Economics and International Business Law
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Added on 2020-04-21
Economics and International Business Law
Added on 2020-04-21
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Running Head: INDIVIDUAL WRITTEN REPORTEconomics andInternational BusinessLawExpansion of Nevada Ltd in Brazil(Student Details: )
INDIVIDUAL WRITTEN REPORTExecutive Summary Nevada Ltd is a leading chocolate making company in France which is looking forward toexpanding its base in Brazil for two purposes. The first one is to get the knowledge of the localmarket and the Brazilian chocolate which has growing demand at the present; and the second oneis to learn the manner in which business is conducted in the nation, for establishing a permanentbranch in the nation. For this purpose, the company had the option of choosing an agent inBrazil, choosing a distributor in the nation or to go forward and form a joint venture with acompany of joint venture. As a joint venture would enable the company in pooling its resourcesand risks with a local company, the best choice for the company was to go forward with forminga joint venture with XYZ Incorporated. In this context, there was a need for the company to forma joint venture agreement, which requires care to be taken while the same is being drafted. Thisis with a specific reference to the terms being put under this agreement. Through this report, a thorough discussion has been carried out where firstly the reasons forchoosing joint venture as the mode of entry in Brazil have been detailed, by highlighting themerits and demerits of available options, and then highlighting the terms to be included in thejoint venture agreement to be formed between Nevada Ltd and XYZ Incorporated.
INDIVIDUAL WRITTEN REPORTTable of ContentsIntroduction......................................................................................................................................4Part 1: Selection of Best Option......................................................................................................4Agency.........................................................................................................................................4Distributor....................................................................................................................................6Joint Venture................................................................................................................................7Part 2: Terms of Joint Venture.........................................................................................................9Conclusion.....................................................................................................................................11References......................................................................................................................................13
INDIVIDUAL WRITTEN REPORTIntroduction Business expansion is a very critical decision of any business and is undertaken after consideringa lot of different factors. Expanding within the nation is still easy in comparison to expanding ina different nation, of which the company is not aware. This is particularly with regards to thedetails and the real time problems which can be faced in such different nation (Grünig andMorschett, 2017). So, before setting up a permanent branch in a different nation, the businessesoften opt for setting up a temporary base in the target market. And in this context, there are threedifferent options which would be concentrated upon in this discussion, i.e., agent, distributor andjoint venture (Schlegelmilch, 2016). This analysis is being conducted for Nevada Ltd (a fictional company), which has a business ofmaking chocolates and is presently located in France. The target market of the company isBrazil, which is located in Central America. The reason for targeting Brazil is that the companycan set up base in Brazil in long term for getting the Brazilian chocolates which is gainingdemand in international market (Vishnefske, 2017). For this expansion strategy, the three optionsavailable before the company have been analysed. Part 1: Selection of Best OptionAgencyThe first option available with the company is to go for an agency as a mode of expanding inBrazil. In this regard, they would have to hire an agent in Brazil, or a higher number of agents,who would be selling the products of the company in Brazil. An agent would have to be hired
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