Sell, A. (2001). Foreign direct investment, strategic alliances
and the international competitiveness of nations. Bremen:
Institut für Weltwirtschaft und Internationales Management.
Stepanok, I. (2012). Cross-border mergers and Greenfield
foreign direct investment. Kiel: Institute for the World
Economy.
TheGlobalEconomy.com. (2018). South Korea Political risk,
long-term - data, chart |
TheGlobalEconomy.com. [Online] Available at:
https://www.theglobaleconomy.com/South-
Korea/political_risk_long_term/ [Accessed 13 Nov. 2018].
The Statistics Portal. (2018). Food & Beverages - South Korea |
Statista Market Forecast. Retrieved from
https://www.statista.com/outlook/253/125/food-
beverages/south-korea
Tradingeconomics.com. (2018). South Korea Total Wages |
2008-2018 | Data | Chart | Calendar | Forecast. [Online]
Available at: https://tradingeconomics.com/south-korea/wages
[Accessed 13 Nov. 2018].
Turak, N. (2018). Korean leaders plan an end to war and

38. 'complete denuclearization'. [Online] CNBC. Available at:
https://www.cnbc.com/2018/04/27/korean-leaders-release-
statement-promising-to-eliminate-risk-of-war.html [Accessed 13
Nov. 2018].
Watkins, C. (2002). Greenfields, Brownfields and Housing
Development. Real Estate Issues. Blackwell Publishing.
Wilson, R., & Baack, D. (2012). Attracting Foreign Direct
Investment: Applying Dunning's Location Advantages
Framework to FDI Advertising. Journal of International
Marketing,20(2), 96-115. Retrieved from
http://www.jstor.org/stable/23268748
World Bank (2018). Foreign direct investment, net inflows
(BoP, current US$) | Data. [online] Data.worldbank.org.
Available at:
https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?en
d=2017&start=2013 [Accessed 13 Nov. 2018].
World Bank (2018). Trends and Determinants of Foreign Direct
Investment in South Asia. [Online]
Openknowledge.worldbank.org. Available at:
https://openknowledge.worldbank.org/handle/10986/16522
[Accessed 13 Nov. 2018].
South Korea's FDI net Inflow from 2013 - 2017
FDI net Worth

39. 2013 2014 2015 2016 2017 2.1379999999999999
1.8440000000000001 2.4079999999999999
2.4369999999999998 1.9570000000000001
Years
FDI net inflow in Trillions USD
GDP of South Korea since 2013 - 2017
Q1 2013 2014 2015 2016 2017 296.7 312.20999999999998
326.61 343.44 358.81 Q3 2013 2014 2015 2016
2017 321.3 332.48 351.88 366.99 394.6
First and third Quarterly reporting 2013 - 2017
South Korea GDP in billion USD
Average wage
2013 2014 2015 2016 2017 33033 32840 33424 34555
35191
Marking Guidelines for FN380 Part 1 (30% of the overall mark)
Each student will need to choose an MNE (Multi National

40. Enterprise) with its head office in any country, providing the
financial statements can be accessed in English. You will then
form a business idea (the project) that involves setting up a new
enterprise in another country
Part 1 of the FN380 assessment accounts for 30% of the overall
mark. Students will be given an overall mark out of 100.
1c. Evaluate the operating exposure implications of the
proposed project from the MNEs perspective. (500 words)
Total word limit = 2,500 words.
The first part of the FN380 assignment will be marked
according to the following criteria:
Marking Criteria:
Marks will be based upon how well students have achieved the
following criteria:
MY COUNTRY IS SOUTH KOREA AND MY COMPANY IS
COCA-COLA
1a. Assess which theories of why companies invest in FDI are
useful in explaining why your MNE is investing in your chosen
country and project. (1,000 words).
· What is FDI (is key word of the all project) explain about it
and why you want to do (125words)
· Understanding and critical evaluation of the theory of why
companies invest in FDI.
The Theory is Green Field Investment: speak about it in General
, why companies use it , why I chose It ,then how it apply to my
project .
· Types of FDI: Vertical and horizontal in general then choose
one and say how does it influence my project And explain what
advantages will offer me.
THE other theory is OLI THEORY speak in general
(20 marks )
· Application of FDI theory to explain why the selected MNE

41. has invested in the chosen country and project .
So now we speak more about the theories (Oli how is related
to my project) and (Green Field how to apply and related to my
project , why I chose It ,then how it apply to my project .)
Then I speak more in detail about why I chose South Korea :
My project Production corporate taxes: use Green Field
Investment starting something new because they might don’t
want to share their profits or secret ingredient with other
factories, ( for example:if is not profitable they can produce it
there in South Korea and sell it somewhere where Coca-Cola is
in high demand USA for example). write about the aspects
which are:
· Cheap labour cost ,average salary for low skills. Compare it
with other 2 countries with higher wages per month to show
that your country is the best
· Promote in a long term commitment that’s mean give time to
the project because it can be not profitable from first year
· Transaction cost
· Demand : if the demand is increasing and not enough supply ,I
want to invest first and refer it with Green Field investment
The first part is 1000 words in total
(15 marks)
1b. Evaluate and summarise the political and country risks of
your project. (1,000 words)
· Thoroughness of the assessment of the political and country
risk of the chosen country.
Speak about the president what he did what does he achieved
General political things about the country ,find information in
FINANCIAL TIMES WEBSITE
Government of South Korea why is good or bad to attract FDI
WHAT IS GONNA BE THE RISK
Make some chart and explain it not copy from website u have
to make them in excel and copy them to Microsoft word but it

42. has to be same figures in the website.
GDP how is increasing/decreasing in the last 5 years 2013-2017
FDI net inflow
Average wages
And more relevant things about the pollical and country risk of
the country
(20 marks) 600-650 words
· Evaluation of how the political and country risk assessment
relates to the proposed project and MNE. Plz be critical not just
putting information need to focus on the main things.
(15 marks) 350-400 words
The political risk is 1000 words in total
1c. Evaluate the operating exposure implications of the
proposed project from the MNEs perspective. (500 words)
· Thoroughness of the evaluation of the operating exposure
implications of the proposed project.
(20 marks)
· Effective presentation of discussion and information; ability to
evaluate arguments, evidence and data; ability to locate, extract
and analyse data from multiple sources; acknowledgement and
Harvard referencing of sources.
(10 marks)
Total word limit 2500 words