...Since 2007 the global recession has been remarkable for all entrepreneurs, and gradually had to go looking for alternative ways to take their businesses forward. The following paper will analyze the basics that can help or hurt a company in order to become internationally succesfull, and also remark the keys to business survival with the aim of expanding its presence in emerging markets. exporting licensing joint venture equity stake/acquisition EXPORTING Pros: In developing countries it is necessary to reach an international level of quality, to upgrade machinery, raw materials and processes, based on imports needed for export. In countries with higher manufacturing costs, probably out cheaper to import than produce, thus becoming resellers, from manufacturers to retailers. In countries with free trade treaties gradual reduction of import taxes to zero, lower the cost of international purchases. Cons: Buy in another country reduces income country where the entrepreneur. Symptoms of economic problems as higher imports than exports, reduce sources of employment, output and cause national currency is exchanged for foreign currency. Imports are always implicit risk of increase in the price of foreign currency. Businesses tied to increased foreign currency for imports which are their main source of income, should contract hedging or futures brokerage firms in order to protect themselves. Imports, in high degree, dependent on the entrepreneur...
Words: 925 - Pages: 4
...idea of joint ventures in the universal vitality division and builds up a joint endeavor model, as a business advancement and evaluation device. The joint endeavor model displays an orderly strategy that depends on present day business brainpower to evaluate a potential business wander by utilizing an adjusted score card method to screen potential accomplices, in view of their mechanical and budgetary center abilities. The model can be utilized by business improvement administrators to saddle the capability of joint dares to make monetary development and reasonable business extension. Besides, associations with nearby organizations can help to moderate econo-political hazard, and encourage purchase in from the national governments that are ordinarily the essential partners in the vitality area wanders (specifically or in a roundabout way). The specific instance of Eskom Enterprises (Pty) Ltd, a completely claimed auxiliary of Eskom, is highlighted. Table of Contents 1. BACKGROUND 4 2. INTRODUCTION 4 3. PROBLEM STATEMENT 5 4. CRITICAL ANALYSIS OF A JOINT VENTURE STRATEGY 5 4.1 What are joint ventures? 5 4.2 The elements of business strategy 6 4.3 Partnership capabilities: a value-added perspective 7 5. ALIGNING THE TECHNO-FINANCIAL STRATEGIES OF PARTNERS 8 5.1 Technology strategy 9 5.2 Financial strategy 10 5.3 The need for a strategic fit between partners 11 6. THE JOINT VENTURE MODEL (JVM). 12 6.1 RECOMMENDATION FOR THE FIRM OF JOINT VENTURE 13 PHASE...
Words: 3204 - Pages: 13
...A joint venture is a partnership or alliance among two or more businesses or organizations based on shared expertise or resources to achieve a particular goal.1 There are many good business reasons to participate in a joint venture partnering with a business that has complementary abilities and resources, such as finance, distribution channels, or technology, makes good sense. These are just some of the reasons partnerships formed by joint venture are becoming increasingly popular. A joint venture is also considered a strategic alliance between two or more individuals or entities to engage in a specific project or undertaking. Partnerships and joint ventures can be similar but in fact can have significantly different implications for those involved. A partnership usually involves a continuing, long-term business relationship, whereas a joint venture is based on a single business project. Parties enter joint ventures to gain individual benefits, usually a share of the project objective. This may be to develop a product or intellectual property rather than joint or collective profits, as is the case with a general or limited partnership. A joint venture isn’t like a general partnership; it’s not a separate legal entity. Revenues, expenses and asset ownership usually flow through the joint venture to the participants, since the joint venture itself has no legal status. Once the joint venture has met its goals the entity ceases to exist. Being a part of a joint venture has its...
Words: 1514 - Pages: 7
...A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares. In European law, the term 'joint-venture' (or joint undertaking) is an elusive legal concept, better defined under the rules of company law. In France, the term 'joint venture' is variously translated as 'association d'entreprises', 'entreprise conjointe', 'coentreprise' and 'entreprise commune'. But generally, the term societe anonyme loosely covers all foreign collaborations. In Germany,'joint venture' is better represented as a 'combination of companies' (Konzern)[1] On the other hand, when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are "co-venturers". The venture can be for one specific project only - when the JV is referred to more correctly as a consortium (as the building of the Channel Tunnel) - or a continuing business relationship. The consortium JV (also known as a cooperative agreement) is formed where one party seeks technological expertise or technical service arrangements, franchise and brand use agreements, management contracts, rental agreements...
