East Meets West: Business Joint Venture

This article discusses the challenges and benefits of joint ventures between planned economy partners and American businesses. It explores the difficulty of understanding the importance of prioritizing the consumer in a planned economy system. It also examines whether small business owners can tolerate unprofitable joint ventures and why few Americans are willing to enter joint ventures with Soviet partners. Examples of successful joint ventures are provided.

East Meets West: Business Joint Venture
Questions & Solutions:
Why would a joint venture partner from a planned economy have
difficulty understanding that the consumer is king or queen?
Answer: Joint venture partners from a planned economy system often face
difficulty in understanding about the business of their partner. Soviet Union is a
region of planned economy system. They don’t give priority to their customers.
But Americans aren’t like them. They give their most priority to their clients and
customers.
Joint Venture:
It’s a strategic association where two or more partners join to operate the business,
partnership to share markets, intellectual properties, knowledge and assets for
profit. Partnering is very helpful to successfully fight the bigger competitions.
Joint Venture Partners:
It usually to dissolve after the objectives has been achieved. This kind of
partnership is fairly common who wants to do business in a foreign country.
Partners have many resources, so that the venture could be succeed and they can
earn a great amount of profit.
Planned Economy:
A planned economy is an economic system in which inputs are based on direct
allocation. It may carry out in a decentralized, distributed or centralized manner
depending on common economic institution. Government of Soviet Union owns
everything and every business in their region.
Difficulty in Understanding:
In joint ventures, two parties have always misunderstanding situation. In fact, for
that sometime joint ventures fail to do business. So, there should be a mutual

understanding among parties and their rules and regulations have to be less hard to
their partners.
Consumer is the King or Queen:
Soviet Union business firms sell a product to the consumers, but they don’t give
any facility for that product to them. That’s indeed a fault of Soviet business firms.
It’s kind of autocratic system like, “Take it or Go away”. On the other hand
American business firms’ conception is “Consumer is the King or Queen”.
Because of thinking about the future of their business, they want to make their
clients and customers happy and want to achieve their loyalty by giving many
facilities. It’s the conception why American businesses are successful in the world
market. Because, they always keep their customers happy.
Could a small Business owner tolerate a business deal (joint venture)
that had little probability of being profitable within the first 10 years?
Answer: This Question’s answer is kind of difficult. The decision involves
addressing various elements. However, it is easy to overlook the “how” and “what”
questions in this perspective.
How a business is needed to be planned, executed and organized; to keep success
on our side we have to execute following strict plan. The “what” questions should
be covered in a legal agreement that will carefully listed. There should be
statements about which party brings which assets to the joint venture, as well as the
objective of this strategic association or venture. It would be more appropriate to
seek legal advising when entering in such kind of business.
Important questions to Consider:
What do I sell in the market?
How do I reach my target market?
Who are my competitors? If they are better in generating revenues?
How to generate revenues better than competitors?

Where I could do our business? Can we do it without local partners?
How to operate the business? Do I have enough human resources in marketing,
production, promotion and distribution?
How are the rules and regulations for the environment of business?
Do I have access to be successful joint venture’s who can share their experience
with me?
What are strengths and weaknesses? What are the threats and opportunities?
Do I have all support that I need for achieving business goal?
The venture can be for one appropriate project only, or a continuous business
relationship. The major problem is not being able to create profit about first 10
years for small business with their capital. The partners who have huge capital
dominate the small ones. They lead the business over small business. For small
business, an owner should be patient for 10-15 years. By this 10 year they have
tolerate the domination for taking the opportunities of making their network with
other countries. First few years are not so profitable for them. After several years
their networks become huge, so that they can express demands in high range. After
10-15 years, they are beginning to be counted. They can easily work with the big
partners or investors. But first few years they can’t compete with huge partners
because of their poor network. They can hardly afford the things that they need to
develop in business world. After struggling, their business is exposed to
international market by the time. Joint venture is usually for protecting harmful
competition. So, small businesses want the huge business’s support for their
capital.
Why have few Americans been willing to enter joint ventures with
Soviet partners today (it is now mid-1991)?
Answer: A joint venture takes places when two parties come together to make
one project. In a joint venture, both parties are equally invested in the project in
terms of money, time and effort to build on the original concept. While ventures
are generally small projects, major corporations also use their method in order to

diversify. A joint venture can ensure the success of smaller projects for those who
are just starting new projects is generally costs high. A joint venture allows both
parties to share the burden of the project and that result in huge profits.
As we know when east meets west for a healthy relationship in business, many
countries are willing to join. The United States of America is at the top of this list
& has a huge contribution in western business. Americans are willing to join this
business because of profitable dealing with eastern countries.
Eastern countries are also using the food of western products. They are getting
influenced by western culture. The Americans, who are also known as the westerns
are selling their most products to eastern countries. Also they are buying many
products (ex- clothes & shoes etc.) from eastern countries. They are also selling
their culture with products to each other.
If we count profitable list, The United States of America is getting on the top for
their eagerness to be a member of a joint venture.
Conclusion:
America & Soviet Union joint ventures can be more successful if they consider
each other and keep supporting. If we count profitable list, America is getting on
top for their eagerness to be a member of this joint venture and giving priority to
customers.
Some successful joint ventures are:
 Pepsi-Cola (Soviet Union & Pepsico.US joint venture)
 McDonald’s (Soviet union & McDonald’s US joint venture)
 Ford-Sollers (Russian Company Sollers and American Company Ford joint
venture)