![]() Where entry to a foreign market needs a local foreign partner, it may be difficult for multinational companies to enter for business purposes in some countries.Thus, they can jointly pool the resources and competencies to pursue business opportunities. When a firm does not have such competencies or knowhow, it can go for a joint venture with another firm having the same. Many business opportunities require unique competencies of a broader range of know-how. A situation where pursuing an opportunity requires unique competencies.If any business opportunity seems very complex or risky, or even uneconomical for a single firm, a joint venture is an excellent way to undertake that opportunity. Business activity is pursuing an opportunity that is complex or risky.All the situations are suitable for strategic partnerships.The following situations are suitable for a joint venture. Both local and international joint venture helps facilitate joint research efforts, technology sharing, pint use of production facilities, marketing one another’s products, and joining forces to produce components or assemble finished products.An international joint venture is a fruitful means of strengthening a company’s competitiveness in the world market.It is a formidable way to enter into a foreign market when a market entry is restricted by a government joint venture with a local partner in a foreign country is helpful to overcome tariff barriers and import quotas.It can be a useful way to gain access to a new business which is very complex and uneconomical for a single company to pursue alone.It enables the partners to pursue opportunities that are somewhat peripheral to the strategic interests of the partners.It creates an opportunity to combine the skills and assets of partner companies necessary to establish a successful new venture.It allows the partners to share the risks and costs of building a new business.The joint venture entity may also create jobs in a foreign country. Joint ventures have been the preferred way for companies to enter the Indian and Chinese markets. The foreign company brings the capital and expertise, whereas the Afghan company brings the local knowledge and logistical support to the joint venture. For example, foreign companies may have joint ventures with Afghanistan organizations to develop infrastructure.
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