Words: 7550 - Pages: 31
...A joint venture is a special type of strategic alliance in that a new business entity is created that is legally separate and distinct from its parents. A primary advantage of a joint venture is that the venture can have a broader purpose, scope, and duration compared to other types of strategic alliances. Moreover, joint ventures tend to be more stable than non-joint venture strategic alliances. Joint ventures in which there is shared management or that are managed by one parent may have difficulties because there may be a tendency to try to please management from the founding companies rather than focusing on what is best for the joint venture. In contrast, non-joint venture strategic alliances are useful because they allow participants to focus on a particular project, yet do so without creating a new entity. Furthermore, non-joint venture strategic alliances can help firms overcome short-term hurdles. The basic benefits partners are likely to gain from their strategic alliances are ease of market entry, shared risk, shared knowledge and expertise, and synergy and competitive advantage. Strategic alliances can ease market entry because they allow firms to overcome barriers such as entrenched competition and hostile government regulations and/or reduce the cost of entry. Strategic alliances can also enable firms to reduce or control exposure to risk. Firms can gain knowledge and expertise via strategic alliances, as well as synergy and competitive advantage. In...
Words: 312 - Pages: 2
...What is a Joint Venture? Joint ventures can take on many looks, but the basic gist is that two or more companies come together to pool their talents, resources and customer lists for the benefit of all. The joint venture allows you to share advertising dollars for a more effective campaign and gives you the opportunity to ride the coattails of a bigger, more established company in order to boost your reputation and build your customer base. Most joint ventures take place between related companies that share a similar target market, but do not compete directly in the goods and services they offer. Benefits of a Joint Venture There are many reasons to consider jumping into a joint venture with another small business, including: * Access to a whole new target market through your JV partner * The ability to reach a larger market base through pooled resources * The opportunity to capitalize on the established reputation of a more experienced business * The sharing of risks, as well as resources, to make your advertising dollar stretch further * Access to resources you may not have had in the past, such as specific skills your JV partner brings to the table that you did not currently have in your own labor pool * Access to new markets and distribution networks increased capacity sharing of risks and costs with a partner access to greater resources, including specialized staff, technology and finance; * Growth without having to borrow funds or look for...
Words: 630 - Pages: 3
...The World of International Management From Matrix to Customer- Centric Management at ABB As a global leader in power and automation technologies,ABB serves utility and industry customers across the world. It has 117,000 employees in about 100 countries and generated $31.8 billion in revenue in 2009. It possesses a strong presence in emerging markets,particularly in Asia. ABB was formed as a result of a 1988 merger between two former competitors, the Swedish ASEA AB and the Swiss BBC Brown Boveri Ltd. The Swedish company added its management strength and the Swiss company added its technological and marketing expertise.The new CEO declared that ABB would be “global and local, big and small, radically decentralized but with central control.” To achieve these seemingly competing objectives, ABB’s CEO chose to implement matrix management. Matrix Management Matrix management is an organizational structure that combines two levels of oversight and control. In ABB’s case in 1993, the company was divided into four corporate divisions (Global dimensions) at the same time as it was divided into three geographic regions (Regional dimensions).The Global dimensions were further partitioned into business areas and the Regional dimensions were partitioned into country holdings. See the nearby figure from Germany’s INFO Institut.Thus, employees reported to two superiors, one from their Global Dimension and one from the Regional dimension. Global dimensions were responsible for strategy...
Words: 1305 - Pages: 6
...RESEARCH ON JOINT VENTURE IN THE PHILIPINES Group Research Work Submitted to the Ramon V. Del Rosario College of Business De La Salle University – Manila In Partial Fulfillment Of the requirements in BUS520M Business Law Submitted by: GROUP 4 Amparo, Lourdes Lagman, Mia Marie Legaspi, Jill Noreen Submitted to: Atty. Antonio Ligon April 6, 2016 I. Background 1. Philippine Business a. History 2. Doing business in the Philippines b. Forms of business 3. Definition and Origin of Joint Venture (JV) II. Statement of the Problems 1. What are the applicable laws in joint ventures? 2. What are the tax implications? 3. Are our current joint venture laws sufficient? Especially with the Asean integration? III. Statement of Objectives The research study aims to: 1. Identify the applicable laws in joint ventures 2. Identify the tax implications in joint ventures 3. Identify insufficiencies (if any) in our current joint venture laws and make recommendations IV. Discussion 1. Nature of Joint Ventures in Philippine setting 2. Governing Laws 3. Foreign Investments 4. Scope of Joint Venture Business Activity 5. Taxes in Joint Venture 6. Example of JVs in the Philippines V. Analyses VI. Recommendations VII. Learning Points VIII. References I. Background of Philippine Business History Historians state that the early start of business...
