Direct foreign investment strategies are those which help the corporations in making decision for the global deployment and also help the governments in enhancing the appeal for new employments and capital investments. Different factors may be concerned with these strategies including market analysis, competitive assessments, branding analysis, investment climate analysis, qualitative factor analysis, human capital analysis and geopolitical risk assessment.

Direct foreign investment strategies have better access to the foreign markets as they involve importing and exporting, arrangements on international joint ventures and licensing and direct investments in foreign good processing and distribution firms. Therefore, foreign direct investment is one of the main ways of reaching out to the international market. This kind of investment refers to investments of foreign affiliates and entities, which are substantially held by main firms for ownership interest. When we compare these investments to the foreign portfolio investments, the former ones have passive management roles and never take over on the decisions made by the firm.

A majority of the direct foreign investment strategies take only when one firm is merged with other firm, instead of construction of a new facility. Any country gaining these strategies can gain knowledge in finance, information services, marketing, technology and management. Although, these usually occur via acquisitions, the major firm can still do typical upgrading on packing, environment and quality control, procurement practices, distribution systems and production processes and equipments of the firm acquired.

Once there is an increase in the production of the acquired firm, the productivity of labor also improves. Nonetheless, the major firm usually acquires a firm which produces leading brands in particular foreign countries. This is because they want to achieve the competitive advantage of having a leading brand in the new market.

Direct foreign investment strategies are normally used by nations who want to catch the attention of foreign direct investments. In addition to these strategies, there is also creation of favorable environment for ensuring the expropriation of properties with no compensation, guaranteed repatriation of the profits, maintenance of the realistic exchange rates and assurance access to the imported components.

When these strategies are utilized, they also received other infrastructures, industrial estates, tax grants, incentives and export processing zones. Bureaucratic procedures which are facing potential investors are also tried to be solved with these strategies. Bilateral taxes, trades and investment treaties are also negotiated with the countries or other sources of investment. Therefore, the direct foreign investment strategies provide a wide scope to the success of an investor or a business.