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Outline
Joint Ventures
Are formal agreements between two or more firms where a new separate entity is created for the purpose of producing or distributing goods and services.
The level of commitment and risk is considerably higher then in informal alliances. Firms can also enter into a short-term joint venture to learn a specific process, technology, or market from their partner. No need for equal ownership. Equity based on cash or other contributions.
Existing Markets
Existing Products
New Products
Partnership and Fit Complementary Needs Acquisition of capabilities due to learning Corporate culture compatibility Shape and Design Strategic freedom Managerial roles
Doing the Deal Trust vs. Legal considerations Making the Venture Work Managing Culture Differences Flexibility
Joint ventures in countries with a high degree of government intervention produce IJVs with local partner dominance
Independent management structures are more likely when the market is expanding, the venture does not require much capital., or the venture does not require much R&D input from its parents
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