Words: 6012 - Pages: 25
...JOINT VENTURE A joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership to pool their resources, share markets, intellectual property, assets, knowledge, and, of course, profits for the purpose of accomplishing a specific task. A joint venture differs from a merger in the sense that there is no transfer of ownership in the deal. This partnership can happen between goliaths in an industry. Cingular, for instance, is a strategic alliance between SBS and Bellsouth. It can also occur between two small businesses that believe partnering will help them successfully fight their bigger competitors. Companies with identical products and services can also join forces to penetrate markets they wouldn't or could not consider without investing tremendous resources. Furthermore, due to local regulations, some markets can only be penetrated via joint venturing with a local business. In some cases, a large company can decide to form a joint venture with a smaller business in order to quickly acquire critical intellectual property, technology, or resources otherwise hard to obtain, even with plenty of cash at their disposal. The reasons legitimate company chooses the joint venture strategy is not separated from the reasons above. legitimate eventually choose Tsui Wah restaurant as partners because of limited resources that faces legitimate company can be pervaded by Tsui Wah restaurant, such as: 1. Tsui wah is well known in hongkong so it...
Words: 301 - Pages: 2
...Joint ventures with Chinese companies Some multinational companies have opened subsidiaries in China through joint ventures with Chinese companies. Not all of them are successful though; there are advantages and disadvantages of such joint ventures. In the last years, China has emerged as “a worldwide economic powerhouse”[1], becoming more and more attractive as a joint venture partner for multinational companies in order to gain access to the Chinese market. Foreign companies can profit from Chinese knowledge of the Chinese market, their contacts to important government institutions, their knowledge of the Chinese way to do business and Chinese regional characteristics. Cheap production opportunities and an already existing team of workers can also be a huge advantage for them. In addition to that, the companies can save money and reduce their risks should a particular project fail through resource and capital sharing.[2] Especially advances in technology are really expensive, therefore pooling money and personnel can cut costs significantly. The German carmaker Daimler AG for example has recently been involved in a joint venture with China’s BYD Co Ltd to produce electric cars. That way, they are sharing the high costs of producing such a car.[3] The foreign business partner usually contributes to the cooperation with know-how about production procedures and techniques as well as excellent distribution strategies and managerial expertise. Moreover, joint ventures give...
Words: 540 - Pages: 3
...This article was downloaded by: [Monash University] On: 27 September 2010 Access details: Access Details: [subscription number 922191555] Publisher Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 3741 Mortimer Street, London W1T 3JH, UK The International Journal of Human Resource Management Publication details, including instructions for authors and subscription information: http://www.informaworld.com/smpp/title~content=t713702518 The role of human resource management in international joint ventures: a study of Australian-Indian joint ventures Sharif N. As-Saber; Peter J. Dowling; Peter W. Liesch To cite this Article As-Saber, Sharif N. , Dowling, Peter J. and Liesch, Peter W.(1998) 'The role of human resource management in international joint ventures: a study of Australian-Indian joint ventures', The International Journal of Human Resource Management, 9: 5, 751 — 766 To link to this Article: DOI: 10.1080/095851998340775 URL: http://dx.doi.org/10.1080/095851998340775 PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf This article may be used for research, teaching and private study purposes. Any substantial or systematic reproduction, re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express...
