Opening Premier Inn hotel in Mauritius Essay Example | Topics and Well Written Essays - 2000 words

Opening Premier Inn hotel in Mauritius - Essay Example There is also the strategy of wholly owned subsidiaries a form of foreign direct investment that includes acquisitions and the Greenfield investment. The Greenfield investment is preferable if there are no competitors in Mauritius and it is a high-risk strategy. In addition, the hotel can consider acquisitions since it is a technique that can help to actualize higher human potential. It also contributes to lower risk than most of the entry models (Hill, 2014). The best design for the hotel is Foreign Direct Investment by procuring land, plant, and workforce in the host country. The hotel can set up a subsidiary that is wholly owned in the country by establishing a branch from the ground. In doing so, the hotel will be using the Greenfield strategy; on the other hand, it can also acquire a plant in the target foreign market (Hill, 2014). The hotel will experience significant benefits in the acquisitions. Firstly, purchases are quick to execute. The hotel should acquire an already established enterprise in Mauritius, by doing so it can quickly build its presence in a foreign target market. Therefore, the Premier inn hotel should do the same (Razin and Sadika, 2007). Secondly, the hotel should make acquisitions as a tool to pre-empt competitors since in Mauritius there are many investors in the hotel industry. The need for the pre-emption is especially prominent in markets that are rapidly globalizing. Thirdly, managers of the Premier inn hotel may view acquisitions as less risky than a Greenfield venture. Practically when the hotel purchases another hotel in Mauritius, it buys a number of assets that generate a known profit stream and revenue. On the contrary, the profit stream and income produced by a Greenfield venture is indeed uncertain simply because it does not yet exist. Acquisition made at the Premier Inn hotel in Mauritius; it does not only acquire a number of tangible assets. For example, it will