Final answer:
The strategy of an American firm establishing a subsidiary in a foreign country is an example of Foreign Direct Investment (FDI), characterized by long-term commitment and managerial control over the foreign entity.
Step-by-step explanation:
When an American firm establishes a large subsidiary in a foreign country, this strategy definitely represents Foreign Direct Investment (FDI). FDI involves a significant level of control and influence over the foreign business entity and it's not just about trading goods and services or licensing, but about establishing and controlling a business operation in a foreign country. In comparison with other forms of international business activities, FDI is characterized by long-term commitment and the investor typically assumes managerial responsibility. For instance, when InBev bought Anheuser-Busch, they engaged in FDI by supplying euros to purchase U.S. dollars, which were then used to acquire the firm.