Words: 8566 - Pages: 35
...International joint ventures (IJV) have been a topic of interest in research and literature both in the past and present. Several findings suggest that the success of IJV may be due to numerous factors (Bener & Glaister 2010), though there are many issues which underlie the performance and managerial implications in IJV. This paper aims to discuss the recent contrasting views and perspectives from the academic, peer reviewed literature in relation to numerous issues, focussing on managerial implications that surround international joint ventures. An IJV occurs when two businesses based in two or more countries form a partnership, where a company that wants to explore international trade without taking on the full responsibilities of cross-border business, to join up with a foreign partner (Yan & Zeng 1999). Firms have been relying on IJV as a strategic tool to maximise economic benefits, product expansion, manage risk, adapt to new skills and technologies, and create new products and services faster with the assistance of a foreign company (Luo 2002; Damanpour, Devece, Chen & Pothukuchi 2012). According to Bener and Glaister (2010), the level of control from the parent company, autonomy to management and the level of trust between partner firms are all crucial to the success of IJV by opening up market opportunities through which foreign companies can gain a competitive advantage. Yildiz (2013) also supports this, stating that the level of trust between partners is needed...
Words: 1135 - Pages: 5
...Written case analysis Kanzen Berhad: A Proposed Joint Venture With Pacific Dunlop Limited Problem definition Statement of problem Kanzen Berhad (KB) is a Malaysian based company whose problem is that they want to increase their operating profits, but are not sure how to do it. They are thinking about doing this by reducing their costs and increasing their sales figures, and doing this quickly. They don’t believe they can reduce their costs on their own, and need a way to gain knowledge and technology in order manufacture products more efficiently, and break into additional markets. Expansion The first decision they have to make is whether or not to expand the company. We take it as given that KB has decided to expand but there are several barriers to consider before they can proceed with an expansion plan. The company can choose between expanding within any of the industries they are already in, or expanding by diversifying even more and entering new industries. KB is looking to expand in the bedding industry in this case, so this is what we will focus on. Barriers of expanding the bedding industry These barriers are: 1. A lack of manufacturing technology and efficiency knowledge. 2. A lack of marketing skills to break into new markets, especially with new products. 3. Possible internal conflicts of interests 4. Limitation in markets Having world-class efficiency would provide them with the means to expand into more markets and increase productivity. This...
Words: 5217 - Pages: 21
...Background Joint Ventures Agreement Sheraton Asia Pacific and Chinese Ministry of Foreign Affairs In August 1966, a joint venture was shaped between Sheraton Asia Pacific and Chinese Ministry of Foreign Affairs. Basically, Sheraton Asia Pacific Corporation is a Subsidiary of ITT Sheraton. Andrew Wilson was appointed by Sheraton, an Australian by origin, for the Deputy General Manager position, along with Clara Chan, a Singaporean Chinese, in the Chief Auditor position. These two higher officials were appointed in 1996 only after the regulatory authorities had given formal approval to the project. Agreement Launching Ceremony Incident At the very beginning, a lunch was organized by Yang Zhao, who happens to be the General Manager of the Beijing International Club Corporation. He was also the appointee of the Chinese Ministry of Foreign Affairs. During the lunch session, Clara Chan received her first lesson in JV management and experienced what it is like to be in a venture with the Chinese. Yang Zhao gave a rather subtle complement to Chan by saying that she belonged to the Chinese background and due to which she will be culturally in sync to help Sheraton and Chinese Ministry of Foreign Affairs to establish a good understanding and a better network of communication between these two companies. Chinese Economy: At a Glance Chinese government is tried to make a favorable market condition for the foreign investor to attract them to invest in China. The result to...
Words: 11242 - Pages: 45
...Unit Seven – The Lennar Company Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author: Edna McEwen Professor: Dr. Strouble Date: June 29, 2015 LENNAR CORPORATION’S JOINT VENTURE INVESTMENTS Company Name: The Lennar Company Topic of the Week: Create a case study analysis focusing on the company’s abuse and fraudulent activities relative to CSR and business ethics. Synopsis of the Situation The Lennar Company faces the damage caused by the Fraud Discovery Institute’s claims, the financial crisis, mortgage defaults, and dramatic fall in house prices, particularly in some of their active markets. The country is in the midst of an economic recession that began in 2007, and on top of that, the company has been accused of operating a ponzi scheme and profiting while allowing investors to lose money. On the day of the announcement by the Fraud Discovery Institute, the company’s stock price took a dramatic fall. The problem is, the person that founded the Fraud Discovery Institute is a ‘reformed’ crook who has made it his mission to expose fraudulent behavior of others as a way of redeeming himself from some of the negative things he has done. The question is, is he really reformed, or is this just another scheme he has plotted to gain access to company’s information so he can pounce when the company is most vulnerable. Alternative Solutions Since Lennar’s mission statement states...
Words: 842 - Pages: 4
